travel

Business Class Flights and Hotel Elite Status on a Grad Student Stipend

April 21, 2025 by Jill Hoffman Leave a Comment

In this episode, Emily interviews Brendan Henrique, a fourth-year PhD student in education at the University of California, Berkeley. Brendan leverages his conference and research travel plus personal spending into free luxury travel by amassing credit card points and elite status at hotel chains. He breaks down how he pursues the points and miles hobby even while living on a grad student stipend and how it’s motivated him to work hard so he can play hard. Brendan’s travel habits might seem out of sync with his income or ‘student’ status, but it’s achievable for many grad students who are free from credit card debt and have a small degree of savings.

Links mentioned in the Episode

Business Class Flights and Hotel Elite Status on a Grad Student Stipend

Teaser

Brendan (00:00): There is a little cognitive dissonance sometimes, um, to the point that through Instagram, some of my friends thought I just had a pile of money in the corner. Part of the reason I’m kind of talking more about it is there’s not any money in the corner, there’s no treasure chest. It’s just really using points effectively. It’s kind of a big disparity sometimes where like for a conference hotel, I’m staying under the university minimum and you have to be this like very responsible steward of like a grant. And then when I do leisure travel for less money because it’s effectively free, I’m at five star luxury resorts.

Introduction

Emily (00:41): Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs.

Emily (01:11): This is Season 20, Episode 8, and today my guest is Brendan Henrique, a fourth-year PhD student in education at the University of California, Berkeley. Brendan leverages his conference and research travel plus personal spending into free luxury travel by amassing credit card points and elite status at hotel chains. He breaks down how he pursues the points and miles hobby even while living on a grad student stipend and how it’s motivated him to work hard so he can play hard. Brendan’s travel habits might seem out of sync with his income or ‘student’ status, but it’s achievable for many grad students who are free from credit card debt and have a small degree of savings.

Emily (01:52): Because we in academia and research are experiencing such precarity in our finances and careers at the moment, I’m doing as much as I can on the financial education side to help you. I’m calling this initiative Giveaway Spring. I’m giving away 60-minute group Q&A calls, 30-minute individual coaching sessions, books, and digital resources—all completely for free—and I’m also sharing the best free financial and career resources I come across for PhDs. Register for my mailing list at PFforPhDs.com/giveaway/ to receive all the details of the current giveaways and an update every other week. You can find the show notes for this episode at PFforPhDs.com/s20e8/. Without further ado, here’s my interview with Brendan Henrique.

Will You Please Introduce Yourself Further?

Emily (02:55): I am delighted to have joining me on the podcast today, Brandon Henrique. He is a fourth year PhD student at University of California Berkeley and we are here talking about travel hacking or the points and miles hobby or stacking travel rewards. We don’t have a really firm term for this, but that’s our topic for today and Brendan’s gonna tell us all about how he does this as a graduate student. So Brendan, thank you so much for volunteering to come on the podcast. Will you please introduce yourself a little bit further for the audience?

Brendan (03:23): Yeah, thank you so much for having me on. I’ve been a fan of kind of the website and everything for a long time. So I am a fourth year student out in sunny California. I study uh, computer science education, um, at the school of Education at UC, Berkeley and I’ve been, I’m in my fourth year.

Using Travel Rewards for Once in a Lifetime Trips

Emily (03:39): Excellent. For you as a graduate student, what kinds of travel rewards stacking strategies do you use? This is a big question, it’s what we’re gonna talk about for the whole interview, but let’s get a high level intro and then we’ll kind of dive into some different ones.

Brendan (03:54): Yeah, so my kind of claim to fame in this is I use a variety of credit card points, whether it’s signup offers, hotel points, conference days where I can generate points to kind of stay in these amazing once in a lifetime resorts, flights, and were kind of redeem these points for really amazing experiences. And that’s kind, I think if I had to summarize in like one paragraph, that’s kind of what I do.

Emily (04:18): Okay. There’s the part of this process where you are um, gaining points and like amassing the rewards and then there’s a part of it where it’s like deploying the rewards and the points and stuff that you’ve amassed. So I wanna talk about both of those. Um, but first do you stay within like a certain um, family of types of points or certain airlines that you use or do you kind of spread everything all over the map? Tell us about that selection process.

Brendan (04:50): Yeah, and this is actually one of the kind of cool parts about points is depending on what credit card family you want to join. So if you’re an Amex person or a Chase person, a lot of those points transfer. So for me the best value for my chase points is transferring it to Hyatt. So I’ve become a really big Hyatt person to the point that I’ve been able to gain the top status with Hyatt where I get the upgrades, I get the free breakfast, kind of the bells and whistles. And so what I recommend to grad students is pick a hotel brand and stick to it. So the big ones are being Marriott, Hyatt, Hilton, and then when you go to those research meetings you have to do field work for a month and they have you at the Holiday Inn, well it might be great to join IHG collect those points. And all of them really have great luxury properties that you can kind of spin the points from the casual stay to the super stay.

Emily (05:39): It makes sense to me that if your university is sending you somewhere for a period of time, they might control, they might choose which brand you’re staying with, it might depend on exactly the location, what’s available and so forth. Um, do you, have you in your experience had agency over that? Um, like when I go to conferences I just try to stay at the conference hotel, but I know some people stay you know, down the street or whatever. So like do you exert control to like stay within your preferred rewards family or do you just go with wherever they wanna send you?

Brendan (06:10): I’ve had both experience. So sometimes it’s like where we have to go to Philadelphia, stay within a mile of the conference center and at that point I do try to go outta my way. Like where’s the nearest Hyatt, my backup kind of family is Hilton so if there’s not a Hyatt, there’s probably a Hilton and that kind of rings true most of the time. There’s been a couple of times where I did like a two week research project where I was on the road and we had to say like a motel, I tried to pick one that had a super family. So for this one it was Wyndham, I forget the sub-brand and Wyndham points can be transferred to Caesar rewards in Las Vegas at one point percent. So I got to eat a great steak dinner because of my two weeks in a motel.

Accumulating Travel Rewards Points

Emily (06:53): I see, okay. You’ve picked a preferred brand but also you try to have some flexibility depending on you know, the location that that’s calling you or what have you. Let’s talk more about the accumulation of rewards. So it sounds like when your university is paying for you to go and stay somewhere that somehow benefits you personally. Can you tell us how that works?

Brendan (07:13): Yeah, so what I make sure I do is I book direct. So if you book through expedia, booking.com, you don’t collect points. So what I recommend to every grad student, I would honestly sign up for the top five hotel brands, make a loyalty account it’s free and then when you do get sent to conferences you can just plug in your rewards number and even if you have to book through like the travel agency or like the conference booking page, every time I’ve had one it allowed me to put in my number and then on the backend they were sync up. So I’m welcomed as like an elite member or loyalty team member. Usually you get better service, especially with a conference hotel, they’re sold out so if there’s a way to split the difference, they’re gonna look who’s a member who’s not and it’s free to join. So that’s kinda one way to personally benefit is to just kind of sign up and make sure you’re using um, kind of the family you want to stick to, whether it’s you know, your Hyatt or Hilton.

Emily (08:05): Okay. So we have our very easy applicable tip number one which is just sign up for the, you know, the loyalty programs for all the hotels that you interact with in your uh, daily, you know, yearly life. Um, so just sign up for ’em all. Great. Let’s talk more about um, amassing points to yourself. Um, you mentioned Chase earlier, so tell us about your, the credit card like aspect of this strategy.

Brendan (08:31): Yeah, so using credit cards you can get a return on the point. So like I think the Chase Sapphire preferred is kind of your typical, most people will say it’s like your introductory travel card. It gets like two or three times on travel. Those points are transferrable to Hyatt. So let’s say you spend a hundred dollars on a hotel for a conference, you get 200 Hyatt points that you could transfer from Chase to Hyatt. You can also use it a few different ways That is kind of a slow grind but it helps you kind of slowly accumulate points. The big leaps are signup offers. So the Chase Sapphire, I think the signup offer right now is 60,000 points. That’s a significant amount of Hyatt points or you can transfer to I think United Air France, a few other partners. That’s a lot of points for Amex. Their offers tend to be a little more generous I think I’ve seen on the platinum card 175,000 Amex points with 1 cent up offer With them though you have to spend a certain amount of money in a certain amount of time. So for Amex I think it’s 8,000 in three months, which is a massive ask Chase. I think it’s a little bit lower, it’s like 4,000 in three months and some are six months. So you kind of have to play what’s that public signup offer and with what those points are worth for you and can you hit that bonus.

Emily (09:46): I think that’s the real key there. Like I just barely started dipping my toe into credit card rewards when I was in graduate school and I mostly stuck with the cash back offers because of two reasons. One, I was nervous about meeting those minimum spends required to get you know, the big sign up bonuses. Um, and two, I really didn’t wanna pay an annual fee ever <laugh>. I didn’t wanna do the math on whether or not it was worth it. I just didn’t wanna pay fees. So can you speak to both of those kind of like objections?

Common Travel Rewards Concerns: Minimum Spending and Annual Fees

Brendan (10:13): Yeah, so I think it’s also a very valid objection if you’re like, you know what, I don’t really like to travel, I like I would rather put the money in a cash back and just kind of pay myself back then there’s cards meant for that. Like I would still recommend you look into it and there are cards that offer great cash back offers where you spend X amount of money and you immediately get it back. So maybe you wait until the end of the year to pay your taxes, you have that sum or estimated taxes, you kind of time it right, you pay with a credit card even with a 2% fee, if the cash back is significant enough it might offset that. And then in regards to I think your other, oh the annual fees, those are a lot trickier. What I like to tell people is we’re graduate students, we’re really good about spreadsheets and like details make a map of it’s gonna work out for you. Some of like my top annual fee card is the platinum card, it’s like 700 a year. I’m very meticulous about extracting every dollar of value on every cent. So there’s a way to get, they have one part of it is a $200 airline fee, so you can’t use it for airfare, you can use it for incidentals. The backdoor hack is the United Travel Bank where you like fill up your travel bank counts as an incidental which you can use for a flight and I find SFO is a United hub, um, as well as like a bunch of other kind of major airports around the country that you can totally one united flight a year that’s paid for.

Emily (11:36): Going back to my, my first objection about like meeting the minimum spends, um, and my comment about like sort of sticking with cashback cards which are usually have lower minimum spends and typically no annual fee. What I’ve learned since then <laugh> since I was in graduate school and had those kinds of objections was that using points for cash back versus using them for travel. There’s a massive um, ROI difference, it’s something like five times, six times, maybe even more of a difference between using those points for travel and points for cash back. So if you are really frugal like I am and especially was in graduate school, I actually would’ve been better served probably by um, using those points that I was accumulating through my normal spending and so forth, um, for travel purposes instead of for cashback purposes. But you know, I didn’t have the bandwidth at the time to understand the whole system. So that’s what you’re, what you know, what you’re helping us do here, which is really fun. Okay, so we talked about collecting points through signup bonuses through ongoing spending on certain cards, whether an annual fee is worth it, do the math, um, figure that out. Tell us a little bit more about the spending of the points and how, how you’ve done that in a really worthwhile way.

Brendan (12:47): Yeah, so it ends up being this kind of complicated optimization problem where you know the points are worth about a penny a piece, some are a little bit less, some are a little bit more and you want to track the maximum value. The best way I found to do that is if you’re trying to redeem it for kind of the lower end of the spectrum. So like a southwest flight, a basic hotel say you’re really only gonna get a penny, a penny 0.5 per point. Where this starts to really get exponentially bigger is your business class flights. Your five star hotels are like, uh, one of the hotels that I’m hoping to stay at is in Paris, the minimum is like 1300 a night but it’s, it’s 45,000 Hyatt points, which is a massive amount of points but point per dollar. It’s an incredible return on investment. And same thing for business cost flights, some of them are like three or $4,000 or international where if you use the points that way I’m getting five to 6 cents per point, which is five times then if you just used it regularly. And that’s kind of the hack is knowing those optimal um, utilization and when to kind of u- hit that value. And that’s the complicated part I would argue.

Emily (13:56): So it sounds like your, is your preference to redeem these points for like the more the step up the little, little luxury travel and not go for economy class and basic hotels and so forth? Or do you do both or like how are you using them?

Brendan (14:11): I kind of aim to get like a minimum value on my points. So for chase points I try to aim to 2.5. So if I do the math that the cents per point redemption isn’t gonna gimme that, I’ll kind of make a hard decision of like do I have to stay at this hotel? Can I find another way to stay there? Like not through, maybe it’s not Hyatt this time, maybe I’ll go to Hilton and check it out and then that’s kind of my cutoff for Amex points. I’m a little more, I kinda held them close because I knew I wanted a business class flight for Europe on a upcoming big trip. Um, so I kind of held them until I saw the moment and then I knew that that value would be there if you watch closely and it popped up on my computer and I snagged it.

Emily (14:52): Okay, this is a bit of a weird question, but you’re a grad student, how does it like feel like psychologically to be traveling in an upgraded way?

Brendan (15:06): Yeah, it, it’s kind of a big disparity sometimes where like for a conference hotel I’m staying under the university minimum and you have to be this like very responsible steward of like a grant. So it’s kind of a, and then when I do leisure travel for less money because it’s effectively free, I’m at five star luxury resorts, it, there is a little cognitive dissonance sometimes, um, to the point that through Instagram some of my friends thought I just had a pile of money in the corner and I had, part of the reason I’m kind of talking more about it is there’s not any money in the corner, there’s no treasure chest. It’s just really using points effectively so that we can, my uh, fiance and I have been able to say at some incredible places from Arizona to Florida and do some incredible stuff because of all these hacks and like tricks.

Gaining Elite Status at Hotel Chains

Emily (15:53): Now you mentioned earlier like stacking deploying of points with like having status at like Hyatt for example. Can you tell us how that works?

Brendan (16:02): Yeah, so what’s great about it is when you redeem the points it’s free to like, or the hotel becomes free. When you then have status, you still get your status benefits. So for Hyatt it’s a little bit harder to get status but when you hit their top, if there’s a suite available that’s in their basic suite, you’re guaranteed to get upgraded to it. Granted some front desk give you a little bit of a hard time, but there’s been times where I’m like, Hey, is there a suite available? I saw one on the app and they’re like, oh my bad. And then all of a sudden I’m in a 800 square foot room, two bathrooms and that’s the fun times at conferences when it’s like you have the massive room because every other room gets sold out and then in the morning for, Hyatt at least, you get to eat breakfast in the lounge or there’s not a lounge, they give you a voucher for the restaurant. So it’s been actually at conferences it’s helped a lot because I’ll fill up at the free breakfast and not have to pay lunch out of the grant money. So it kind of actually I’ll pick a Hyatt and like I’ve argued with like in present an argument to the like whether I’m getting reimbursement, like no, no, by booking this hotel I actually saved you money by the free breakfast and lunch. It allowed me to kind of offset the cost.

Emily (17:11): So I’m so attracted to this idea because I, I know just from my light study of the travel reward space that as you said that Chase redeeming chase points at Hyatt is like a really great value. Um, overall. So I just wanna know how do you get status at Hyatt?

Brendan (17:28): So for their top status you have to stay 60 nights in a year, which is an absurd amount of years. Um, not years, uh, nights there’s some kind of short cuts to get that number lower. One way is if every conference I pick Hyatt, I go to two or three conferences a year, three or four nights, that’s already kind of 10 to 12 nights. So already out of pocket I’m down to like what 50, 48 nights, use point and when you use points, nights count as qualify nights. So then I lower the pay like paid nights even more. When you have the Hyatt credit card, which is their credit card, they give you free, um, what is it, five free qualify nights. So that’s five more nights to hit the 60. And then there’s a few other kind of backdoor hacks where I can gift my status to someone and when they stay I get the night and that allows me to kind of lower, I don’t actually stay 60 nights a year in a hotel because that would be like twice a month, you know. Um, so you’re able to lower that number through some credit card hacks, some of, and then some taking advantage of the Hyatt loyalty program structure itself.

Emily (18:35): Okay. And is this something you have to do every year?

Brendan (18:38): Uh, to some degree the year you earn it you earn it through the rest of the year. And then so if you were to earn Hyatt globalist, I guess you couldn’t hit it now because we’ve only had 28 days. But let’s say you stayed 60 days, you hit it early February, I mean early March you would have it for the rest of this year and the following year. Um, so when I hit globalist, you keep it for the kind of, it’s 12 months plus the remaining of the year.

Emily (19:04): I can see this is a great um, program on their end to retain loyalty <laugh> from you know, frequent travelers and so forth. I think you also mentioned that you use um, travel hacking strategies for rental cars as well, which I’ve like never heard of. So how does that work?

Car Rental Strategies Specific to Grad Students

Brendan (19:18): So this isn’t so much a travel hack as taking advantage of what grad students may not know and if you’re at a large university system, your corporate like office for travel at the university negotiates a ton of travel deals. So I found out recently at Berkeley that because they’re part of the University of California system, they negotiate hundreds of thousands of deals. We have tons of travel offers that just by being an employee of the university you get one of which is uh, tr uh, renter cars. So we get I think 35 to $45 a day rental cars anywhere. What’s amazing about kind of stacking the university discount with a credit card is the Amex platinum gives you top hertz status which allows you to pick any car in like their luxury lane. So when I go to an airport and I need to rent a car, I don’t pick the car that I booked, I go straight to the lane and see what’s available and I’ve done everything from like a Mustang convertible for like 37 a day in San Diego to like we were going to the Grand Canyon. And I wanted like a supped up SUV, there was this like really nice all-wheel drive Buick, but I still paid the same base rate that I paid based off the university discount. And I’ve seen most public big university systems have something like this, whether it’s a travel portal or like just kind of your standard corporate discounts.

Emily (20:36): I had no idea about that. So like I’m not affiliated with the university anymore but I wish I had known that <laugh> back when I was at Duke ’cause yeah, probably they had something if you’re saying that. Um, most do but that’s, that’s like easy tip number two is just check out is there a travel portal for a university that you’re, you know, permitted to book through and yeah see what kind of deals you can get. And it sounds like you can use it for personal travel as well as university business.

Brendan (21:00): Most of them are, they’re tell you you can’t on the travel portal. So for Berkeley there’s some that are very clear that they actually get a, I think the corporate contract gets a kickback and they don’t care whether it’s leisure or for business. With business there’s some more benefits but with leisure you can use the corporate code at lease.

Emily (21:16): Okay, wow. Alright, this sounds really great

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Using Travel Rewards for a $30,000 Honeymoon

Emily (22:46): Now you’ve mentioned your fiance a couple of times. I understand you’ve been gearing up for a honeymoon on you know, using these strategies. Can you tell us about what you’ve booked?

Brendan (22:55): Yeah, so I kind of have been in like points slumber mode where I’m just accumulating hidden and sign up bonuses, asking my fiance if she would also apply to get double the the bonus and you can usually backwards transfer and we’re gonna do a couple weeks in Europe. I’ve never actually been to Europe so I’ve always dreamed of going. Um, so I’m really excited to kind of stay in Europe for a very long time for essentially no money because every hotel has been on points. We got business class flights to and from for about a quarter of a million Amex points, which is like a big number but um, we’ve been kind of saving up for a while with our points to make this once in a lifetime trip possible.

Emily (23:39): Give us like a scale on how many points this took

Brendan (23:44): I actually, I wrote it down just because I knew that this might come up. So it’s about 280,000 chase or Hyatt points kind of. I had to combine them three Hyatt. They have these things called suite upgrade awards where you take your basic book reservation upgrade to the suite three Hilton free night certificates, 800,000 Hilton points and about 350,000 Amex points. So a lot across multiple brands, multiple credit cards.

Emily (24:13): Yeah those are like eye popping numbers um, to me. So how, how long would you say that this took to generate all the points for this trip?

Brendan (24:23): I would say depending on the card, three to four years depending on some were accidents. We were gonna do a big stay at a Hilton so I had started to get into the Hilton ecosystem, decided not to go on the trip so I just had this leftover treasure chest from like three summers ago. Then I was like oh this might be useful on a rainy day and it just kind of kept growing as different Hilton offers came out with different um, signup and you were able to kind of stack them and so I would say we’ve been Hyatt, I tend to use ’em more quickly. So the Hyatt I would say was more than like a year, year and a half.

Emily (24:59): And it sounds like even though you know, you’ve been, the points have been accumulated for around three to four years, but you’ve still been traveling some during that time. You said most recently you’ve been quieter on the travel front to like finalize all of this, but it’s not like it took you all of your spending devoted for three to four years just for this one trip.

Brendan (25:17): No, this involves multiple, like I’ve definitely stayed at Hyatt quite a bit in the last two years. Hilton, I haven’t touched the points I very much like that was kind of don’t touch and then Amex I didn’t touch because I knew, I knew I wanted us to fly to Europe in business class so I kind of wanted to have this kind of flexible chest of points to be able to find the right value and find the right flight route for us to get home.

Emily (25:40): Okay, so you’re staying for essentially free, it sounds like you got all the nights, you got all the flights covered, those, that aspect of the travel. Um, if you would have paid cash for that, how expensive is this trip?

Brendan (25:54): So I have a spreadsheet where I kind of track the value of like the hotel room, what suite we got upgraded to the business class might, when you add it all up plus or minus a little bit, it’s around $30,000 which is, I was almost shocked when I did the math. I checked it twice because I couldn’t believe that the amount of value we were able to extract and we’re averaging anywhere depending on the point like three to 6 cents a point, which is incredible value sometimes I think at the, the Park Hyatt in Paris, the suite goes for 3000 a night. So that was an incredible value for $0. Um, and 45,000 Hyatt points isn’t like normally a lot but at that cash rate, which I certainly would never pay $3,000 for a suite, but that’s what they’re charging someone for it. Um, so I was very amazed that it’s pretty much a brand new car of points.

Emily (26:44): Yeah, a brand new car, uh, I’m assuming over half your stipend for the year. Yeah, I mean it’s, it’s a remarkable, yeah, again, you wouldn’t have paid that but somebody would have for some of all these, for the some of all these components. So, uh, that’s so interesting and again that to me the cognitive dissonance is coming up of like, oh but you’re a grad student. Like you know, do you, you know, not do you deserve but like is it within your realm and understanding of the world to be traveling this way? But that’s the amazing thing that points makes this possible. My goodness

Brendan (27:21): And my fiance is a uh, she was a teacher and now she’s an instructional coach. So we’re both in a similar kind of like highly educated that middle class kind of group or like that it, there is a dissonance of coming back from a couple of really incredible resorts but it’s gone to the point that our friends know were the points people and they’re like, oh where are you off to now? How much did it cost you? Zero. And it’s almost an ongoing joke.

Teaching Other Grad Students about Travel Hacking

Emily (27:46): Yeah. Well on that topic, have you been teaching any of your peers about this? Are they receptive?

Brendan (27:52): So that actually led me to start a Substack, which is my weekly newsletter. I get a lot of questions from a lot of friends like we’re going to Italy, can you help us? So I was like, why don’t I just share everything I know in a way that’s kind of meant for grad students. Um, so every week I post a new post, um, every Wednesday and it’s some either hack some trip report and kind of different ways I’ve come to learn points and I’m trying to kind of write it in a way where to help graduate students understand um, and hopefully like I can kind of help people do this in their own lives with some of the hacks are very low lifts and it’s very much just sign up, search for the travel agency, get this one credit card sign up and you can do this end of year summer amazing dissertation celebration.

Emily (28:37): Yeah, I would say especially for graduate students who do a lot of travel or a decent amount of travel in the course of their work, like it’s kind of, I guess the impression from like travel hacking maybe from like the nineties or something was it was like, oh this is possible if you’re like a consultant who travels every single week on the same airline so you can you know, get the status or whatever. Um, and it’s just changed so much over the decades that this actually is accessible um, even for people who are making like a grad student stipend but especially if travel is a component that your work does pay for to some degree.

Brendan (29:10): Yeah, I think the reimbursable cost part is a really big part that even if you’re at like a Hampton Inn for 100 a night on field work, those are Hilton points. If there’s a Hilton double point promotion, you have the Hilton card, all of a sudden you can add such a big multiplier on something you’re getting, you have to do anyways for your research so why not go to that resort once summer break hits, you know?

Emily (29:33): Yes, wonderful idea. Okay. Earlier you mentioned some example minimum spend levels maybe $4,000 in three months, maybe $8,000 in three months. Um, how do you work it with your like typical level spending as a graduate student to meet any signup bonuses or maybe more like the more aggressive signup bonuses?

Brendan (29:54): Yeah, so let’s, if I, let’s use the 8,000 for the Amex Platinum as kind of like, that’s the highest one I’ve attained. Some tricks that I’ve used is you can pay your taxes with a credit card. They charge like a 2% fee. So if you use estimated taxes you could do time it right? Or if you kind of have the end of the year you have that big lump sum that probably might be able to allow you to hit at least half of it a quarter of it. The other hack I’ve been able to use for smaller ones is if you know you go to Starbucks once a month, 10 times a month, whatever that number is, you can prepay your year for credit like and gift cards. Same thing with Amazon. You can, if you know for uh, the holidays you’re buying a ton of gifts for both you and your friends or family, you can just load your Amazon account a little bit ahead of time and it’s all about the timing. So I wouldn’t sign up with the platinum card with 8,000 and just hope you’re gonna make it. I’d be very intentional with, oh we have the holidays in December, then taxes, maybe I’ll try to do them really quickly in February and then I can kind of get in that three month window or a big conference. If you have a international conference in France, you’re gonna spend a pretty penny. Why not use that towards a signup bonus?

Getting Started with Travel Hacking

Emily (31:08): My goodness. Yeah, most of the conversation around, you know, um, having to front travel expenses and conference fees for graduate students is around complaining rightfully so about you know, having to pay interest on it if they’re not able to pay off the cards and how it actually costs them money and so forth to do it. But you’re completely flipping this on its head and saying, actually use this to your advantage now it does take some savings, right? If you wanna prepay expenses, you have to have the money to do that. So like for you, is this a general savings fund that you have? Do you kind of tap your emergency fund? Like where is the money coming from for you?

Brendan (31:43): I kind of have a small revolving fund that I know that like I’m gonna get reimbursed for the conference or I know that this thing is gonna kind of come and go. So I typically would kind use it almost as like a flex fund that when I need to hit that signup bonus, it goes into it, then the tax or not tax a conference happens, I’m gonna get refunded a month later. Um, if that’s not possible for you, depending on your stipend structure, I would recommend credit cards are probably not a good because you don’t want to, as soon as you hit a penalty at interest charge, all of the point value really starts to get washed away really quickly that if you spend a couple hundred dollars in interest, even that $300 Hyatt Hotel, you’re not gonna break even anymore. So I’m really intentional about staying below and never, never missing a payment.

Emily (32:29): Yeah, this is definitely not an entry level strategy. If you’re a first time listener to this podcast, this is not, okay, go ahead and sign up for the loyalty programs. But like don’t try the credit card stuff until you have, you have all your credit card debt paid off, you have some savings like you said, a flex fund to be able to prepay some things or the conference expenses or, or what have you. Um, this is a level two <laugh> or further like kind of strategy. Um, yeah, I’ve noticed in my own life, um, I, I talk about irregular expenses quite a bit in my uh, teaching but now that I have a higher income than I used to when I was in graduate school. Um, but I also have different expenses. I have kids now I have a house, blah blah. So like I actually just sat down a few months ago and was like, okay, let me look at the cycle of my year. I can figure out like when are these higher expense, you know, periods it’s like March and April for me are like really high spending for some reason. It’s like kids camps, car insurance, like all this stuff. Um, okay now I know February let’s apply for a new card. Hit that sign up bonus. So I’ve just been more intentional about like looking at my year and figuring out okay, these are the key months when it’s a great time to sign up for something

Brendan (33:33): In February works really well because if you hit the bonus around April you can start thinking summer vacation that kind of gives you a three month window when resorts start to, not every hotel releases point availability the same. So three months out is a great time start looking. So that’d be, that’s actually a great timeline.

Emily (33:48): Yeah, Okay. We were just talking about some things you have to have set in your finances to play around with credit cards <laugh>, but let’s say someone is ready for that, they have all the credit card debt paid off or they’ve never had credit card debt, they have some savings. What’s like the first, the next first step after signing up for those loyalty programs after checking with their university’s travel portal? Um, what’s a good first step after that?

Brendan (34:10): Yeah, I think I would decide what you want to use the points for and then that’s a really great kinda decision tree. So if you’ve heard today you’re like, I really wanna stay at Hyatts, that sounds awesome. I would really recommend the Chase Sapphire preferred. The annual fee is like 95 a year. If you book once through the Chase portal, I think you get $50 back, which offsets annual fee pretty much immediately. The signup offer anywhere from 60, I’ve seen as high as like 90,000, but that hasn’t happened in a while. 60,000 Hyatt points gets you four nights at some like really nice hotels. It could also be two nights at an incredible once in a lifetime hotel depending on how you want to use the points. And I would say find that entry level card if you’re like, you know what I, I don’t mind paying for the hotel, I want an incredible flight experience. American Express points are great for business class flights to Europe, um, or even going west, I’ve seen some amazing deals to like Tokyo from the west coast, from like Seattle or LAX, you wanna fly in first class. There’s some incredible deals to be had that way and if you know that’s you or you want to visit there for leisure or for family or anything, then that might be the route that you want an introductory Amex card, which might be like the American Express Gold, which is kind of your dining and grocery reward card.

Emily (35:25): Yeah, and I would say my tip that I’ll add onto this, it’s just, it’s something you mentioned earlier, but just like staying organized <laugh>, um, staying on top of this. So like try one card, get a spreadsheet set up or whatever system you’re gonna be using to keep track of like, you know, the date that you sign up, the date you have to finish spending, the amount of the spend, what you’re gonna get for it, um, what those extra rewards categories are for ongoing spending. The little um, you know, $50 here, a free night there, all that stuff that can come like with your annual annual fee and so forth. Like just get your system going <laugh>, um, from that first card and then you can kind of layer on and add to it over time.

Brendan (36:01): Now I tell people to kind of get your sea legs with your first travel card and then once you’re like, oh I know how to use points, I know how to transfer, then it’s time to maybe think about a different one but try it out and um, take that first day and see how great if it was to not pay for it.

Emily (36:15): Yeah, I agree. I’ve been like just very slowly making my way into the travel rewards points and miles hobby kind of space. I’ve like, I feel like I know like the Chase Southwest system for that free budget <laugh> flight kind of situation. And the next thing I have my sights on is like international travel. Now I don’t know that I’m gonna be able to go business class ’cause I have a family of four, but we’ll see.

Brendan (36:39): That makes it a little harder.

Emily (36:40): Yeah. But just to be able to take those longer flights to that, you know, the further destinations again for free or you know, low, low fees, you know, depending on the taxes and whatnot. Um, so I’m excited about expanding my own like practice in this area. So I’m talking to myself too as well during this interview. Um, so what’s been kind of the overall like effect on your financial mindset, on your stress, on your, how you spend your time of like pursuing this hobby?

Brendan (37:09): Yeah, I think for me in terms of financial, it’s made me think about return on investment a lot more because now every time we go out as a lab or I take friends out or grad school, I’m the first one to say I’ll pay just venmo me. And you can kind of think about it as a return on investment that it might end up paying your dinner actually, if you think about the points that you get in terms of personal kind of enjoyment of life, knowing that there’s this kind of once in a lifetime stay coming up at the end of the year really has helped motivate me to work harder in my like day-to-day life as a PhD student knowing that as soon as I finish this conference I’m flying to Florida for this really amazing to stay. Um, and kind of, you know, that’s coming up that allows me to kind of stress a little bit more so I, because I know the de-stress has coming where I can just sit pool side for a couple days.

Emily (37:58): I think that’s such an important point because probably a trait that’s pretty common among PhD students is not, um, giving yourself the kudos that you deserve for all the great work that you do and not taking the rest and the rejuve rejuvenation and so forth. Um, and what a great way to sort of enhance that experience to be anticipating it, you know, while you’re collecting these points, planning the trip, working really hard as you said, and then be able to actually, you know, take the vacation and do that relaxation that you need. And it’s, it’s cyclical, right? So like that’s so helpful. I know I didn’t take enough like vacation or personal uh, time, you know, when I was a graduate student and it’s really, um, it’s, it’s not that healthy to live that way. So I’m glad you’re kind of an example here of like a different way to like work hard, play hard, work hard, play hard,

Brendan (38:45): And especially we have to to work hard a lot of the time. So like why not get that reward at the end of the tunnel, especially like whether it’s yearly at the end of the milestone. Kind of give yourself that reward.

The Grad Student Travel Substack and Other Travel Hacking Resources

Emily (38:57): Absolutely. First of all, share with us the name of your substack and then tell us some other great resources that you use in this space.

Brendan (39:03): Yeah, so my substack is gradstudenttravel.substack.com so when you go to that, you’ll be able to subscribe as soon as you put your email in, you have access to my archive of every post that I’ve ever written and every Wednesday you get an alert with, there’s a new post and it’s kind of a trip report, a new hack, a new trick and so on. And then the things that kind of got me into this space, um, there’s a lot of great blogs and kind of guides that get you in. One is MilesTalk, um, it’s a Facebook group that became, I think it’s a blog that became a Facebook group and now it’s kind of back and forth. He’s been really instrumental in kind of teaching how you can go from one thing to another and just stack all the rewards. And then Frequent Miler is another one. They do some awesome trip reports of, we use Amex points on this business flight to France. We didn’t like this so you should try this, another hack with Amex and kind of even like you read trip reports that people doing what you hope to do. So it’s been able to kind of gimme one aspiration of I want to be that guy on that plane or two how to get there.

Emily (40:07): It’s so much fun. Okay. When should we tune into your substack to see the trip report on your honeymoon?

Brendan (40:13): Yeah, so that trip report should come out probably next fall. Um, so I’ll be able to kind of write it up fully in the meantime. I’m going to, I started a kind of a six part post of like every little piece that went into it. So that would be every month or every two months I’m gonna kind of give a glimpse of how do we find the flight home, how did I use the points, how did I collect that? And then I’ll do a retrospective probably in like maybe a year from now where I say, this is the whole trip, these are the pictures, um, this is all the upgrades we got and everything.

Best Financial Advice for Another Early-Career PhD

Emily (40:46): Awesome. Well we will look forward to that. Okay, Brendan, thank you so much for this interview. I’m so like inspired <laugh>. Um, but I wanna end with the standard question that I ask all of my guests, which is, what is your best financial advice for another early career PhD? And it could be something that we’ve touched on on the interview already or it could be something completely new.

Brendan (41:05): I would say the best advice outside of like kind of dipping your toes in the water and like travel on points would be Roth IRA it. When I was a, I used to be a teacher, a older teacher kind of took me aside and said, Hey, you’re 22, you don’t know what you’re doing. Get a Roth IRA like first day. And I was like, oh, okay. Um, my mom had mentioned it too, so I should have listened to her in the first place. Um, but it really, if you think about what it affords you and there is kind of an opportunity cost for the PhD sometimes with retirement access that it really for me changed how I thought about retirement and finances and even invest in period.

Emily (41:43): Awesome. You know, I have to co-sign that. Love the Roth IRA for graduate students and really for everybody. Um, okay. Well Brendan, thank you so much again for volunteering to come on. It’s been wonderful talking with you.

Brendan (41:54): Thank you so much for having me. This has been awesome.

Outro

Emily (42:07): Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! Nothing you hear on this podcast should be taken as financial, tax, or legal advice for any individual. The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by me and show notes creation by Dr. Jill Hoffman.

This Grad Student Puts Half Her Stipend Paycheck into High-Yield Savings

September 9, 2024 by Jill Hoffman

In this episode, Emily interviews Maggie Canady, a rising second-year grad student at the University of California at Irvine, on her budget breakdown. Maggie gives us a peek into her life via her top five expenses each month, which are rent, car insurance, groceries, utilities, and travel. Despite taking a pay cut when she started grad school, Maggie maintains close to a 50% savings rate on her stipend. Maggie and Emily end their conversation by discussing how Maggie can get started with passive investing.

Links mentioned in the Episode

This Grad Student Puts Half Her Stipend Paycheck into High-Yield Savings

Teaser

Maggie (00:00): I live in a, uh, beautiful, like two story craftsman house here in LA and I have three other roommates. One of them is my boyfriend. Our house is, uh, $4,500 like total, and there’s four roommates total, and we split it four ways evenly. So we each pay, um, 1100. My boyfriend and I share, um, the like master bedroom, the larger bedroom. Yeah, I’ve lived in this house for two years now. It’s been great. I love my place and that’s also why I’m kind of doing the commute from LA to Irvine because I really love the community I’ve built out here.

Introduction

Emily (00:44): Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs.

Emily (01:13): This is Season 19, Episode 2, and today my guest is Maggie Canady, a rising second-year grad student at the University of California, Irvine, and we break down her budget. Maggie gives us a peek into her life via her top five expenses each month, which are rent, car insurance, groceries, utilities, and travel. Despite taking a pay cut when she started grad school, Maggie maintains close to a 50% savings rate on her stipend. Maggie and I end our conversation by discussing how Maggie can get started with passive investing.

Emily (01:47): Let’s talk fellowship taxes for a minute here. These action items are for you if you recently switched or will soon switch onto non-W-2 fellowship income as a grad student, postdoc, or postbac; you are a US citizen, resident, or resident for tax purposes; and you are not having income tax withheld from your stipend or salary. Action item #1: Fill out the Estimated Tax Worksheet on page 8 of IRS Form 1040-ES. This worksheet will estimate how much income tax you will owe in 2024 and tell you whether you are required to make manual tax payments on a quarterly basis. The next quarterly estimated tax due date is September 16, 2024. Action item #2: Whether you are required to make estimated tax payments or pay a lump sum at time tax, open a separate, named savings account for your future tax payments. Calculate the fraction of each paycheck that will ultimately go toward tax and set up an automated recurring transfer from your checking account to your tax savings account to prepare for that bill. This is what I call a system of self-withholding, and I suggest putting it in place starting with your very first fellowship paycheck so that you don’t get into a financial bind when the payment deadline arrives.

Emily (03:07): If you need some help with the Estimated Tax Worksheet or want to ask me a question, please consider joining my workshop, Quarterly Estimated Tax for Fellowship Recipients. It explains every line of the worksheet and answers the common questions that PhD trainees have about estimated tax. The workshop includes 1.75 hours of video content, a spreadsheet, and invitations to at least one live Q&A call each quarter this tax year. The next Q&A call is this coming Friday, September 13, 2024. If you want to purchase this workshop as an individual, go to PF fsor PhDs dot com slash Q E tax. You can find the show notes for this episode at PFforPhDs.com/s19e2/. Without further ado, here’s my interview with Maggie Canady.

Will You Please Introduce Yourself Further?

Emily (04:14): I am delighted to have joining me on the podcast today, Maggie Canady. She is a current graduate student at UC Irvine, and today we’re doing a budget breakdown and we haven’t done one of those in a really long time, so I’m very excited about it. So Maggie, would you please introduce yourself to the audience a little bit further?

Maggie (04:30): Yes. Hi, everyone and Hi, Dr. Emily Roberts. That’s so, I’m so happy to be here. Um, my name is Maggie Canady. I am a rising second year clinical psych PhD student at UC Irvine. I’m originally from Dallas, Texas. I received my bachelor’s degree from Harvard in 2020 where I majored in psychology and minored in dance. Um, really broadly, my research interests, interests include understanding the risk and resilience factors around trauma exposure, as well as, um, learning about culturally responsive trauma interventions.

Emily (05:07): Okay, fascinating. And actually now that I know that you had a little bit of a gap between finishing undergrad and starting graduate school, let us know what you were doing during that period.

Maggie (05:17): Yeah, so my first year after I graduated and obviously graduated during the pandemic, I received a traveling fellowship from Harvard and I was supposed to be in Southeast Asia for a year. Um, that obviously couldn’t happen, so they said, okay, we’ll still give you the money, um, but you have to choose and create a project that stays in one state. So for my first year I was interviewing and photographing mixed race individuals and doing a, um, kind of like ethnographic project, um, about mixed race identity. And then after that I worked full time as a research assistant at the University of Southern California.

Emily (05:54): Okay. And I’m trying to sort of place some numbers on those kinds of jobs, like did you take a pay decrease when you started graduate school from that assistantship position?

Maggie (06:04): Yes, I did. So, um, at USC I was making about, I think I was making about $48,000 a year, $49,000 a year, and then went to a graduate student, uh, stipend <laugh> after that.

Current Stipend, Additional Income, and Household Size

Emily (06:17): Yeah, go ahead. Tell us what is your stipend right now?

Maggie (06:20): So this past year as a first year, I made a total of $29,125. Um, and that was for nine months of working as a part-time teaching assistant, which is defined as about 20 hours of work a week. Um, I also received a diversity recruitment fellowship of about $5,000 when I first started, and then I also received a merit award to help with summer costs, um, which I received at the beginning of the summer for $3,000. Um, this upcoming year I’ll make about $35,000, and this is due to the 2022 strike, um, that happened all across UC campuses. So starting, um, this, this year, the lowest paid workers will make $34,000. And then based on your level of experience, you make a little bit more incrementally. So this upcoming year I’ll make 35,000, which is great.

Emily (07:14): And that’s again for teaching assistantship, is that right?

Maggie (07:16): Yes, uhhuh.

Emily (07:17): Wow, I’m so glad to hear that. I’m so glad to hear that was the, the effect and also that you had some bridge funding for last year to kind of bring you closer up to that a number that you know, we will get to in this upcoming year. That’s really, really good to hear. Do you have any sources of income outside of your stipend?

Maggie (07:35): I occasionally tutor and babysit, but it’s very like one off and kind of just if my schedule allows, I’m also a dancer and I’ll get paid for gigs occasionally, um, like music video gigs or performance gigs. Um, but that’s more for like my own interest and like personhood as opposed to depending on that as, as like a source of income.

Emily (07:59): I see. Okay. And is there anyone other than you in your household, any living beings?

Maggie (08:05): Living beings? Yes. So I live in a, uh, beautiful, like two story craftsman house here in LA and I have three other roommates. One of them is my boyfriend, um, my boyfriend and I split a lot of the house grocery expenses, but when I pay my taxes at the end of the year, it’s just me.

Emily (08:24): Gotcha. Um, so no dependents, but you do have people, your boyfriend and other roommates that you’re sharing expenses with.

Maggie (08:30): Exactly.

Current Financial Goals and 50% Savings Rate

Emily (08:32): Alright. Are you currently working towards any financial goals?

Maggie (08:36): So I would eventually love to buy a house that feels a little bit, um, kind of like of a, a dream in the far distance right now, just with my stipend and how crazy California is with, um, like yeah. Houses. Um, but it’s definitely in the back of my mind, mind and when I put money into savings, that’s kind of what I’m thinking. I also love to travel, so I feel like I’m always kind of planning a trip or thinking about a trip and having money tucked away for a trip. I feel like when I think about my budget budgeting categories, that’s definitely one of them that I’m always, um, saving money for.

Emily (09:15): Okay. So you are, you do have some kind of savings rate for this like eventual house goal, um, and that could be several years away. Are you keeping that money in, in cash right now in like a savings account or are you investing it in some way?

Maggie (09:29): So I have, uh, Robin Hood and I am investing it, but I also have a high yield savings account. Um, and so I, this is like kind of one of my like tips or things that I learned this year, but, um, my 50% of my direct deposit goes directly to a high yield savings account and that, uh, a, that high-yield savings account is not connected to any of my credit cards or any of the ways that I spend money. So I feel like it’s just like this pot of money that, um, is really growing, which is really awesome. Um, and then I will also invest, um, invest like kind of every other month or so depending on like my schedule.

Emily (10:06): Wow, okay. A 50% savings rate. So once the money goes into the high yield savings account, does it come back out for spending in the present, like for travel, for example, like you just mentioned?

Maggie (10:16): I try not to, I try to really use like my 50% and, and go from there, but I definitely can pull from it and like have in the past, but I really try not to, I try to not touch it.

Emily (10:28): Okay. Wow. So you’re, you’re close to a 50% savings rate then. Yeah. This is something I’ve never heard of from <laugh>, a graduate students, so, okay. Now I’m very interested to hear how you’re managing your expenses to make that happen on the stipend numbers, um, that you mentioned. So that’s incredible. Let’s start talking about that. So we’re gonna go through your top five largest monthly expenses. And tell me first, are we hearing about these top five expenses based on like your average spending over the last year or like what you budget or like just last month or how did you come to this list?

Budget Breakdown: Housing and Car Insurance

Maggie (10:58): Yeah, so a couple of them are set in stone. Like my rent for instance is set in stone, that’s every month. My car insurance, I pay, um, every six months, so I just averaged it out for each month, but I pay it kind of in bulk. Um, and then my groceries, utilities, and, um, like flights that I pay for, um, that’s kind of an average. Um, so yeah, my rent is my biggest expense. Of course, it’s $1,100 a month. Um, so I’m, I immediately automatically budgeting for that.

Emily (11:30): Okay. So $1,100 per month for rent. Are you sharing? Okay. Just tell me more about the house. Like how many bedrooms are there? Yeah, how many people are there? Are you sharing a bedroom with your boyfriend and then you’re splitting it? Like, just tell me how you came to this number and what the house looks like.

Maggie (11:43): Yes, so fair. So, um, our house is, uh, $4,500, um, like total and there’s four roommates total and we split it four ways evenly. So we each pay, um, 1100. Well, we used to pay, we used to pay 1125 each. Um, but we have like a apartment. It’s kind of a long story, but now we each pay 1100, um, and we split it evenly. My boyfriend and I share, um, the like master bedroom, the larger bedroom. Um, and yeah, I’ve lived, uh, in this house for two years now. Um, we’ve lived together for coming up on four years. It’s about like three and a half right now. Um, and we’ve always split the rent evenly. Um, yeah, it’s been great. I love my place and that’s also why I’m kind of doing the commute from LA to Irvine because I really love the community I’ve built out here. Um, so yeah, 1100 and that’s what everyone in the house pays.

Emily (12:40): Gotcha, okay. Yes. ’cause I didn’t realize that you weren’t close to the university. So how long was your commute?

Maggie (12:46): My commute is anywhere <laugh> from 40 minutes to an hour and a half. Um, but I usually take the train and the train is like a clean an hour, 20 door to door, and I’m doing work on the train, et cetera. But if I drive, it varies depending on the traffic.

Emily (13:05): And do you commute every day? Every weekday?

Maggie (13:08): I, so during the school year, I commuted every day for the first two quarters, so about two thirds of the year. And then the last quarter I commuted for, I think it was, I think it was three days a week. Um, it really just depends on the quarter. It, and like these first two years are the most class intensive obviously. Um, so I will be commuting every day. And then the expectation is that as classes lessen more of my research becomes kind of independent. I won’t have to commute as much. And so it was like this real back and forth that I went of like, okay, do I move down to Irvine and like, do I kind of lose this community that I have but I’m closer to school or do I invest in kind of like my personal happiness and then have this balance? Um, and obviously I cho chose to stay in Los Angeles, um, and it’s, it’s been great. Um, occasionally I’ll house sit down in Irvine, which I guess is also, I don’t make money from it, but it is like kind of a relief from the commute. So it is an investment in some sorts but I’ll house, sit, dog sit, uh, closer, closer to campus.

Emily (14:12): I’m curious, um, how you and your roommates found this house,

Maggie (14:17): Craigslist, <laugh>? Yeah, so we were living in, um, echo Park, um, which is different neighborhood in la and we were looking for a new place that was slightly bigger. So we looked for about a year, really, I think eight years, eight months to a year. Um, and then my boyfriend found this place on Craigslist before it was on Zillow in the other, um, rental websites. So we were the first to apply. Um, we had three interviews with the landlords because they wanted to, um, rent to a family. Um, yeah, so they wanted to rent to a family. Um, but we convinced them that, you know, we all have incomes and steady incomes and that we’re reliable. So it’s been great. They’ve been great landlords.

Emily (15:05): Oh, that’s really interesting. I’m glad I asked about that. <laugh>. Um, yeah, ’cause I don’t talk with too many graduate students who live in houses with multiple roommates, but I think it can be a very cost effective, um, situation. So anyway, I’m, I’m just glad to hear all those details about yours.

Maggie (15:19): Oh my gosh. Yeah. I feel like it’s just like such a great perk of Los Angeles, that there’s so many beautiful, like artisanal houses and we have a front in the backyard and laundry and, you know, AC and uh, a fireplace. Like there’s so many, like, I don’t know, homey perks of it. And it is cost effective, which is sick.

Emily (15:37): All right. Number two, expense

Maggie (15:40): Car insurance. Um, so I pay $300 a month for a car insurance, which is definitely on the higher end. Um, I recently got an electric vehicle and it was a more expensive premium because of that. Um, yeah, my car insurance expires in September, so I’m definitely gonna be shopping around for a cheaper premium. So if you have any recommendations, I’ll definitely take them. Um, yeah, so it’s 300 a month.

Emily (16:10): I actually don’t have recommendations because I just found out that our car insurance company is pulling out of California.

Maggie (16:16): Wait, mine too.

Emily (16:16): I was using E-surance.

Maggie (16:18): Yes, same.

Emily (16:19): Okay. So we will both be shopping around.

Maggie (16:21): Okay.

Emily (16:21): For insurance on our electric vehicles. ’cause I also recently got an electric vehicle. Um, tell me, yeah, you too. How did you acquire this car? Because I’m not seeing a car payment on your list of expenses.

Maggie (16:33): Yeah, so I had a little electric car, um, before this one. It was like a little 2015 Nissan. Um, and I bought it on Facebook marketplace. Um, and it just didn’t go the distance. Like I had to charge it constantly, um, and all of that. So I was selling this car, I I put it on Facebook marketplace and then after about three to four months on Facebook marketplace, someone, um, purchased it. So I had, um, like that immediate check. Um, and I had, I’d say about like, so the car was 30, $37,000. I had this like about $10,000, $11,000 check from the car I sold. So then it was $26,000. I had about half of that money that I could, you know, I had allotted to like buy a new car. And then my parents helped me with the last like $12,000. So that’s how I bought the car full out. And then when I got my tax return in April, I got $7,500 back from that that I was able to give back to my parents. Um, so, so I’m, I know that math is kind of hard to like, speak out loud without seeing it. Uh, my parents probably gave about $5,000 to help me just like pay it out in full. And I had the rest in savings, the rest with selling my last car and then the, uh, tax stipend.

Emily (18:02): Yeah. Amazing. Um, I guess you probably had a pretty high savings rate during your last position as well, right? Making more money living in this same place. It sounds like same people.

Maggie (18:13): Mm-Hmm. <affirmative>.

Emily (18:13): So similar rent.

Maggie (18:15): Mm-Hmm. <affirmative>.

Emily (18:15): Um, yeah, so I, I see how that savings account was, was healthy enough to help you with that purchase, so that’s amazing not to have a car payment during graduate school, but, uh, yeah, hopefully we can get that insurance, uh, monthly cost down a little bit. I mean, you and I were probably both with insurance because it was a pretty good bargain <laugh> the last time we looked around, but hopefully there will be another bargain that we can both find. Um,

Maggie (18:36): I hope so. Yeah. <laugh>.

Emily (18:37): Yeah. Anything else you wanna say about that? Car insurance?

Maggie (18:40): Yeah, I guess this is more of like, um, kind of like a bigger thing, but, um, like my, my parents are like huge savers and I feel like I have like a very kind of like conservative background when it comes to money of like, okay, I’m going to like save my money and like, really just like, be aware of like, what’s coming in. And so I feel like I, I’m like always like, like nesting acorns or something, <laugh> with my money, which has been, has really paid off with like these bigger, um, payments. Um, so yeah, I, I think that that’s where it’s coming from of like, ’cause I know it’s like kind of insane to have like 50% of my income going to payments. Uh, sorry, 50% of my like, um, income’s going to savings. Um, but yeah, so I think that that’s where that’s coming from of this like very like, almost like must conserve my resources. Um, yeah.

Emily (19:35): Okay. Well let’s put a pin in that. We’ll come back to it at the end of the interview.

Commercial

Emily (19:41): Emily here for a brief interlude. Would you like to learn directly from me on a personal finance topic, such as taxes, budgeting, investing, and goal-setting, each tailored specifically for graduate students and postdocs? I offer workshops on these topics and more in a variety of formats, and I’m now booking for the 2024-2025 academic year. If you would like to bring my content to your institution, would you please recommend me as a speaker or facilitator to your university, graduate school, graduate student association, or postdoc office? My seminars are usually slated as professional development or personal wellness. Ask the potential host to go to PFforPhDs.com/financial-education/ or simply email me at [email protected] to start the process. I really appreciate these recommendations, which are the best way for me to start a conversation with a potential host. The paid work I do with universities and institutes enables me to keep producing this podcast and all my other free resources. Thank you in advance if you decide to issue a recommendation! Now back to our interview.

Budget Breakdown: Groceries, Utilities, and Travel

Emily (20:56): Let’s continue with our list. What’s your third largest monthly expense?

Maggie (21:02): Um, my third largest is groceries. And so I split this with my boyfriend. Um, but even after splitting, it’s anywhere between like one 50 to two 50 a month. Um, I love to cook and we’re always kind of cooking meals, so that’s part of it and that’s more cost effective. But groceries are expensive. Like I can see the difference even from being here since 2020. Like it’s just, it’s just crazy.

Emily (21:30): Yeah. But that number actually seems pretty low to me. I mean, I also <laugh> grocery shopping, cook for a family of four, but it’s two little kids, so it’s not that much more than, you know, just two adults and, uh, we spend quite a bit more than that. So you must be doing something right. Tell us about a few of your go-to meals.

Maggie (21:47): So we have, um, a Costco membership. And so like, we’ll get like a rotisserie chicken, like $5 rotisserie chicken from Costco.

Emily (21:54): The loss leader.

Maggie (21:56): Um, Yes, love, um, big fried rice, stir fry kind of people. I just made like a shrimp fried rice, so frozen shrimp and then whatever veggies I have. And, um, we buy like a 20 pound thing of rice, which is awesome. Um, soups, I, not really right now ’cause it’s summer, but I’m a big soup girl <laugh>, and that’ll last, like, that’ll be made in bulk on like a Sunday, and then I’ll use that as like meal prep for the week. Um, and then I eat like, pretty light breakfasts, like I’ll buy like a pack of like a big thing of yogurt and like granola. Um, yeah. Yeah.

Emily (22:36): So eating out does not appear in your top five expenses, but let us know where that falls in the list. Like, are you eating out, how often do you do? So,

Maggie (22:45): Uh, it really depends on my social battery <laugh>, which I feel is like this pendulum swing. And, um, like, so I was in Europe, um, this, um, at the first two weeks of this month, and like my shopping was like through the roof, like my eating out obviously because, you know, we were on vacation and so like when I came back I like shut my doors, like grabbed my groceries and like, have been cooking, like eating in just because like I can’t, like eat out for the whole month. Um, and then when I’m back in LA like it’ll kind of depend on like, oh, okay. I’ll feel like, oh, I have a little bit more free time in my schedule, so I’ll see more of my friends and then we’ll like go like, grab a drink or we’ll go out to eat. Um, and then I’ll like feel like, oh no, I’m way too stressed. I have to like, just can’t see anyone have to stay in and then I’ll just do that. Um, yeah, so it really kind of varies. Um, but when I, I do go out, I try to just like go for coffee or like, um, frozen yogurt or something, like, something that it’s like still I’m, I’m still paying for something, but I’m not paying like 30 bucks for a meal, you know?

Emily (23:56): Mm-Hmm. <affirmative> especially if your purpose is to see people, then it doesn’t really matter how much money you’re spending on the food or whatever, it’s more having this setting to to be together with other people.

Maggie (24:06): Yes, exactly.

Emily (24:07): And how about, um, takeout or, you know, DoorDash, GrubHub? Do you do any of that?

Maggie (24:13): So, no, my mom owns a restaurant. She’s had a restaurant for like 30 years and I worked for her growing up. Um, and then even throughout college whenever I was back. Um, and GrubHub and DoorDash just like are so awful to small business owners. Um, and so kind of seeing like behind the scenes, I was just like, I, I cannot endorse this. So it’s like more of a personal value. Um, but I, I don’t, I don’t, DoorDash, yes, <laugh>. Um, I’d say utilities, they average about $75 a month. Um, it’s $25 for, um, wifi and then like somewhere between like, like 10 to $20 for gas. And then depending on the month, the rest of it is, um, uh, electricity. So anywhere, honestly, probably like closer to 75 to a hundred dollars a month. Like it really just depend, like we’ve had the ac blasting this, you know, this past month, so it’s going, it’s gonna be a lot higher than usual, but then kind of in the fall and spring it’s, it’s very, very little, very minimal.

Emily (25:26): Yeah. And this is one of those areas where having the multiple roommates really, really helps because yes, your utilities go up a little bit more with the higher square footage, but things like internet, like that’s just gonna scale down. Right, exactly.

Maggie (25:38): Yeah. Yeah, yeah. That’s exactly right.

Emily (25:40): Sounds great. And your last expense? The fifth one,

Maggie (25:43): My last one, it’s, uh, most recently been flights. Um, I’ve been trying to buy like my holiday flights early and then, like I said, I was in Europe, so I bought those flights. Um, the most recent flight I bought was for my parents actually to come visit me. Uh, my dad had a coupon and then for my mom’s, uh, ticket was $400 round trip. And so like kind of going back to that, like travel as like a bucket for my budgeting, like it’s, it’s one of those things that I’m like, I will be traveling home for the holidays or like, I want my family to come see me or I wanna go on vacation. So it’s one of those things that I just, I’m like, okay, this is where money is gonna go, you know?

Emily (26:24): Yeah. And with a 50% savings rate, nobody can argue with spending a little bit on travel as well. Um, tell us about your, um, strategies around buying flights, if there are any. Like, are you loyal to any airlines? Do you use any certain credit cards? Like how do you work this?

Travel Credit Cards

Maggie (26:40): So I have a Southwest credit card, which honestly has not been as great as I expected. Um, but I’m from Dallas and uh, Southwest, um, has like love, uh, love Field Airport, which is 10 minutes from my house. So it’s, um, it’s nice to have the Southwest credit card because I am building points on that and I try to use those when I can, but the flights are usually quite expensive still. I also have a, um, I have to look at the exact one, but it’s a Chase, like traveling credit card and that’s been great.

Emily (27:14): The Sapphire Preferred, I’m assuming?

Maggie (27:16): Yes.

Emily (27:16): Okay.

Maggie (27:16): Yes, the Sapphire Preferred. I love that card. I try to do like all of my expenses on that card and that card actually paid for my flight to Europe this past time, like after, like, just spending for the entire year. And I love that. So those are my two. I also have a Amex Blue Preferred, which gives 6% back on groceries. Um, and so I’ll just give that back as like a, um, kind of like cash, like return. Um, so yeah, those are my, my top three.

Emily (27:51): Uh, what airline did you use for your trip to Europe?

Maggie (27:53): Oh, great question. I used, um, I think it was, I’m, I will probably get the name wrong. France Air or like Air France. Mm-Hmm. <affirmative>. Okay. Yeah. Um, because they’re a partner with Chase and so I was able to transfer my points from Chase to Air France.

Emily (28:10): Yeah, I’m, I’m quite familiar with the Chase system because I also was trying to be loyal to Southwest for a little while. Um, it’s a little bit easier actually with the family because we can do the Southwest Companion Pass, which is a really great like, value. Are you familiar with it?

Maggie (28:26): Yes. That’s amazing.

Emily (28:27): Yeah, so like you can always take one for the listeners once you earn the companion pass. You can always take one when, when the primary person books a flight, they can always take a companion with them on any flight, unlike some other airlines where it’s like once per year. Nope, it’s every flight as long as there’s a seat available, um, for free, which is amazing. Uh, but anyway, the Chase points Trav, uh, transfer to Southwest as you probably know. So I was working that system for a little while. And smart. Yeah. Seeing where else the Chase points could go. ’cause we also have the, um, the Sapphire preferred card, but I haven’t gotten into any of the other systems yet. Like I’m not an Amex, you know, so it’s something to explore and see what those partners are. ’cause yeah, I mean, using credit card rewards for travel seems to be the kind of the biggest bang for your buck.

Maggie (29:07): Yes, I totally agree. And I feel like I’m like so sold on Chase as like my credit card because of how many flights and like how many points I get that I can then transfer. I’ve heard that for American Express, like it’ll start paying off once you have like the platinum or whatever, like the highest kind of credit cards are, and I’m just not, I’m just not ready to spend like $600 a year on a credit card. So I haven’t yet, but <laugh> maybe one day.

Emily (29:34): Um, yeah. Well this is really exciting. So you’re spending quite a bit on travel, but you’re also trying to optimize as what, as much as you can with points and so forth. Mm-Hmm. <affirmative>. Um, and it seems like you’re sort of using that, uh, save the high yield savings account that you split your paycheck into as, um, what I would call a, a targeted savings account, at least to a degree. Mm-Hmm. <affirmative> because you can pull from that account when you have these like large flights or whatever coming up, right?

Maggie (29:57): Exactly. Yeah, you’ve got it exactly on the head.

Saving Vs. Investing

Emily (30:01): Okay. Um, so the question I kind of wanted to come back to is why are you saving and not investing given that you have quite a high savings rate and you could be doing some of both?

Maggie (30:12): Yeah, that’s a great question. I honestly feel like it’s from a, like lack of knowledge around investing. Like I know that investing kind of consistently and monthly and like diversifying your assets is the way to go, but I feel like there’s still a bit of fear for me there. And kind of going back to this idea of like where my parents came from of like saving, like my, my mom and I just got into investing in 2020, so it’s kind of this new endeavor for both of us and she’s really gotten into investing, um, in the past few years. Um, and for me, like, it’s just, I haven’t put that like energy into like really knowing what I’m doing. Um, but I feel like that’s potentially like a financial goal I can work on, um, alongside like saving for a house, um, just because there is like so many benefits, um, to it. So if you have any advice for me, I would definitely take it.

Emily (31:14): Yeah, I mean, I, I said a second ago that you weren’t investing, but that’s not quite true, right? Because you are using Robinhood Mm-Hmm. <affirmative> you said sort of inconsistently. Mm-Hmm. <affirmative>. What kind of investing are you doing with Robinhood? Like what are you investing in?

Maggie (31:26): Um, like I’ll invest, you know, I have to honestly go back and like, look, it’s kind of all over the map. Like, like I, it would be like Apple <laugh>,

Emily (31:37): But single stocks is what we’re talking about.

Maggie (31:39): Yes. Yeah, Exactly.

Emily (31:39): Not Like, um, ETFs or something

Maggie (31:41): Like that. No, not ETFs. Yeah. Okay. And see, like I, I feel like I can feel myself like not even really know, like exactly like feel, not feeling super confident in like having a conversation about it because I, it’s just, it’s like a place where there’s a big gap in my financial knowledge. Um, so yeah, I think that that’s definitely like kind of a next step for me. Um, yeah.

Emily (32:04): Yeah. Well I have, I have content recommendations for you, please. Are you more of a reader or more of a podcast listener? Um,

Maggie (32:13): Podcasts, I think for, especially with my drives,

Emily (32:16): So there’s a very, uh, well known person in the, uh, the fire space, the financial independence and early retirement space. His name is JL Collins. Mm-Hmm. <affirmative>. And he has a book, if you are a reader, I would recommend his book. Okay. But since you’re a listener, I would say find his interviews, which he goes on a lot of different podcasts, but he’s been on, for example, the Choose Fi podcast several times. So I, I would go find like the earliest one or two interviews where they’re probably going over the basics of, uh, his book is titled The Simple Path to Wealth. So it’s all about this strategy, which is passive investing, which is investing in, um, index funds and ETFs that are based on indices. And so it’s a very like set it and forget it kind of investing strategy, which I really like. And it’s the kind of strategy that I teach also because it’s the most effective Mm-Hmm. <affirmative>

Emily (33:02): In terms of the money that you’ll have at the end of the decades, like in your pocket because you’re paying very little in fees and you’re not letting your, um, psychology and your human emotions, you know, get in the, in the way, in the way of like your investing strategy. So I would go find some interviews with him, definitely on Choose fi. You can probably just search like your podcast player for Col j Collins and hopefully some interviews will come up. But choose FI for sure, has him. Um, I might also suggest Afford Anything that’s another podcast name. I bet he’s been on that podcast too, although I haven’t listened through all the archives extensively. So yeah, just find, find a few interviews with him and see if you sort of like his argument, his philosophy.

Maggie (33:42): This is so helpful. Thank you so much. And I will definitely check out The Simple Path to Wealth. Um, I have like two free audio book credits for some reason right now, so that’ll be one of ’em. <laugh>.

Emily (33:54): Yeah, I don’t know if it’s an audio book. I certainly heard Hope it is Okay, because it is very popular, so hopefully they have turned it into an audio book. But I’m curious, um, whether he the author is the one who’s reading it or whether they hired someone else. He has a very like deep like gravelly like old man voice, which actually think would be great for an audio book. So, um, yeah, I’m curious if if he’s the one who’s who, uh, read it or not. Um, but yeah, start, start there, I would say.

Maggie (34:19): Okay. I definitely will. And if, like, I’ll definitely take a book recommendation too, especially with the summer. I have like ex like exponentially more free time. Mm-Hmm. So

Emily (34:27): The one After The Simple Path to Wealth that’s also great on investing is Ramit Sethi’s book, I Will Teach You To Be Rich. Mm-Hmm. And that’s on more broad personal finance topics, but he’s, he does have a couple chapters devoted to investing, passive investing. So that would be another good one to read.

Maggie (34:42): Thank you. That’s so helpful.

Emily (34:44): Oh, sure. I mean, you are already, honestly most of the way to winning the game by just having like a very high savings rate on obviously a limited income and really dialing in your expenses. Obviously you’ve thought a lot about what you value, um, in the travel and so forth. So like you’re already doing a ton of stuff really well, and if you decide you want to, you know, devote some of that very high savings rate toward investing, you’ll really be able to grow your money, um, over the next few years. And even, um, this is not like advice, but depending on how far out that potential house purchase is, um, you know, a savings account might not be the most appropriate place for it. Some conservative invest investments might be an appropriate place, but it kinda depends on what your timeline is on, on that front. So it’s just something to think about. Like you could do a split, right? You can do a certain percentage into just straight savings, a certain percentage into investing. Maybe some of it’s for long term, some is for medium term. Mm-Hmm. <affirmative>, um, again with high savings rate you kind of can’t go wrong. Um, yeah. With choosing where you wanna put that money.

Maggie (35:42): Yeah, that’s a great point. Yeah. Okay. This is a great summer project. I am excited to Yeah. Kinda go down this route.

Emily (35:50): Yeah. Um, I hope the listeners enjoyed this because this is a really, you know, unique example of like living in a very high cost of living area. But as we were talking about kind of setting those highest, you know, the, the expenses that are, have the potential be the biggest in the budget, the rent, the transportation, getting those set at the, the best level that you can and sort of letting everything else fall where it may, and, and doing that, um, strategy of paying yourself first by splitting your paycheck. These are really great examples. So I wanna say to the listeners, if anybody else wants to come on and do a budget breakdown, I love doing these kinds of episodes. I wanna hear from people all over the country with all different kinds of stipends, and it’ll be every one single one is gonna be a very different story. Right.

Best Financial Advice for Another Early-Career PhD

Emily (36:29): Um, so Maggie, thank you so much for coming on the podcast. I’d love to ask you the final question that I end all my interviews with, which is, what is your best financial advice for another early career PhD? And it could be something that we’ve touched on already in the interview, or it could be something completely new.

Maggie (36:44): Ooh, okay. Yes. Well, a couple things We’ve already touched on. High-yield savings account. Definitely recommend that. Um, I use SoFi because I had a great offer. Um, so kind of look at whatever has, you know, a great, uh, high interest rate. Um, like I said, the, you know, trying to like immediately put my direct deposit into savings and into that high yield savings account, so I don’t even have to think about it, um, was like kind of a great, like passive like, or, you know, intentional act that now has become like routine. So that was really helpful. Um, I listened to, um, financial Feminists by Tori, uh, Dunlap this, uh, at the beginning of this year. And I feel like it was a really like great, um, like supportive start into thinking about finances, um, because she really breaks things down and you don’t feel like overwhelmed or Yeah, she, it just feels like it comes from like a context in a place in a positionality that I also, uh, subscribe to.

Emily (37:48): And that was the audiobook version, right? Yes. She has a podcast as well. I don’t think it’s called Financial Feminist though.

Maggie (37:53): No, it was the audiobook. Yes. Great distinction. Um, and that’s where I learned about, um, kind of like values and having like when you’re thinking about budgeting, kind of breaking up the budgeting into buckets and like three buckets that you care about. Um, and that was a really helpful framework. And then this is kind of like a small piece of advice. Sorry, I feel like I, I just have my list, so I was like, oh, lemme just say it. Go for it. Um, but institutions have money and like applying for stuff, my first year was really fruitful. Like I was a mentor and received a stipend, you know, like I was a volunteer for a conference and I received a stipend. Um, yeah, just like reading the emails weekly, weekly emails you might get from your institution and just like checking those for additional pockets of money.

Emily (38:42): Great. Great advice. Um, you won’t be needing it as much, right? With a massive pay increase that you’re gonna enjoy this year, but should still be available to you should you want to access those opportunities and amazing. Well, Maggie, thank you so much again for volunteering to come on the podcast and sharing your life with us for the last half hour.

Maggie (38:59): Of course. And thank you so much for having this podcast. It’s so helpful for people like me. So yeah, I really appreciate you.

Emily (39:06): You’re absolutely welcome.

Outtro

Emily (39:16): Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! Nothing you hear on this podcast should be taken as financial, tax, or legal advice for any individual. The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Dr. Lourdes Bobbio and show notes creation by Dr. Jill Hoffman.

How This PhD Student’s Budgeting Practice Enabled a Hawaiian Vacation

July 20, 2020 by Lourdes Bobbio

In this episode, Emily interviews Sean from Authentically Average, a fourth-year PhD student at a university in Houston, TX. Sean and his wife have very intentionally set up their budget to reflect their values, and now live and die by their budget. Their top three budget priorities are retirement savings, tithing, and travel. Sean’s budget helps him say “no” to certain areas of spending or opportunities for spending so that he can say “yes” to his travel aspirations. Sean describes a wellness vacation he and his wife took to Hawaii and why travel is such a high priority right now.

Links Mentioned

Find Sean on his blog, Authentically Average, and on Twitter, Instagram, and Pinterest
Find out more about Sean’s leadership coaching
Blog Post: Put Your Money In What You Value
Blog Post: Travaasa Hana Highlight Reel
Personal Finance for PhDs: Financial Coaching
Personal Finance for PhDs: Podcast Hub
Personal Finance for PhDs: Subscribe to the mailing list

budgeting for travel on a grad student stipend

Teaser

00:00 Sean: If you aren’t budgeting yet, try to get there as soon as possible. Tracking expenses is great and it’s helpful to get you in the right mindset. But until you are, I think, front end saying this is the money I will have coming in, here are the places it’s going to go, you can’t really capture your values fully and where to invest unless you’re doing it upfront.

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 six, episode 12. And today my guest is Sean from Authentically Average, a fourth year PhD student at a university in Houston, Texas. Sean, and his wife live and die by their budget. And they have put a lot of effort into making sure that their budget reflects their values. Their top three budget priorities are retirement savings, timing, and travel. Sean describes a vacation they took to Hawaii and the ways they minimize spending in lower priority areas of their life so that they can spend more on vacations and other types of experiential living. By the way, we recorded this interview in September, 2019. Without further ado, here’s my interview with Sean from authentically average.

Will You Please Introduce Yourself Further?

01:18 Emily: I am delighted to have joined me on the podcast day Sean, from Authentically Average. Authentically Average is the name of his blog. And Sean, I’ll just let you introduce yourself to the listeners.

01:28 Sean: Sure. Thanks Emily for having me. My name is Sean. I run the authentically average blog. I characterize myself as a PhD student, husband, chef, pretty much all of the above kind of general life stuff, and that’s the focus of the blogs, every day kind of living. I’m a PhD student in the 3D printing space. I just started my fourth year, so I’m hopefully approaching the light at the end of the tunnel. I live in Houston with my wife, Allie. We have nine children, and by children, I mean plants and most of them are still alive. I’m doing a PhD in 3D printing space. I got my bachelor’s in chemical engineering before that, went directly to grad school, and still trying to figure out what I’m looking for afterwards. I’m thinking like medical device route. That’s a really interesting space for me and the community in Houston is really kind of exploding right now, so I’m really passionate about trying to see that grow.

02:36 Emily: Yeah. Sounds really good. And I understand that your wife is a graduate student as well.

02:41 Sean: She is. My wife is getting her MBA currently. She’s super woman. She’s working full time and getting her MBA on the weekends. A lot of school at our house.

02:50 Emily: Yeah, that’s a full plate. I guess you might not be the busiest one in the household.

02:57 Sean: I think it goes both ways. The nicety of being a PhD student, sometimes, is depending on your advisor, the work schedule is not necessarily lighter, but more flexible. I tend to do a lot more of the, I talked about this briefly on my blog, but like, I tend to do a lot more of the household activities, like the cleaning and cooking and stuff, just because I’m the one that has the time for it. It’s like not always super sexy to talk about sometimes, but if I don’t cook, we don’t eat. Somebody’s got to do it. But we like to share. I mean, she’s got a lot on her plate right now from a professional capacity, so I’m happy to take on those other roles.

Translating Life Values to Your Budget

03:45 Emily: Yeah. And I guess that’s one of those things that you can talk about on a blog that is named Authentically Average. You can talk about your everyday experiences. And money of course, is among those. You recently published a post that was kind of talking about your financial values, which is something that I love to talk about. It’s the foundational concept in personal finance, yet not one that gets a lot of airtime, I feel like, unfortunately, so why don’t you go ahead and tell us about how your values inform how you use your money.

04:20 Sean: Sure. Thank you for that. A couple of weeks ago, the focus of that post was, and we can talk about this in a little bit, but I had gone on a vacation and some people were like, “Oh wow, this is great” and some people were kind of like, “okay, great, you went on this really nice vacation, but your blog is authentically average, how do you reconcile those?” I started thinking about it. I said, okay, I should probably take a step back. The value focus, like you said, is I think central to personal finance and making “smart” decisions with money, but not one that’s talked about a lot. Primarily the goal for that was “here are my values, here’s what I try to invest my money in, and by extension a little bit my time.”

Retirement Savings

05:10 Sean: For me and my wife, we have three top tier values, and then beyond that, everything kind of falls into place. The first one is financial security, so saving for retirement, making sure that we are doing the things we need to do now so that we can live comfortably later. I think that sometimes people get really caught up in this concept of like, I’m doing what I gotta do right now, and that’s fine. And sometimes they are not saving for retirement because they feel like they can’t and that there’s a lot there to kind of go through. And sometimes because they simply don’t think about it. The first time that I kind of understood the concept of like retirement savings and compounding interest and all of that, I started to notice, Oh, wow, there’s a lot of ground that I can make up here in my late twenties and set the stage for how my thirties and forties are going to go. That’s the first piece. The second piece is —

06:14 Emily: Actually, I want to make one offshoot comment to that because of course, saving for retirement is something that I love to talk about. One point that I really like to make when I’m speaking with graduate students or other sort of people on the younger side, younger and lower income side of things, is that if you look at those compound interest calculators, the time is what matters. I mean the time and the amount of money you save, of course they both matter, but the time — you wouldn’t believe what a little bit of extra time will get you in terms of increased returns. And so I always say, whatever amount…like if you feel like you can’t save anything okay, maybe that’s true, but if you can even find like $10, $50 a month that you can start putting away for that purpose, it’s unbelievable what a huge difference that makes on the back end of things, just to have those few extra years. Don’t be discouraged if you can’t save like a thousand dollars a month. That is a very large and unreasonable amount of money for a graduate student level of income, but a smaller amount of money makes a really, really big difference too.

07:18 Sean: Yeah, definitely. And just to kind of keep going on that thread, the stereotypical thing that people give of why you should start investing as early as possible is they talk about if you invest for 10 years from 20 to 30, the amount of money that you make during that time, by the time you retire, will outpace starting from 30 and moving forward. You can’t possibly catch up. Just like you said, sometimes I think people get like, Oh no, I can’t do that much., and that’s okay, but if you can do something, that’s great.

07:55 Emily: Yeah. I think one of the really difficult things that people run into early on is that they’re dealing with debt loads and they might have to clear those first before they can even touch the investing for retirement side of things. But since you’re already starting to invest retirement, I take it you’re either debt-free or you have debt that does not concern you.

08:14 Sean: We are debt free. I would say that my wife and I are very blessed, lucky, strategic, however you want to look at it, I guess. We paid our last debt off last year. I had an outstanding car note that I paid off. We again are very fortunate, I think, to be able to cash flow her MBA. That’s something that I think is a challenge, especially in higher education. I know that the finances for PhDs vary pretty drastically depending on field. In my PhD program, it’s tuition free, and we collect a stipend for working here. When I think about my PhD, I think about it more as job than I think an education of being a student. And I think collecting a paycheck helps me keep that association clear. So yeah, we are debt free. We are investing some. I’d like to be investing more, but also, you know, like you just said, there are different things that we’re trying to take care of and trying to keep all the balls in the air at the same time.

09:23 Sean: Yeah, definitely. Okay. So that is one of your top priorities, is saving for retirement. What’s the next one?

Experiential Living

09:30 Sean: So there’s two more. The second one would be, we have a really big focus on, I call it experiential living, but in the current case it’s travel. I joked about having plant children. Allie and I don’t have any kids yet. We have plans to have kids, but we just don’t have them right now. We have this focus on like, if there are things that would either be impossible or significantly more difficult to do when we have kids and when we’re older, we’d love to do them now. That post that you mentioned earlier about our travel, we went to Maui for a week over the summer. That was born out of like, “Hey, this is a great time to just go and spend a week in Hawaii and just, you know, live it up.” I mean, responsibly, but this is great. After saving for retirement, our next focus is, Hey, we want to have a good time, and for us having a good time looks like going out and exploring.

10:33 Emily: So I was really curious about this term, you just used — experiential living. Right now you said it looks like travel. What are the other things that might fall under that category for you?

10:42 Sean: I guess one thing is I know that some people, their focus is they want this nice X or Y. I think Allie and I, we would much rather save up money for a few pay periods and go to a nice concert or go see a play or a musical or something than buy a new TV or buy something else for the house. We do live in a nice apartment and we’ve decorated and all of that, but we would much rather do something that’s I think a little bit more like out and active. There’s not anything good or bad about that, or any other way. That’s just our preference.

11:24 Emily: Okay. So is this basically boiling down to the personal finance experiences versus stuff debate where everyone has kind of come down to the side of experiences? Is that what I’m hearing

11:36 Sean: Somewhat, yeah. I think that the stuff thing, depending on what the stuff is, is very valuable, in terms of having stuff and, and that’s all fine. But also I know just from, we did the like whole KonMari thing a couple months ago and realized, Oh, I have a lot of stuff. It was nice at the time, but in hindsight I would rather, I think have spent the money that I spent on that stuff on doing something.

12:06 Emily: Yeah. I actually heard this really great thing on a podcast recently. It was on the ChooseFI podcast and the, one of the people that they were interviewing, I can’t remember who the guest was said, something like he strives to have one memorable moment per month, some new thing that he’s never tried before. Travel would certainly fall under that, but it could be like a cooking class or like just doing something different out of your routine, once per month, he has that goal to make a memory, basically, with his wife. And actually it can be the same moment or they can have two different moments, one that each one prefers more per month, but that was his goal. And I thought that was amazing, and I really want to implement it in my life now, because I do feel like months can go by where it’s like, yeah, what happened that was great or notable or important, I’m not even sure.

12:59 Emily: Okay. So experiences, concerts, travel, that kind of stuff. And so right now your focus is doing the things that you would have a harder time doing once you have children. And I will have to say that when I read your post about your vacation, I was like, how do I get rid of my kids for a week, so I can do this. It sounds awesome. What is your third top priority?

Tithing

13:20 Sean: Again, so saving for retirement, travel and experiential living. The third one, honestly, is giving back and tithing. My wife and I tithe every pay period. I know sometimes as graduate students that can seem like a tumultous topic. We already do not make all that much money —

13:45 Emily: Actually, Sean, let’s pause there because some of the listeners might not be familiar with the term “tithe”, could you define that?

13:51 Sean: Sure. In a traditional tithe you would be giving, donating a 10th or some amounts. I mean, tithe literally is “10th”, but giving some amount back to your church family. My wife and I are Catholic. We give back to, we split between the church that we currently go to and then we also support a couple of students through the FOCUS program. They do ministry on college campuses throughout the United States. Good clarification. We give back to our church. For us, we do a traditional 10% tithe. That’s just, I think how we have decided that that’s where we want to put that value at. Does that kind of answer that?

14:39 Emily: Yeah. It’s not something that’s come up on the podcast hardly at all, but we also tithe and have for throughout graduate school, a long time. And it definitely, while I knew other graduate students from our church who also did that practice, it wasn’t something that I felt like was really widespread or something that graduate students could really get a handle on that large percentage. The 10% is a very, very large chunk of your income, but, I feel like tithing for me in terms of like the budget actually pushed us towards what I call percentage-based budgeting. If a 10th of your gross income is going towards that, we also did a certain percentage, it changed over time, starting at 10%, for like saving for retirement and then now we’re up to like 20%, so we’ve increased that over time. And I’m trying to remember, well, taxes are also sort of, not exactly a percentage, but you can convert them to a percentage of your income, so for us, it was like these different goals scale with the amount of money that we make, which I really liked that there was like this flexible percentage. The percentage is fixed, but the amount of money is changes depending on what your income is.

15:51 Emily: I really liked that way of thinking about budgeting, that you should have percentages going towards different things. And it actually goes pretty well with the balanced money formula. I don’t know if you’re familiar with this at all. It basically says that you should keep your necessary expenses below half of your take home pay. And I really liked that as well because, I think for graduate students, there’s this phrase that Dave Ramsey uses that I really like, not for graduate schools, but for people in general, which is something like “act your wage”, something along those lines. I think this percentage-based budgeting, I think, is really appropriate for people who have incomes that they expect to change a lot, like graduate school. Hopefully it’ll be going up alive later on, but if you have those percentages it can keep you really grounded and something can be consistent through those fluctuations in income basically.

16:44 Sean: Right. Definitely. Yeah. We do a similar thing in terms of trying to make sure that we’re doing a percentage breakdown on our budget. One small detail, we do typically everything on net pay, and then also when we get a tax return, I mean, ideally our tax return is zero, right. But if we do get a tax return, then we’ll do the same thing on whatever the return is. But I think it basically shakes out to be the same thing. I have found that to be really helpful. I feel like it helps us recognize where are we essentially overspending in our lives, and conversely, where could we be giving more attention, certainly.

Living and Dying By Your Budget

17:32 Emily: A phrase that I read in your recent post was we live and die by our budget, and that really stuck out because you talked about, I guess, that your budget is a plan for how you’re going to spend your money. And if opportunities arise after you’ve made the, you oftentimes say no to those opportunities, you stick with your original plan. I just wanted to ask you about that. How did you guys put together your budget, and how do you find the fortitude to stick with it?

18:02 Sean: I mentioned this very briefly before, disclaimer, this is not an ad, wish it was an ad, but it’s not, my wife and I use it’s called YNAB, or You Need A Budget. It’s a budgeting tool online that you use, to keep everything in order. One of the, I think, nice things about living and dying by your budget is it tells you how much money you’ve budgeted and allocated to every, whatever category you want to put it in. And if you overspend, the color of the money bar goes from a nice, pretty green to a very angry red color. And that’s just like, I think, maybe potentially a little bit of an immature way, but it’s really reinforcing for me of like, Hey, you made your money angry because you spent more than you allocated.

18:56 Sean: I joke about that sometimes living and dying by our budget. Really, it’s taken a lot of discipline to get to the point that we are now and give yourself grace and patience to get there as you’re working through things and things come up, of course. But we’re in a space right now where we have a set of goals, like I talked about, and a set of values. Sometimes things come up that don’t align with those, or potentially detract a little bit from them and we have to make a mature decision on like, Hey, is it worth us to do this? So one of the things I talk about in that post is, a friend of ours came to us and said, Hey, we want to go to this football game, last minute. Allie and I are huge college football fans, I went to a big football school for undergrad. Great, right, in terms of an interest standpoint, I think that’s great.

19:55 Sean: We started to look at the finances and said man, this is going to be like a thousand dollar trip just out of the blue. And I think at the beginning of the year, had we started the year and said, Hey, we want this to come up and we want to plan for this — great, okay, we’ll budget for it. But a few weeks out, we had to say, no. I mean, first of all, based on our budget, we literally did not have the money to do it without taking money from other standpoints. I really struggle with the idea of pulling money that we had saved for retirement out of retirement to go to a football game. But more than that, I think it’s sometimes difficult when you…This is always a challenge when you have very diverse friend groups is like, everybody has their own different set of values. And I want those people to understand, like friends of mine, that sometimes I to turn things down. Like, hey, I love you guys. You’re great, I appreciate everything about you, and I appreciate our relationship, but just understand that me not wanting to come out, or me not wanting to do this last minute, isn’t a reflection on like our relationship and is a reflection on I just don’t have the money for it according to what my wife and I decided it was important to us.

21:11 Emily: Yeah. There’s another blogger, content creator in the personal finance space, Paula and her brand is Afford Anything. And so her tagline is kind of like, “you can afford anything, but you can’t afford everything.” She’s really, like you were just saying, you have to get really clear about what’s important to you because you want to be able to say yes to the things that are at the top of your list. And that does mean saying no to the things that fall further down and that’s hard. But you can’t say yes to everything. If you say yes to everything, you’ll end up saying no to the things that are most important to you, if you accept every opportunity that comes your way.

21:52 Emily: I have to say though, your story reminded me of when I was in graduate school. I went to Duke and Duke won two championships while I was there 2010 and 2015. 2015 was technically after I defended, but I was still enrolled as a student and I still had tickets to games and stuff. So anyway, in 2010, of course you never know, going in to the tournament, how it’s going to turn out. And at the last second, we had an opportunity to go to the Final Four. Duke went, and my husband and I had the opportunity to attend. They were giving away tickets for students. It was actually free. The tickets were free. All you had to do was get there and stay there. And we really deliberated, and I don’t know that it came down to mostly a financial decision. There were other time reasons why we decided not to go. We had already traveled actually the previous year to see them play and they hadn’t advanced, and so we already had like, kind of that disappointment. So we decided against going, and of course in 2010, they ended up winning, same story in 2015. That’s just one of my major regrets from when I was in graduate school, because I was a fan, that I let anything stand in the way of like attending those events. So I do think that my main regrets from graduate school, in terms of my personal life were things that I didn’t do that money played into why I didn’t do it. It probably wasn’t the whole situation, but yeah, there’s two times I can point to an opportunity came my way and I said no to it, a very reasoned decision, and I really think that was the wrong way to go.

23:27 Sean: Yeah. And sometimes I think that that’s a struggle because we’ve done a couple of things too, where it’s like, Oh, this is such a good opportunity to do this thing. Sometimes, and I say this with a mountain of salt, occasionally we will not live and die by the budget. And the only way that that works is to have intentionally over allocated somewhere else, so that the total amount of money is still there, like the money to cover a different decision is still there. It’s not like we’re living outside of our means, but we do give ourselves a little bit of grace. Sometimes I’m like, this is a really big deal. That trip to Hawaii was pretty much entirely planned for, but there were a couple of things once we got there, that was like, you know what, we’re here, I think we’ll regret this thing if we don’t do it, let’s do it and we’ll figure it out.

24:27 Emily: Yeah. I think that strategy of over saving or just saving for things that you don’t know quite what you’re saving for — at some point a friend will invite you to do something, at some point you’ll have an opportunity to come your way that you’ll want to say yes to at the last second. And I think the way that most people who are not on top of their finances would handle it would just say, okay, I’m going to put it on a credit card, I’ll worry about how to pay for it later, which is not a great strategy. But if you save in advance and you’re just not totally sure what that money is going to go for, but you’re pretty sure something’s going to pique your fancy along the way then you can be able to say yes again to those opportunities, knowing that it’s still within everything you’ve allocated for an advance,

25:08 Sean: Just a small insight, we have a category in our budget called “stuff we forgot to budget for”, and we put a small amount, however much, in there every pay period just because inevitably something comes up. Now, if it’s an emergency, we have separate money set aside. You mentioned Dave Ramsey earlier — we have a separate emergency fund set aside for that kind of thing. This is more like your friend asked you to do something, you have an opportunity to go watch Duke win a championship, whatever.

25:44 Emily: Yeah, exactly.

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25:48 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.

Frugal Tips for Experiential Living

26:34 Emily: So I’m wondering if you have any ways, any sort of frugal things that you’ve done in your life that help you have these experiences that you want have. Either minimizing the money that it takes to do those things or minimizing other areas in your budget so that you can free up more money for your top priority. Are there any like really good strategies you use in that vein?

26:58 Sean: I think the stereotypical student might fight this a little bit. I’ll start with the like ways of like daily life first. We cook 99% of our meals. That’s just the way it is. For me that’s two reasons. That post that I wrote is primarily about investing your money in what you value, but there’s also a small segment on investing your time in what you value and no question about it, cooking for yourself takes it takes time. It costs money to go buy groceries and it takes time to cook those meals. I think it’s easier to go out to eat, from a time perspective or pick up quick ready meals and that kind of thing, but from a time perspective, like at that point, I’m investing in my health. It’s almost exclusively healthier for you to cook for yourself than it is to go out to eat, and it’s almost exclusively less expensive to cook for yourself too. In that post I talk about, Allie and I have been discussing potentially giving ourselves a little bit more room on this and kind of grace on this for when we want to go out. We don’t go out to eat ever. Like once every couple of weeks and the reasoning for that is, whatever amount of money I would spend on going out to eat a couple nights a week is better suited towards saving for Hawaii, or, we’ve been married for just over a year, for our honeymoon we went to Italy. We spent two weeks there. That’s not an inconsequential trip size, and the only way that that works is you’re making cuts, so to speak, elsewhere in your life.

28:37 Sean: The other thing for us has been we’re busy people. She’s in school part time, well, no she’s in school full time and working full time, and I’m working full time and doing things at home. And so it’s really important for us to invest in our marriage. Regular date nights are important, but it doesn’t always have to be this five star restaurant. Those types of things are nicem, but I think I also get 90 plus percent of the relationship building component from that type of date from going to somewhere kind of casual, hole-in-the-wall, or going on an experience. We talked about this this morning, actually. It’s been a couple weeks since we had a formal date, and one thing that we’re going to do next week is we’re going clothes shopping and we’re going to Marshall’s-hop. There’s like seven of them within a 10 mile radius of us and we’re just gonna — we found that when we hit, we really hit there, but they’re very hit and miss, but there’s a lot of them, so we can kind of hop between and see. I think that that might sound somewhat silly to some people, but for us, we like investing in clothes that makes us feel good and feel professional, but also not breaking the bank and this “adventuring”, so to speak, and helping each other try things on — that I think is a fun relationship building activity that literally the travel aspect only costs the gas, and then we would have budgeted for the clothes. There’s that aspect on like life-hacking.

30:11 Sean: From a travel hacking standpoint, honestly, it’s just time. You have to decide how much your time is worth, but we always look for great deals on hotels and flights. Google has a flight tracker that you can use. It’ll send you alerts when your flights fall. I do the same thing for a lot of the hotels. A lot of third party websites are great. For Italy, actually this, this is a great story. For Italy, the flights were going to be like, I don’t remember like $1800 a piece or something, like a lot of money. We went in May, so like the beginning of high season, I get it. Then, the day before I was going to buy, because they weren’t falling, I said, “Oh, let me just look on another website.” I went on, I think it was Priceline or one of the third party website and it was like half that, together. I was like, “Yes, I’m absolutely doing this. We’ll take a weird layover to save half the cost. You could write a book about that, but that’s the things that I think of.

31:15 Emily: Yeah. I think when your goal is to have experiences and make memories and so forth, I guess there’s been research on this that like the anticipation of the experience is a big component of your satisfaction with it. And so taking the time to plan, and do whatever travel hacking and price comparisons and all of that, it actually enhances like your ultimate experience when you put a lot of effort into it upfront. I don’t know, to me it’s a little bit counter-intuitive, but yeah. So pursuing these travel hacking strategies, um, in addition to saving money can actually make you feel better about the whole thing. I guess what I was thinking about when you’re talking, especially about like the food and not spending so much money on eating out and so forth. That was a strategy that we used also. We cut out basically all kinds of convenience food, in favor of cooking for ourselves. And that is like a little bit of a sacrifice because yeah, you have to plan it a little bit more and all that, that goes into cooking. But for us, like for you, the money that we were not spending on convenience eating went towards our travel fund. And so when we knew exactly where the money that we would’ve spent on one thing was going to go, if we didn’t actually carry through with the eating out or whatever it was, that makes the whole thing a lot more palatable. It makes the whole thing go down easier if you know, okay, yeah, I’m sacrificing a little bit in this moment right here, but that is going to enable something really fantastic later on.

32:43 Sean: Right, right, right, right.

32:45 Emily: Any other frugal strategies around those things, either minimizing expenses on things you really want to do or cutting expenses and things that are not such a high priority?

32:54 Sean: I think the only additional thing that I’ll add is — it’s especially common, I think because like I, as a PhD understand or PhD student, rather, my time is limited. I think that my time is a little bit larger than some other people’s because I just try to make a point of, I’m only working X hours this week. Like this is my job and I’m putting this much into it. And that sometimes works for people and sometimes doesn’t. But I see a lot of, because we have such little free time, convenience buying and convenience spending somewhat to kind of what you, you mentioned earlier. And I think in some ways you do have to give yourself a little bit of that because the amount that you stress over not making convenient spend is also a use of resources, maybe not for the best. Just watch it. I always go back to “live and die by the budget”. Until I had a budget that I like actually did religiously every week and every pay period, I didn’t have a clue. And I started to look at my spending habits and said, man, I didn’t realize I was spending this much on snacks, or this much on cable and this other thing that I don’t even use. It just, it never occurred to me because I was always tracking my spending after the fact that never really looking forward any further than the next couple of weeks.

34:20 Emily: Yeah. I mean, tracking your spending is an amazing thing to do as like a first step. It actually does start to change your behavior in many cases. But if you’re just tracking it as a passive activity and it’s not actually balancing, okay, well, where do I want my money to go? And do I prefer it here? Or do I prefer it there? That’s what you have to do with your budgeting. They’re both really useful, um, activities, but I guess once the shock of the tracking wears off and you make whatever sort of subconscious changes you’re going to want to make from that, you need to start budgeting to get that further of value add from the activity.

When Budgeting Pays Off: Sean’s Trip to Hawaii

34:54 Emily: So we’ve teased this enough. Tell us about your trip to Hawaii, that made me so jealous.

35:01 Sean: We went to Maui specifically. We went to Hana, which is a very small town on the East coast of Maui. Allie was really into this idea of like a wellness retreat. And I did, I think the stereotypical husband thing that I hate and I was like, what are you talking about? No. And then I started to look into it. I was like, Oh, this actually sounds pretty awesome. So I was like, okay, yeah, let’s go for it, sure. There was a resort there called the Travaasa, just right in the town. Hana is not really the type of place that you go to and stay at unless you go to this hotel. There’s not a city center. It’s people that live there and this hotel and that’s it.

35:45 Sean: So we went and we said, okay, you know, let’s do it. This sounds great, let’s go. The only thing I’ll say about traveling to Hana is getting to the airports, great, but there’s a very famous road there called the road to Hana and it’s like 90 degree turns the whole way. It’s 40 or 50 miles and it took us three hours. You’re crawling and it’s crazy. But scenery is amazing and beautiful. The little food stops on the way are great. And then once we actually got there, it was just like paradise. It’s still the States, so there is cell service, but there’s no wifi available. The cell service is kind of shaky, we turned our work phones off, and just lived, and it was awesome.

36:34 Sean: There’s there was a lot to do there. They have a spa on site. I’m not a huge massage/spa person, but I was the most relaxed I’ve ever been in my whole life that week. The food was awesome. There was waterfront yoga and like paddle boarding and horseback riding and just like all of this stuff that we don’t ever do in our daily lives. It was really awesome to just for once I think go and just exist. My wife and I, in particular, but I think more generally PhD students and other graduate students, you’re just going nonstop all the time, and there’s not really any moment where you kind of just sit back and you’re like, “Hey, I’m not thinking about anything about tomorrow, except whether I want to do this cool thing or that cool thing.” I don’t know, I think that was a nice refresher for us.

37:34 Sean: Everything about it was super chill. The only not super chill thing about it is, there was actually a wildfire on the West side of the island while we were there. We went back to catch our flight and all the planes are delayed because they’re trying to get people that live there, like out of danger. Things are, I don’t want to say fine because you know, wildfires are extremely dangerous and there was a lot of damage there. People are generally fine. There were a lot of people that got helped. Everybody was safe. I don’t recall seeing any reports of fatalities, which is incredible. But for us, we’re literally there with our bags in a very small airport on Maui and we’re just like, “all right, guess we’ll chill.” I think a small price to pay, obviously relative to potentially losing your home in a fire, of course. But for us, nobody told us anything. Our airline didn’t give us any updates. We just got there and they were like, we’ll see what happens. Like I said, there’s a much longer post about it with pictures that are describing it way better than I can tell it, but highly recommend. Would definitely do it again. It was great.

38:54 Emily: What really struck me about the, your description of this vacation was that I didn’t do anything like that when I was in graduate school, except for my honeymoon. The honeymoon was relaxing. I mentioned that we saved a lot for travel before, but it was all obligation travel, all of it. We were usually traveling domestically to either see our families, or go to weddings, or attend reunions. Other stuff where somebody else was dictating the schedule, the timing, the place, all of that. I’m not trying to say that was a…We wanted to do it. We wanted to do all that obligation travel. Going to weddings is really important to us. That’s a high value for us, but it just kind of squeezed out any other possibility of taking a vacation that was just for us and just for the purposes of recuperation. There were always other purposes for the trips — seeing certain people, or witnessing certain events. Looking back on it, I did not give myself a proper amount of rest, throughout that process. And it’s still something that I struggle with, so I’m really glad that you guys, made it a priority, made the time for it. Hopefully you’ll do it a few more, maybe not the same vacation, but something similar, a few more times during graduate school so you guys can finish strong and finish healthy. So that sounds amazing, and yeah, we can point people to the post from the show notes.

Financial Advice for Early Career PhDs

40:23 Emily: As we finish up here Sean standard question that I ask all my guests — what is your best financial advice for another early career PhD? And that could be something related to what we’ve talked about today, or it could be something entirely different.

40:36 Sean: Sure. Just because we’re towards the end, I’ll give two quick ones, because I think they’re both very important. The first one we’ve touched about a few times is if you aren’t budgeting yet, try to get there as soon as possible. Like you said, tracking expenses is great and it’s helpful to get you in the right mindset. But until you are, I think front end, saying this is the money I will have coming in, here are the places it’s going to go, you can’t really capture your values fully in like where to invest unless you’re doing it on the front end. So that’s the first thing that I recommend.

41:12 Sean: The other thing is, depending on your program, especially for PhD students on grants and fellowships, so kind of take that with a very specific niche market in mind, sometimes you will be allowed to pursue other things outside of your degree and have side jobs and side hustles. I know, recently talked to another student, here in Houston who, I think was baby-sitting or dog-sitting. Am I remembering that right?

41:39 Emily: Pet-sitting.

41:39 Sean: Pet-sitting, right. And like, okay, great. So she had a side hustle and that’s awesome. Sometimes you can and look around for what things are available because the extra cash is really useful. Sometimes you can’t, on paper. They expect you to be in the lab, and if you have time that you could be giving to another job, you should be spending it in the lab. And I think my recommendation for that is more of a career-related one. You’re a graduate student and you’re contributing to the academic space. That’s beneficial to the field. It should also be beneficial to you, and so I think that I always recommend that students take opportunities that they find, when they become available, in stride, because it may be a value add to their career or to their finances, that isn’t necessarily a value add to their academic education. And that’s okay. I think sometimes we get this feeling of guilt of like, I’m not working hard enough in the lab. And if that’s true, okay, work harder in the lab, but if it’s not true and you can be doing other things that are beneficial for you, it’s okay to do things outside of lab. And I really struggled with that when I first got to graduate school, and I see that as a common struggle now.

42:55 Emily: Yeah, I guess, so I’ve been reading a lot about like time management, recently, to work on my own time management practices, and I guess one thing I’ve learned, I’ve been reading and listening to a lot of Laura Vanderkam’s stuff, and so she references research that’s on…First of all, that people don’t work as much as they say they do. Like people who are reporting that they work 80 hour weeks, almost always are never working more than like 55 hours a week. They may be at work for 80 hours a week, and that’s not a good return on your investment of time, is just to be around more. You should be resting or doing other things instead of that. But another part of that is that there’s sort of an optimal amount of work that you can put into something in a given week, and once you start going beyond that, your returns for the amount of time you’re putting in decrease and decrease and decrease. After 40 or 45 hours, you may be putting in more time, but you’re not necessarily getting that much more of it. It’s kind of this like 80/20 principle.

43:51 Sean: Yup, definitely.

43:52 Emily: Yeah. So I’ll just say like on that time management component, that it can really be beneficial for you if you don’t consider research to be like a black hole, you just throw more and more and more and more time into, that’s not necessarily the best way to approach it, but rather more like managing your energy and managing your time as well. And if that gives you time to pivot to a side hustle or hobby or, you know, exercise or whatever it is you want to do, that’s probably going to end up giving you more energy rather than taking away from your work. Do you know what I mean?

44:22 Sean: Right, definitely.

44:22 Emily: Just like taking vacations, you don’t do it necessarily for the reason of being more productive, but you probably are more productive when you come back from it.

44:29 Sean: Absolutely.

Where to Find Sean Online

44:33 Emily: Where can people find you if they want to read your blog or follow up with you elsewhere?

44:37 Sean: Sure. I’ll send these over so you can put them on the show notes as well. The name of the blog is Authentically Average. It’s authenticallyaverage.com. No hyphens or spaces. On Instagram and Pinterest I’m @AuthenticallyAverage, one word. Twitter was a little weird and I have @AuthenticAvg. That’s where you can find all of the different ways to connect with me. The two posts that we talked about today are up as pins on Pinterest. I can send those over and people can look at them if they want to. I love using Pinterest, just as a side note, I think it’s been really fun. If you are in the 3D-printing space and see me at an academic conference, come and say hey. I’m not shy. If you happen to recognize me, I’m happy to talk and all of that.

43:33 Emily: Yeah. Well, thank you so much for coming on the podcast and having this great discussion with me, Sean.

45:37 Sean: Yeah. Thank you for having me

Outtro

45:39 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.

Dual PhD Couple in Seattle Spending $20k/Year on Rent

July 23, 2018 by Emily

In this episode, I break down my own budget from 2017. My husband and I earn about $100,000 per year and live in Seattle, WA with our two small children. I detail our top five expenses (rent, groceries, travel, kid spending, and transportation) as well as the financial goals that we’re currently working toward. I give some advice for a budget-conscious person moving to Seattle. Finally, I share what it’s like to be a renter in Seattle’s rapidly inflating housing market, spending nearly $20,000 per year on rent and feeling shut out of the housing market.

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Links mentioned in episode

1:05 Q1: Where do you live and what is your income?

My husband, Kyle, and I live in Seattle, WA, with our two daughters, a 2-year-old and a newborn. We moved here in 2015 for Kyle to take a job at a biotech start-up. I am self-employed; Personal Finance for PhDs is my main business, and I also have a side hustle. Our household income in 2017 was around $100,000.

Further reading:

1:40 Budgeting Background Info

Kyle and I practice percentage-based budgeting, which means that from our gross income we:
- Pay income and FICA tax
  - through payroll deductions on Kyle’s income.
  - through quarterly estimated tax on my self-employment income.
- Tithe (donate 10% to our church).
- Save into retirement accounts (20% in 2018, 18% in 2017).
We live on one income. Kyle earns most of household income and has a regular salary, so we base our budget entirely off of his income after the percentage-based allocations. All of my income after the percentage-based allocations goes to savings. This helped a lot when my self-employment income was irregular, although now I pay myself a salary.
We budget for our regular (monthly) and irregular (yearly) expenses. More details about this system can be found in Season 1 Episode 1.

Further reading: How to Pay Tax on Your PhD Side Hustle

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4:19 Q2: What are your five largest expenses each month?

Our total spending in 2017 was approximately $47,500 (excluding the above percentage-based allocations and health insurance premium paid as a payroll deduction).

5:09 #1 Expense: Rent

In 2017, we spent $18,870 on rent, which is a monthly average $1,570 and 40% of our total spending.

Our rent went from $1495 per month to $1645 per month.

We live inside Seattle city limits. Our apartment in older building with no amenities. The apartment is approximately 850 square feet and has two bedrooms and one bathroom. We chose the apartment based almost solely on location and price.

When we next move, we definitely want to get a place with a dishwasher! Our kitchen is pretty small. We cook and eat in a lot and with two little kids so we wash a lot of dishes every day.

6:38 #2 Expense: Groceries and Household Consumables

In 2017, we spent $7,733.54 on groceries and household consumables, which is a monthly average of $644.46 and 16% of our total spending.

This amount of spending feels high to me, and this is a category that I keep a close eye on.

We meal plan, eat virtually every meal out of our own kitchen, and usually buy food on the less processed side of the spectrum. We shop mostly at Costco and Fred Meyer and also a little at QFC. We don’t seek out organic or similar food except when we buy directly from the from farmer’s market.

Most likely the reason we spend a lot in this category is simply that we eat a lot, and the food we eat is on the more expensive side of the spectrum. These days, we alternate between eating low carb/Whole30-ish and eating the standard American diet, which means we are consistently eating meat and often dairy, which are both more expensive categories.

Our typical meals are:

Breakfast: Egg casserole with sausage, sweet potato, onion, and spinach.
Lunch: Chicken yellow curry, chili, sausage and eggplant hash, fish plus sautéed spinach or zucchini.
Dinner: Meat with vegetable, e.g., balsamic vinegar chicken and roasted asparagus. Kyle’s favorite meal: Brussels sprouts bowls. One of my favorite meals: Mexican breakfast bowls.
Snack: PB and almonds

Our toddler is a very good eater. We followed the baby led weaning technique, and now she eats the food we do plus more milk, fruit, and cheese.

9:57 #3 Expense: Travel

In 2017, we spent $3,482.47 on travel, which is a monthly average of $290.21 and 7% of our total spending.

I was surprised that travel ended up in our top 5 because I perceive that we travel much less than before we had children.

In 2017 we traveled on five occasions: two weddings, our 10-year college reunion, a memorial service, and to one of our parents’ homes for Christmas.

In addition to the flights, on various of these trips we paid for hotels, rental cars, meals, entertainment, and registration.

We definitely spend more per trip than when we were in grad school. Flying with a baby has spurred us to take direct flights at convenient times of day instead of purchasing the lowest fare available.

Our current frugal practice regarding travel is to rewards credit cards; we currently have the Alaska Airlines credit card and the Chase Sapphire Reserve credit card.

12:10 #4 Expense: Miscellaneous Kid Spending

In 2017, we spent $2,688.66 on miscellaneous expenses for our oldest daughter, which is a monthly average of $224.06 and 6% of our total income.

This is the category I have the least handle on as it is so unpredictable.

Our one regular expense included in this category was preschool tuition, but that only applied for a few months

Our spending out of this category was all over the place

Medical copays, occupational therapy copays, breastfeeding medicine.
Travel car seat and travel stroller (in addition to the ones we use at home).
Bookcase, mattresses for grandparents’ houses, jacket, and teether.
Toddler class at the local community center and zoo membership

This is a fly-by-the-seat-of-your-pants category.

I was surprised these miscellaneous kid expenses as a category cracked top 5 because our first-time-parent start-up expenses hit in 2016.

14:30 #5: Transportation

In 2017, we spent $2385.77, which is a monthly average of $197.98 and 5% of our total spending.

I really thought transportation expenses wouldn’t be in our top five; low transportation spending is a point of pride for me!

It turns out that 30% of the spending was from our regular monthly budget, and 70% was from our irregular expenses budget. Our regular expenses included gas and parking, whereas our irregular expenses included car insurance, registration, and maintentance.

We own one older car and don’t use it for commuting. Kyle has a sub-10 minute bike commute and I work from home. We generally just use the car for errands, activities with the kids, church, grocery shopping, etc.

Those irregular expenses hit in only 3 months of the entire year, which is why I sort of forgot about them. We pay our car insurance once every 6 months, and it’s inexpensive. We spent over $1000 in car repairs/maintenance in 2017, which was unusually high and not a yearly occurrence.

All of our top 5 expense categories together accounted for 74% of total yearly spending.

17:20 Q3: What are you currently doing to further your financial goals?

1: Retirement Savings

We save a fixed 20% of our gross income into our retirement accounts.

We actually don’t use Kyle’s 401(k) through work at all because of high fees. Instead, we put our retirement savings into our two Roth IRAs and my individual 401(k), which we had total control over. Kyle’s 401(k) is the account of last resort because there is no match.

Details on Emily's Roth IRA

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2: Down Payment Savings

In 2017, we saved 21.7% of my income and all of our self-tax refund for a down payment on a home.

Further reading: Creating Our Self-Tax Refund

In early 2018, paused our down payment savings to save into a fund to help with expenses and lost income associated with the birth of our 2nd daughter’s.

Once those expenses have settled, we’ll resume saving for our down payment. In the remainder of 2018, we plan to save a fixed rate from Kyle’s income plus 22.7% of my income.

Our initial down payment goal was $60,000, but now that we’re getting close to that number, we want to keep saving and perhaps make $100,000 our next goal. We’re not necessarily shooting for a 20% down payment, but having a lot of money available for the down payment, other fees and expenses, and moving costs will be good.

3: Kids’ College

We save a nominal amount of money toward our children’s college expenses. We plan to hit this goal harder after we buy our first home.

4: Paying Down Student Loan Debt

We are currently making only the minimum payments on a standard 10-year repayment plan on my student loans. Episode 1 explains why we have not yet paid off these loans. However, as of the day of the recording, we received an update on the loans and decided to pay them off completely.

20:47 Q4: What don’t you spend money on that might surprise people?

1: Kid Expenses

A: Childcare

We don’t spend much money on childcare because of the way we have structured our life. Kyle has a regular job, and I’m self- employed. I’m also our children’s primary daytime caregiver. I work when Kyle is home with the kids and when they are sleeping. In 2017, I worked around 20 hours per week with this system. When I travel for speaking engagements, we hire sitters through a service we subscribe to, but this is irregular. We don’t have any regular childcare as of now. We are considering hiring a part-time nanny this fall since we now have two kids to help keep my work hours up.

B: Diapering and Clothing

We cloth diaper, which means we paid a bunch of money for diapers in 2016 but not in 2017. We use disposable diapers when we travel and disposable wipes sometimes.

Further reading: Cloth Diapering in an Apartment

We didn’t have to spend any money on clothes in 2017. The communities we’re plugged into gave us lots of gifts, hand-me-downs, and borrowed clothes.

Further reading: Outfitting Our Baby with Hand-Me-Down, Borrowed, and Used Stuff

When we buy stuff for our kids, we often look to the secondhand market first.

2: Eating Out

We only spent $254.38 on eating out in 2017, which is an average of $21.20 per month. This is a shockingly low figure to me. Since having our first child, we basically don’t go out to eat or get take-out any more!

We don’t drink coffee, which many people pay for out of the house.

Kyle does buy a beer at occasional happy hours with his coworkers, which probably accounts for a good fraction of the spending in this category. I’m in a non-drinking phase of life due to breastfeeding and pregnancy.

3: Entertainment

Our only recurring entertainment expense is Netflix. We are still avid Duke basketball fans, but as we’re not attending games anymore that is an inexpensive hobby.

This low spending is a big change from before we had kids. We used to have season tickets to the Broadway musicals series our local theater, which is not something we’re doing now.

Most of our entertainment now revolves around our toddler: going out doing activities or playing with friends and even at home. We attend lots of free activities around Seattle: parks, toddler rooms and gyms at community centers, and libraries. We also hang out with her toddler friends and our kids tag along to game nights with our friends.

I’m chalking this low spending up to this being a unique phase of life! We expect to spend more in this category again later.

26:31 Q5: What are you happy with in your spending and what would you like to change?

Overall I am quite happy with our spending and progress toward our financial goals.

I don’t love that we spend almost $20,000 per year on rent, but it is reasonable for this city.

I’m not so happy with the grocery and kid expenses.

I feel like we’re spending a lot on groceries. I have some frugal practices, but could do more. During the Frugal Blitz this coming September, I will focus on frugalizing my groceries.

I don’t mind spending what we do on the children, I just want it to be more predictable! Perhaps we will institute a monthly cap on spending or try to anticipate the larger expenses as they grow.

28:11 Q6: What is your best advice for someone new to your city who is budget-conscious?

Focus on housing and transportation: Do your research in advance about where to live and what your commute will be like.

Renting and buying in Seattle is on a quick timeline. Places listed for rent are available immediately or like one week out, and little notice is required when you move out of a place. In 2015 when we moved to Seattle, the rental market was quite competitive. We had to make quick decisions on where to apply and compete with others.

We handled this market by researching the prices in the neighborhoods of interest before we started our moving trip, even though we were not expecting that any of those same rentals would be available when we arrived. This gave us the ability to spot a good deal.

Further reading: Apartment Search in Seattle

You should factor in your commute if you know where you’ll be working. A lot of people avoid the higher housing prices by living outside of Seattle, but that usually increases their commute time. We chose to eliminate the commute and pay the higher housing cost so that we could have more time together.

Don’t assume you’ll commute by car. Over 50% of people in Seattle commute by other methods: bus, biking, walking.

30:52: Q7: Would you like to make any other comments on what it takes to get by where you live on what you earn?

In Seattle, the high tech industry is quite dominant. Those positions are very well paid, and housing costs are being driven up quickly.

In 2017 and the first half of 2018, Seattle had the fastest-appreciating housing market.

Housing prices are heading up quickly, and it’s very discouraging for renters/first-time buyers.

Purchasing a home in our current neighborhood (maintaining that short commute) would be very difficult for us. Even earning $100,000 per year, the most we could afford in our neighborhood is the lowest priced condo possible. The median home value in our neighborhood is almost $1,000,000. The median condo price in Seattle is nearly $550,000. It’s also very hard to not get swept up in the hype of the market.

We are leaning against ever buying in Seattle. Housing is quite a struggle for first-time home buyers.

I’d love to hear from other PhDs (in training) who make less than what we do on how you manage your expenses!

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Heading to a Conference? Tack on a Vacation, Too.

May 28, 2018 by Emily

The opportunity for travel is one of academia’s most attractive perks. In just about any field, you can attend conferences and establish collaborations with far-flung colleagues. Certain fields also provide opportunities for travel through field work or archive visits.

A version of this article first appeared on GradHacker.

But what’s the fun in traveling to a new city or country if you only work while you’re there? It’s natural to want to combine personal activities with the professional duties that are the primary motivation for the trip. I recently surveyed (former) grad students to find out how they combined personal travel pursuits with professional travel opportunities.

Adding Personal Activities to Conference Travel Is Popular

Nearly all of the respondents to my survey shared experiences of adding on personal travel to conferences.

The easiest and lowest-stakes way to accomplish this is to spend the time you’re already not at the conference, such as the evenings, however you like. Grad students reported sightseeing, attending cultural events, sampling the local cuisine, hiking, and visiting friends or family during their personal time. Ron from Duke University suggested maximizing your time: “Use the “extra” time you have – evenings out for dinner and in the city, free time the day before and after the conference if your flight is late.”

The next level up is to add days to your trip that are purely personal time. A student at Yale University who did this frequently advised: “Tack on a couple days either over a weekend or on ‘going and coming’ days to hang out.”

Jenn from Duke University attended an American Chemical Society meeting in Puerto Rico. She vacationed on the island for four days before the meeting started, timing it so that she only missed two workdays. This was a unique travel opportunity for her, as most of her other travel during grad school was obligation travel. “This was the only trip I took where I felt it was a true/real vacation (ironic that it was for a work conference). I took a trip for me to do something I loved, in an exotic location. I still talk about it to this day 8 years later. I would 100% do it again.”

It’s also possible to make it a family vacation! While at the University of Michigan, Katy Peplin (Katy Peplin Coaching) visited the Scottish Highlands with her husband before attending a conference in Glasgow. Jennifer Polk (From PhD to Life) spent a week in a villa in Italy with her parents and friends before traveling to London for a conference while she was at the University of Toronto. Mariana from the University of Brasília typically spends one month of each summer in North America vacating and attending an annual association meeting with her fiancé. They even scheduled their wedding and honeymoon to coincide with one of these trips!

Conference Selection Based on Location

Some students took their personal travel desires into consideration when applying to conferences. Diane Burgess from Simon Fraser University advised: “Give some thought to picking conferences that will combine excellent networking opportunities with the chance to travel. I try to select conferences that are in cities I’d like to visit.” Alex from Duke University concurred: “Go to legit conferences that have academic value, but in places where you can also enjoy the outside stuff. It’s usually easy to do both.”

Who Pays?

Unsurprisingly, the personal aspects of these trips were only subsidized to the degree that they overlapped with the professional itinerary and available funding. Some students paid for their professional travel entirely out of pocket, but most survey respondents received partial or full funding for the professional aspects of the travel. Extra nights of lodging, personal activities and their corresponding local transportation, meals on bonus days, and airfare for family members were always paid for by the students.

Lauren wrote, “Conferences were a great opportunity to explore new cities, and taking a few days prior to or following the conference on my own dime was totally possible. Use conference funds for the conference, and self-fund personal travel surrounding it.”

A student from UC Davis suggested ways to stretch the conference funding: “Find flights on different days that are cheaper or equal price to the flight you would normally take so that the air travel is completely covered, minimize spending during professional events, and take advantage of any provided meals so that you can use your per diem to cover meals on the extra days you are traveling.”

Should You Ask for Permission to Add on Personal Travel?

The majority of the grad students who responded to the survey did not explicitly ask for permission to add personal travel on to their professional travel. A few told their advisors that they would be taking some additional time away from work, and a couple cleared their requests for staying extra time with the person who paid for their travel. However, the advice given by some of these grad students was to just be upfront with your advisor about your plans. A student at UC Davis who visited San Diego in conjunction with a conference wrote, “It’s pretty expected to do personal travel; it’s a not a big deal to ask about.” Ron from Duke University added, “The structure of the events and hints from coworkers made it clear that I should enjoy some sightseeing.”

Beyond Conferences

Conferences are not the only professional travel opportunities that can be combined with vacation. A student at Miami University traveled to Peru and Thailand for 10-day field expeditions, after which she took two weeks of vacation. She hiked to Machu Picchu, went birding, and scuba dived during these vacations. Kirstin from Baylor University traveled to Israel for excavations, adding on time to visit family and friends.

Vacationing Is Self-Care

Taking vacations during graduate school is challenging but necessary for basic self-care. Mariana from the University of Brasília lamented that “it’s virtually impossible to take vacations when you’re a grad student.” Combining vacations with personal travel rejuvenates students for a fraction of the money and time that might otherwise be spent.

A student from UMass Amherst wrote, “Adding personal travel gives you the opportunity to unwind before/after trip. Often nice way to take a break/reward oneself after a big professional accomplishment since our research/writing commitments can be so demanding at times and it can be hard to prioritize celebrating oneself.”

“Grad school is grueling, find some vacation time when you can,” implored Nicole from the University of Kansas.

Don’t Miss Out on this Opportunity

Professional travel to conferences or for research also presents an opportunity to recharge, experience something new, and visit friends and family. None of the participants in my survey reported any fallout from combining professional and personal travel, and many exhorted other grad students to follow suit. You can determine whether it’s better to leave your personal travel and activities unspoken or to ask for explicit permission, for example if you are extending your trip, as you know your advisor and field best. Piggybacking personal travel onto professional travel is a fantastic way to vacate while spending less time and money than you otherwise might. Don’t forgo this incredible perk of academic research!

Travel

April 8, 2015 by Emily

Grad students, like other young people, often have a desire to travel, whether it is to visit far-flung family and friends, to experience new adventures, or to immerse themselves in other cultures. While some grad students have a great amount of time flexibility to travel if they want to, they usually don’t have a lot of money to spare for this purpose. Fortunately, there are many low-cost or even free ways for graduate students to indulge their wanderlust.

Further reading: How to Spend Less When Attending Out-of-Town Weddings; 33 Travel Tips For Seeing the World on a Budget; How to Travel on a Budget and Still Have the Time of Your Life

Plan Combined Trips

One of the least expensive ways to vacate is to add a side activity to an already planned trip.

Grad students should attend at least a few conferences while they pursue their degrees, and these trips are often partially or fully paid from research grants, departmental funds, or conference scholarships. You can ask your advisor for the flexibility to extend your trip to more fully experience the city or country that the conference is in; in this case, you would likely only have to pay for the additional lodging, food, and entertainment costs as the transit itself is already paid for. You can employ the same strategy for other research-related travel you might need to do, such as visiting collaborators or accessing remote resources.

Even if you are paying for a trip yourself, look for ways that you can get the best value out of your stay. You may not be able to choose your destination for obligation travel, such as to weddings, but you can make the most of the trip by planning extra activities in the city you are visiting or traveling to a nearby attraction.

Spend Less on Transit

Getting to and from your destination is sometimes the largest cost when booking travel, but flexibility can help you reduce the price quite a bit. Slower forms of transit are usually less expensive than faster ones, so if you can take extra time away from work or work remotely you may be able to reduce your overall trip cost enormously. Look for carpooling options when your destination is within driving distance to avoid paying for individual seats. You can consider discount companies such as Spirit Airlines and Frontier Airlines; just be sure you calibrate your expectations for the lack of amenities and unusual fee structure.

Transit is also usually cheaper off of peak times, so consider weekday, holiday, and overnight travel. When you book your travel also can affect the price you pay. Booking well in advance (but not too far!) usually gets you a better price, and Tuesdays or Wednesdays are often rumored to be the cheapest days to book flights. Companies like MegaBus offer heavily discounted fares for the first people to book when a trip is listed.

Further reading: Secrets to Booking Cheap Flights: 12 Dos and Don’ts; Cheapest Days to Fly and Best Time to Buy Airline Tickets

Spend Less on Lodging

Once you arrive at your destination, you will have to find somewhere to lay your head. Crashing with friends or family is a great option if they are willing to host you as it is generally free and you get quality time with enjoyable company. Couchsurfing with strangers is also a free option, often facilitated by hospitality websites, but comes with risk. If you have to pay for lodging, look to lower-cost alternatives like hostels, camping, and individual renters like AirBnB or VRBO. If you want to stay in a hotel, book early and shop around for the best price. Booking hotels judiciously may help you spend less money in other areas of your trip, such as food (complimentary breakfasts) and local transportation (airport and nearby shuttles).

Further reading: Ditch the Hotel: 10 Cheaper Ways to Stay; 14 Ways to Save Money on Hotels for Your Next Vacation

Play the Rewards Game

If you are a frequent traveler, especially one who is brand-loyal, there is no harm in signing up for the rewards programs associated with the airlines or hotel chains that you use. You can build up rewards over time and ultimately score a free flight or free night’s stay.

If you are a responsible credit card user and have good credit, you may consider using travel rewards credit cards. There are general cards that give travel benefits of many types and also branded cards available for specific airline networks or hotel chains. Using these types of credit cards for travel purchases and sometimes everyday purchases helps you accumulate points or miles that you can redeem for free flights or lodging. Maximizing your rewards while minimizing your costs can be very time-consuming and tricky, requiring a lot of research and careful planning, but it becomes like a hobby for many enthusiasts. The rewards potential is there, even for graduate students who are often low spenders, but recognize the downsides of the time investment necessary and the potential for messing up.