Personal Finance for PhDs

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This Grad Student’s Defensive Financial Planning Paid Off During the Pandemic

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In this episode, Emily interviews Maya Gosztyla, a third-year graduate student in biomedical sciences at the University of California at San Diego. Maya has experienced major financial ups and downs over the three years since her first podcast interview. Her husband was unemployed for over a year between moving with her to San Diego and pandemic hiring freezes. However, she managed to support both of them with her grad student stipend and freelance side income thanks to negotiating for a spot in her university’s subsidized housing program. Now that her husband is employed again, they are aggressively pursuing FIRE through investing and enjoying occasional splurges.

Links Mentioned in the Episode

This Grad Student’s Defensive Financial Planning Paid Off During the Pandemic

Teaser

00:00 Maya: My husband didn’t have a job lined up at that point. We weren’t too worried, because San Diego’s a pretty big biotech hub. And so we were doing pretty well on just my stipend end of 2019. We got to 2020, things changed a bit. And so what we thought was going to be just like maybe like, you know, worst case, a six month-unemployment period, turned out to be like over a year of unemployment for him. So it was at that point that I was really happy that I had made the decision to choose a school that I could pay for on just my stipend. Because if we didn’t do that, we would have had a lot of debt after paying for just us that year.

Introduction

00:34 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 11, Episode 1, and today my guest is Maya Gosztyla, a third-year graduate student in biomedical sciences at the University of California at San Diego. Maya has experienced major financial ups and downs over the three years since her first podcast interview. Her husband was unemployed for over a year between moving with her to San Diego and pandemic hiring freezes. However, she managed to support both of them with her grad student stipend and freelance side income thanks to negotiating for a spot in her university’s subsidized housing program. Now that her husband is employed again, they are aggressively pursuing FIRE through investing and enjoying occasional splurges.

It’s January now and you know what that means: Tax season is upon us! At some point in the next three or so months, you will prepare and submit your 2021 tax return, and I am here to help. I have just released the 2021 version of my annual tax return workshop for graduate students, which is titled How to Complete Your Grad Student Tax Return (and Understand It, Too!). The goal of the workshop is to assist you in calculating and reporting your grad student income and maximizing your higher education tax benefits using your qualified education expenses. It supports your federal tax return preparation process whether you use software, employ a human tax preparer, or fill out the IRS forms directly. The workshop comprises videos and worksheets, plus I will hold live Q&A calls throughout tax season for any follow-up questions you might have.

There is another upcoming deadline that graduate students, postbacs, and postdocs should be aware of. The 2021 quarter 4 estimated tax payment is due on January 18, 2022 unless you plan to file your tax return by the end of January. This payment deadline may apply to you if you were paid by a fellowship or training grant for part or all of 2021 and no income tax was withheld from your paychecks. You can find out if you are required to make this payment by filling out IRS Form 1040-ES. If you need some help with calculating your payment, please join my workshop, Quarterly Estimated Tax for Fellowship Recipients. It shows you how to fill out every line of the form and answers common questions from the PhD population, such as when to make these payments if you switch onto or off of fellowship in the course of the calendar year. The quarter 4 live Q&A call for this workshop is scheduled for January 9, 2022. You can find links to these two workshops plus all of my free tax resources at PFforPhDs.com/tax/. By the way, I license both of the workshops that I just mentioned to university clients at a discounted bulk rate, so it’s well worth asking your graduate school, graduate student association, postdoc office, etc. if they are willing to purchase either or both on behalf of yourself and your peers. I hope you will use my resources to ease much of the stress of tax season. Again, you can find everything linked from PFforPhDs.com/tax/. Without further ado, here’s my interview with Maya Gosztyla.

Will You Please Introduce Yourself Further?

04:12 Emily: I am delighted to have back on the podcast, Maya Gosztyla. She’s actually contributed to the podcast three times before. So back when she was a postbac fellow, we did a full interview and season two, episode four, that was mostly about her side hustle. We’re going to hear an update about that later on today. And then she’s also given us two short updates. So season seven, episode 16, she gave us a quick update on how her finances and life were going. And then in season eight, episode seven, she was one of my anonymous guests on the podcast episode on negotiating your grad student stipend and benefits. So, because, you know, we’ve been kind of loosely in touch over the past couple of years. I know that a lot of interesting things have happened in Maya’s finances since we did our full interview. So I asked her to come back on the podcast to talk about all these various developments. So, Maya it’s really great to have you! Would you please re-introduce yourself to the listeners?

05:01 Maya: Yeah, definitely. I’m excited to be back on here after a couple of years. There are some updates. So yeah, my name’s Maya, I’m currently in my third year of my PhD program at UC San Diego studying biomedical sciences. And before this, I did my undergrad at Ohio State. And then I did a one-year postbac at the NIH.

Freelance Side Hustling

05:20 Emily: Yes. And so, that earlier interview that we did was all about your side hustle. So can you fill us in a couple of details about that side hustle?

05:27 Maya: Sure. So I’ve been doing this since like senior year of undergrad. I do some freelance science writing. And since then, I’ve gotten a little bit into science consulting and some freelance programming as well. So I’ve been doing that for a while, and it’s just kind of a way to both supplement my income and also to get some connections with various industries that I might not have met otherwise through my main research.

05:47 Emily: Yeah. I love that you started this side hustle so well in advance of grad school. So it was kind of already established. It’s really kind of hard to get something off the ground as a grad student, but I love that, you know, you already had it going and just had to maintain it.

How Taxes Played a Role in the Decision to Get Married

06:00 Emily: Okay. So we’re just kind of going to step through the last couple of years, since we published our interview. We conducted the interview in maybe like late 2018, early 2019, you were applying to grad school that year, or in that academic year. So things that have happened since then: one, I know that you got married, and I know that the timing of your marriage was influenced by tax matters. So can you explain how taxes played a role in when you decided to get married?

06:26 Maya: Yeah, definitely. So my husband and I, we actually, for a long time, were just like not planning to get married. We’d been together for close to 10 years at this point, like since high school, but, you know, neither of us is religious. We don’t really have any interest in children. So we just didn’t really see much of a need to do the whole legal marriage thing. But then as I started to research more about the kind of financial benefits of marriage, it started to become a lot more useful for us to get married, basically for like kind of a cynical my point, not very romantic view of marriage. And especially as I was going into grad school, as you mentioned, this was kind of the ideal time for us to get married. Partly because I was asking my husband to like move across the country with me and he didn’t have a job lined up yet.

07:04 Maya: So I thought that was kind of a big financial risk for him. And I wanted him to have a little legal protection, I guess. But as you said, the tax reasons were kind of the main thing. Probably most people know that when you’re married filing jointly, your overall tax rate usually goes down somewhat. That can vary depending on your exact incomes. But for us, the thing that kind of made us get married at that point was because I was still eligible for the kiddie tax from my first year of grad school, which is basically, I think it was established so that it was like people who were rich used to kind of give their adult children some of their stocks and like use that to kind of avoid taxes on their part. And so to avoid that if you’re under age 26 and you have unearned income which includes capital gains, but unfortunately also includes a lot of grad school fellowships and scholarships.

The Kiddie Tax

07:50 Maya: Your taxes are like really high on that. Like, I don’t know the exact number, but it was like 20% or something ridiculous like that. So for that first year of grad school, I was only 25. So, I think I was actually 24 going in. So like, I didn’t want to have to pay that crazy tax rate. And if you’re married, you don’t have to pay the kiddie tax. So that right there probably saved us a few thousand dollars. And it also ended up saving us more money that year because we qualified for the retirement savers’ credit which normally, you know, if it was just me, my income would have been a little bit above the limit to get like the maximum benefit. But because we were both below the limit, because my husband didn’t have a job during that first year, which we’ll get into later. Our combined income was low enough that we basically each got a thousand dollars back for that tax credit. So $2,000 plus the kiddie tax savings just for getting married that year.

08:37 Emily: Yeah. I’m sure it’s something that most people don’t think about, especially at the age that you were, you know, 23, 24, that kind of age. So yeah, people want to learn more about the kiddie tax like issue, I have an article on my website it’s linked from PFforPhDs.com/tax. You can find it linked from there. But basically, it’s pretty little known, but as you said, it’s meant to tax unearned income, but unfortunately fellowship income is defined in the same way. It’s defined as unearned income. And so yeah, grad students and postbacs like you were, can get into this strange, like potentially higher tax situation. Now around the time that you were like getting married, making these decisions, the kiddie tax was going through a little bit of a shift. So I think maybe in the year that you got married, it was the worst that it ever got because it was yeah, like the Tax Cuts and Jobs Act, which was passed, I guess at the end of 2017, so effective in 2018, it increased the kiddie tax rates up to the like trust rates.

09:38 Emily: But then after a year or two, they realized what a problem that was, especially for low-income college students. And so they brought it back down to like your parents’ tax rate, which is what it was before. Which is great if your parents are low income and that’s the reason you’re receiving grants and stuff. But like for a lot of graduate students, we received this kind of aid for merit reasons, and not necessarily because your parents have this or that kind of income. And so it can hit students and postbacs and stuff who are not dependents of their parents. So not necessarily even receiving support from their parents, but their parents’ tax rate is considered in their tax rates. So it’s really messed up. But as you said, marriage gets you out of this. It’s like the get out of jail free card for the kiddie tax, and for some other matters like this. So yeah, as you said, not very romantic, but a very practical reason. If you’re already set on being together long-term to have the legal protections, as you said, of marriage in place, and having these kind of extra weird tax benefits, like you mentioned the retirement saver’s credit as well for your husband, presumably.

10:35 Maya: Yeah, it ended up being really important, especially during my husband’s unemployment period, because one of the things that came with marriage was that he can be on my health insurance. And when he aged out of his parents’ health insurance, we would have had to pay much higher rates if we were not married. So it was a benefit that I wasn’t like even thinking about going in, but things like health insurance, also the ability to like open an IRA and contribute for each other. Like since I don’t have any earned income during grad school, I normally wouldn’t be able to use an IRA, but being married lets us do that. And there’s probably even other financial benefits I haven’t figured out yet. So I think it’s a good thing to be aware of that even if you don’t really have like romantic or religious reasons to get married, it’s sometimes still useful just for the financial reasons.

Marriage Penalty or Benefit

11:12 Emily: Yeah. I want to say actually a small correction because it was the case that you couldn’t contribute to an IRA, but that law has changed as of 2020. So even with fellowship income. But for your husband, now, if your husband, as we’ll get into, he went through a period of unemployment. As a spouse, he can still contribute to an IRA based on your earned income. So it’s like anyway, double benefit there. But yeah, it’s really interesting. I’ll try to link it from the show notes. There’s like a graphic, it’s probably from the New York Times or something, where it shows you where there’s a marriage benefit and where there’s a marriage penalty in terms of does having, you know, this income range mean lower tax rates or higher tax rates if you’re married.

11:49 Emily: And depending on where you are, it can either have no effect, there can be a benefit, here can be a penalty, I think down where I’m assuming your tax rates are, it’s neutral, there’s no benefit or penalty. But as you get into like higher incomes and more disparate income, sometimes those things can come into effect. Super interesting. So thank you for telling us about the kiddie tax. Ah, good to be reminded, especially in tax season. Okay. So that affected the timing, the fact that you got married, the timing of it and so forth, and then okay.

Role of Finances in Grad School Selection

12:15 Emily: Going into like application season, admission season, this is kind of just after we did our interview. Did finances come into play for you in considering your various offers or your selection of where to attend graduate school?

12:27 Maya: Yeah. Finances are definitely like probably in my top five or maybe even three criteria for choosing a grad program. I think everyone knows you’re not going to be like living large on a grad stipend, but I at least wanted to not have to have finances be like something else I’d have to worry about on top of my research. And I think some people, especially if you’re going into grad school in a long-term relationship, or if you’re married, you might think that maybe it doesn’t matter quite so much, because you could rely on your spouse’s income. But especially if your spouse works in a field where jobs aren’t always long-term, it’s common for people to like get laid off quickly or switch around jobs. I think it’s really important to be able to support not just yourself, but also both of you for at least a short period of time on just your grad stipend, and not think like, “Oh, I have a spouse, so therefore I don’t have to worry about it too much.”

13:12 Maya: So like for example, in our case, I really wanted somewhere where maybe we won’t be living like with anything extra really, but at least we can survive and like pay the rent and buy food on just my income. Which is like just barely the case where I am at UC San Diego. That’s kind of like right on the border of like slowly losing money over time. But there were definitely some other schools like I’ll mention like the Bay Area, several schools in that area where their stipends are a little higher than here in San Diego, but definitely not enough to cover like the difference in cost of living. And that made me really hesitant to choose any of those schools.

Subsidized Housing

13:43 Emily: Yeah. I really appreciate your mindset going into this. “Okay. I want to be able to support two adults, if necessary, for a short period of time.” And I know this is a situation that often comes up for international students who are bringing spouses along with them who don’t have, you know, the clearance to work in the U.S. And so that’s a major, major consideration for them. I’m really glad you brought that up. And I’m glad that you mentioned like other schools, California, different areas. Now some schools, like ones in the Bay Area maybe, and I know at UCSD, offer subsidized housing. So how did that come into play with your decision-making?

14:16 Maya: Yeah, housing is like, I think for most people, their biggest expense. So any way I could bring down my housing costs was a big plus for me. One of the schools I interviewed at was UCSF and they do have subsidized housing. But it’s not guaranteed, like you’re not guaranteed a slot in grad housing. And in general you only get to stay there like one year, sometimes two. So that was kind of like, made me a little nervous that I might have to pay full Bay Area rent for most, if not all, of my grad school. Here in San Diego, we also have subsidized grad housing. For us it’s a two-year limit. But I was able to, as I talked about in that negotiation video, I was able to negotiate into this program at UCSD, which is designed to recruit grad students to school, where they basically guarantee you a spot in grad housing as soon as you get there, and you get to stay until you graduate. So you don’t have to move out after two years. So basically once I got into that program, that kind of like sealed the deal for UC San Diego for me. It just made it like, like much more comfortably affordable and it just like gave me a lot of peace of mind to not have to worry about rent increases as much.

15:14 Emily: Yeah. That is incredible. Okay. So did you know about that program? Or was it something that you kind of inquired about housing, and then they told you about it? Like how did the conversation go?

15:26 Maya: Yeah, it was kind of actually something that my student host who was the one like driving me around to interviews told me about, because she was also in that program. It’s kind of a weird word of mouth thing. Like the university doesn’t really advertise it, but it’s also the kind of thing where like, if you bring it up, you’re much more likely to get it. So it can be helpful if you interview at a school, you know, even if no, one’s like really mentioned any subsidized housing, maybe some don’t even know about it because they’re not in like the subsidized housing, you know, special program, just like ask around. Because sometimes just knowing about it can really help your odds of finding something like that.

Negotiation Often Starts with a Simple Question

15:55 Emily: That’s incredible. And I think that negotiation often starts that way just like by inquiring sort of innocently like, “Oh, are there any like benefits I should know about? Any special programs I should apply for?” And how did you end up actually getting it? Like, was there an application process? Or how did you know that you secured the spot?

16:13 Maya: Yeah, so basically right after I got my official acceptance to the program and they wanted to know like, was there anything else that could answer my questions or things to basically convince me to join? And at that point, I basically sent them an email saying, “I’m really interested in the program. I also got accepted to this other school, which has a similar stipend, but is in a much lower cost of living city. If there was anything that UC to do to lower my housing costs, such as this subsidized housing program, I would basically commit to UCSD right now,” is what I told them. And then I just sent that email to the grad program. They went back for like a week or two to, I don’t know, discuss something. And then they just emailed me back and said, you have a slot in the program. There was no formal application or anything like that. So it was a very informal thing. I think other people who don’t ask about the program, just get that in their initial offer letter. Like if they’re just a really competitive candidate, they might get that off the bat. So I think it varies between people, but that was how it was for me. It was a pretty informal process.

17:06 Emily: It’s amazing, I won’t say everywhere, but at some kinds of programs, what recruitment strings administrators have to pull on that you would not know about if you weren’t really just like, kind of openly communicating with them. And I think it’s really smart to just say like, “Hey, like I have financial concerns right now. I’m looking at other offers, and what can we do here to like sweeten the pot?” Because as you said, you know, you’re obviously interested in the program, you know, passionate about the program and wanted to go, but like, there’s just this one thing holding you back. And that’s honesty, but it’s also a negotiation tactic. So I’m really, really happy to like hear that story again. Were there any other ways you wanted to mention that finances played a role in your decision of where to go to grad school?

[Addendum: After the conclusion of the interview, Maya shared that UCSD is increasing the rent for on-campus housing for new tenants. Maya’s apartment would rent to a new tenant for over double the price she currently pays. Therefore, subsidized housing at UCSD for grad students matriculating in 2022 may not be a deal compared with unaffiliated housing. More info here.]

Stipend and TA Requirement

17:50 Maya: The stipend was definitely the biggest thing. The other thing to look at, I think, was whether you have to TA to get that stipend. There are some programs, especially with things that are more like a biology program, as opposed to like a biomedical program, where you sometimes have to TA multiple quarters to basically get that stipend, which can really extend your time to graduation. So even if you’re making the same amount, like if you have to be an extra year in grad school, that could cost you like a year of entry-level industry salary, that could be a six-figure difference. So having a program where you may have to TA like one quarter, or like maybe not at all, can make a really big difference to not have to like extend your graduation time, which my program, we only have to TA one quarter. So as soon as that’s done, you can just focus on research. So that’s a big help as well.

18:31 Emily: Yeah. Super, super good point. And I cover this in my course inside the Personal Finance for PhDs Community called like Decipher Your Grad Student Offer Letters or something like that. And that’s one of the points that I go into is like, what is the reason that you are receiving this stipend? What do you have to do to receive it? And if you’re receiving a stipend because you’re TAing, then that is a time commitment. It’s at a part-time employment time commitment of you that doesn’t necessarily exist at all if you’re on fellowship or if you have a research assistantship where, you know, you’re working towards your dissertation the whole time. So really, really important point for any prospective graduate students to consider. So thank you for that.

Commercial

19:09 Emily: Emily here for a brief interlude! Taxes are weirdly, unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2021 tax return, which are available at PFforPhDs.com/tax/. I hope you will check them out to ease much of the stress of tax season. If you want to go deeper with the material or have a question for me, please join one of my tax workshops, which are linked from PFforPhDs.com/tax/. I offer one workshop on preparing your annual tax return for graduate students and one workshop on calculating your quarterly estimated tax for fellowship and training grant recipients. The 2021 quarter 4 live Q&A call for the quarterly estimated tax workshop is this coming Sunday, January 9th. Please be aware that the deadline to make your quarter 4 payment, if applicable, is January 18th if you are not planning to file your tax return by the end of January. It would be my pleasure to help you save you time and potentially money this tax season, so don’t hesitate to reach out. Now back to our interview.

Financial Transition at the Start of Grad School

20:45 Emily: Okay. So let’s kind of fast forward. You’ve chosen UCSD, you’ve gotten married, you’re starting the school year. Tell me about the move, the transition to graduate school, especially financially.

20:56 Maya: Yeah, so we moved, I think basically the day after my fellowship at the NIH ended. We just like moved right to San Diego and started getting moved in. My husband didn’t have a job lined up at that point. He has a bioengineering just bachelor’s degree. We weren’t too worried at that point because San Diego is a pretty big like biotech hub, and he was already like getting some interviews after we moved there. And so we were doing pretty well on just my stipend end of 2019. Obviously, we got to 2020 things changed a bit. He’d been getting a lot of interviews and actually already had an offer in hand. But as soon as the pandemic hit, that offer got rescinded. Companies started going remote only and didn’t really want to train any new kind of biology, tech positions like that. And so what we thought was going to be just like, maybe like you know, worst case, six-month unemployment period turned out to be like over a year of unemployment for him. So it was at that point that I was really happy that I had made the decision to choose a school that I could pay for on just my stipend. Because if we didn’t do that, we would have had a lot of debt after paying for just us that year.

21:52 Emily: Yeah. That’s I mean, you couldn’t have seen what was coming, but like your just general emergency worst case scenario like planning really kicked in there. So that’s great. I can’t imagine it was very pleasant. Do you want to share anything about how, I mean, I guess everyone was kind of not really doing anything for most of 2020, like how did it go for you in terms of like actually living on that one stipend?

Managing Living on One Stipend

22:17 Maya: Yeah. I mean, one thing that definitely helped a lot with, I think I mentioned in my original interview that I had been saving really aggressively during my postbac to get kind of an emergency fund built up. And I still had that during grad school and that was super helpful. We ended up not really needing to touch that. We didn’t have any major emergencies, but just knowing that, if something came up, like, especially, you know, what if one of us had to go to the hospital or something, we would have that cushion was really helpful. But on the other hand, with like zero cashflow every month, like I was just really hesitant to spend at all beyond my stipend. Like, you know, if we had to use some of that emergency fund, we’d have no way to replenish it at all. So we had to be kind of like kind of hermits for the whole year.

22:54 Maya: Having subsidized housing definitely helps. One of the things that helped were, like, for example, we share a really old used car that we bought in cash before we moved here. It was very cheap. And I actually don’t even use that car. I bike to lab every day. So there’s basically no like gas maintenance costs at all. We just have that for like buying groceries once a week. So that definitely lowered the cost a lot. Parking is also really expensive in San Diego, so that saved us I’m sure several hundred a month easily. And also things that weren’t really within our control, like for example, loan forbearance, like, you didn’t have to make any loan payments. If we had to make those payments, we probably would have been like bleeding money a little bit during that year, for sure.

23:30 Maya: And then also my side hustle, which we mentioned, I kind of like cranked that up a little bit during that year for obvious reasons, and my husband did some of that too, while he was applying for jobs which, you know, it doesn’t bring in that much money. You only have so much time as a full time grad student to side hustle. But having that extra couple of hundred a month was like really helpful, allowed us to kind of like, maybe once a month we’d like get some takeout and like that money would come from my side hustle. So just like those, you know, occasional things where we’re just really tired and just want some cheap Chinese food or something. Like we could actually do that without having to be super anxious about just like taking from our emergency fund for that kind of thing.

Dual-Income Household

24:02 Emily: Yeah. Thank you so much for sharing that. It sounds like a difficult time, like not really having any outlets, like sort of literally, and also financially. But, eventually the corner turned and he did get a position. And when did he get his full-time job?

24:19 Maya: He first started at the beginning of this year, so just like January 2021, making very little money, like basically the same as my stipend, which is like pretty low. But then like a month or two after that, he got a new job at a different company paying quite a bit more. So we actually have some like positive cashflow, which is like a very welcome change after more than a year of having very little money.

24:39 Emily: Yeah. That’s awesome to hear. And I guess there’s been sort of a sea change with employment generally in that time. And so he probably has a lot, I don’t know, it’s actually a good time to be getting jobs like now, or, you know, earlier this year. That sounds really good.

24:52 Emily: So finally, you had a dual income household. Did you make any changes to your finances? Aside from maybe having a little bit of, you know, loosening up on the purse strings a bit. Did you have any like financial goals that you were working towards, or anything like that?

Financial Goals with Dual Income

25:05 Maya: Yeah, definitely. It was definitely like a pretty slow process. Like I think probably for the first six months of this year, we kind of still lived like hermits, because we just didn’t know like, you know, what if he loses this job again? Like what if like there’s another resurgence in the pandemic and things close down? Like we just didn’t know what’s going to happen. But I just started getting into summer and like things were kind of semi getting back to normal, we did a couple of things to kind of like actually start not just like saving money but investing it. So we’re both really interested in like FIRE, like financial independence retire early. And we had basically had been making zero progress on that, because obviously we just didn’t have any money to invest. But now we actually are able to do things like take some of our savings and put that into our IRAs.

25:40 Maya: And we’re able to max those out this year for the first time. We also had some just for our actual emergency savings, we converted some of that into I bonds, which pay a little bit more interest, like something, I think they’re like five or 6% right now just to keep up with inflation which we couldn’t do before, because you can’t touch them for a year after you put them in I bonds. But now that we have like a bit more of a buffer, we felt comfortable doing that. So we get a little more interest there. And the other thing was that I still do my side hustle, but I’m much more selective now. I’m not just like working crazy hours all weekend. And I’m able to basically just take the jobs that like pay really well per hour and are also interesting to me. And now that money, instead of being like spent every month, I just put it all into a solo 401(k). So that’s all just kind of extra money that our budget never sees. It just goes right into our investments.

Side Hustle Balancing Act

26:27 Emily: Yeah, I want to follow up on that a little bit. So that’s cool that you’ve been able to make these extra moves in your finances, like especially doing the IRAs in 2021. That’s awesome to hear that. Yeah. Talk to me a little bit more about the side hustle. So now that you, you know, feel like you don’t to have the money coming in because you’re depending on it, you said you’re more selective. Does that mean that you’ve increased your pay rate either what you’re asking for, or just you only select jobs that pay more?

26:53 Maya: Yeah, so basically, there’s kind of a balancing act, right? So if you increase your pay, you get fewer customers, but you also like maybe you don’t need as many because you’re making more. So during the pandemic, I kind of had a certain balance where like I wanted to just like maximize money per month, regardless of like hours. But now that I’m limiting myself to closer to like five hours max per week, oftentimes less, I’m definitely cranking up the pay. Like these days, since I have a good bit of experience, I charge a hundred dollars an hour or more sometimes to offer these clients. And they’re all things that I like personally enjoy. They’re not just like boring articles that I’m slugging through. So that’s been helpful, both to just like keep me motivated, like I think I would’ve started to hate it if I had to keep doing it for just any job that would come in. Now it’s more of just like a hobby that I happen to get paid for.

27:35 Emily: Okay. Hold up. So you just said that you work about five hours a week and are looking at a hundred plus dollars per hour. So that’s 2000 a month, if you work consistently. Now that’s rivaling your stipend. I mean, I’m sure your stipend’s a little bit higher, but we’re in the same, like ballpark now. That’s incredible. And so you are, as I understand, you’re not incorporating any of that income into your budget, it’s just going straight into your individual or solo 401(k), right?

28:01 Maya: Yeah, definitely. I mean, I don’t always do five hours a week. It’s kind of the upper limit, but yeah, it’s kind of tough. Sometimes I’m even tempted. I’m like, why am I working extra hours in my lab when I could be making like 10 times this hourly rate on my side hustle? So yeah, it’s like very tempting to work more at it. Honestly, I’ve had to kind of like restrain myself.

Networking via Science Writing

28:17 Emily: That’s something that’s really, really good to be thoughtful about. Because like, so for you, does this freelance writing play into your ultimate career goals? Or is this just something you do for the time being?

28:28 Maya: It’s something I’m just trying to keep open as a door. I don’t think I’d want to be like a full-time science writer, but it’s more just like I’m meeting a lot of people at companies. Like I’m more interested in like a research biotech type position. But a lot of the jobs I do, even though they’re writing, are for like biotech and pharma companies. I’ve even had people like offer me like jobs as like maybe like if you drop out of grad school, we’ll give you this job. And I’m obviously not going to do that, but be great to follow up within a few years and be like, “Hey, I actually graduated. Can I get a job there now?” So it’s more just like those connections that I think are really valuable rather than the actual, like specific writing experience that I’m doing.

29:00 Emily: That is amazing that it can serve as a networking tool as well for your future position. But yeah, I do think it’s smart to limit the number of hours you spend on this because obviously the graduate degree and how well you do with that and how much you publish, whatever, it’s still going to matter for getting your next position. So yeah, don’t leave grad school to do your side hustle full-time. But yeah, that’s an amazing rate. I’m so, I mean, like you said, you’ve been doing it for several years, it’s been what, like four years now or something? So like you’ve built up the skills and the networks and so forth. But like, that’s awesome. So that’s rivaling your stipend, but it’s all going into investments. You’re pursuing FIRE. I do want to mention, I have, again a course inside the Personal Finance for PhDs Community called, the title is like Best Financial Practices for Your Self-Employment Side Hustle.

29:45 Emily: And it goes into the choice of what retirement account to use. If you have, it’s like basically for exactly your situation: you’re in grad school or a postdoc or whatever. You have a side income, you’re self-employed, you’re already maxing out your IRA. What do you do next? And you know, not being offered a 403(b) or whatever through your primary position. Well, because you’re, self-employed, you have the opportunity to open up a self-employment retirement account. You chose the solo 401(k). I did the same thing for my business, so I know what an incredible tool it is. But that is like, if your goal is FIRE, that is really supercharging your progress compared to what you would be doing, you know, just as a grad student who’s not side hustling, so wow.

Being Selective with Clients

30:23 Emily: How are you, I don’t know, like, it seems like there are so many benefits doing it. Like you said, the money you needed it. Now it’s more of an elective thing. And the networking. How do you stay motivated to do that work?

30:36 Maya: Yeah, I think it helps that I’m just very selective in clients. And like, for example, even if the work is interesting, if the client is even kind of like slightly annoying, like if they don’t respond quickly or they like ask for a bunch of edits and don’t want to pay you extra for it, I just like don’t have a reason to take them. So I think it helps to kind of value yourself and to charge what you’re actually valued. And I would encourage people, even if they, like, I started out like, I think like 10 or $20 an hour when I first started. But every single time I got a new client, I would ratchet up that rate just a little bit. And I was expecting like, there to be kind of a cliff when no one would hire me anymore. But like, people kept hiring me.

31:09 Maya: I think some companies like, you know, even if they’re paying me a hundred dollars an hour, if I’m only doing like one or two hours of work for them, like that’s like nothing to their company budget. So even if it feels like a really high rate to you and it makes a big difference in your budget, oftentimes companies will just like take your high rate as a sign like that you must be good at what you do, and they’re willing to pay it. So I would encourage people if you’re doing any kind of side hustle to like slowly increase it until you start to like lose clients and then you can kind of back off.

Advice for Starting Freelancing

31:35 Emily: That’s really, really good advice. And do you have any advice for someone who wants to get started with this line of work? Thinking back to when you were doing it in college, like how did you get your first few clients?

31:44 Maya: Yeah, that’s definitely the hardest part is getting your foot in the door. It helps to use Upwork and those kinds of freelancing websites. Just because if you don’t have any way to like find clients, it’s pretty hard to like get them to hire you. Thos sites, you take a pretty big kind of your pay. It’s something like 20% usually, which can feel kind of painful, especially when you have to pay like 30% ish self-employment tax on top of that. But it helps to start out there. And then sometimes if you have a long-term client, you could go just like bill them directly after you’ve established yourself on there. So using those sites is helpful. And also just kind of networking. If you know like anybody in your lab or anybody else who has some experience in the area that you’re trying to get into, they’re almost always willing to help you find the job. Like I’ve given other people who I’m friends with science writing jobs. Like sometimes if I don’t have time for a client, I’ll like send them to one of my friends who wants to get started and like, they don’t have any experience yet, but because I recommended them and they trust my opinion, they’ll get that job. So those two things together, like being on the website and getting help from other people who are in that network are really helpful.

32:45 Emily: Amazing, amazing advice. And I do want to add, we did a podcast interview with Courtney Danyel in season six, episode 17. Courtney has a business called Endless Freelance Income. So she’s a freelancer herself, plus she teaches other people how to do this. So that’s a great interview also, if you want to get started with not just freelance writing, but like a variety of sort of services that you could do on a freelancing basis. So that’s incredible.

Breaking Away from the Poverty Mindset

33:07 Emily: Maya, it’s been so wonderful to catch up with you! Is there anything else that you want to add about what’s been going on with you financially over the last couple of years?

33:14 Maya: Yeah, I think it’s just definitely been a big time of transition. We’ve gone from just like being pretty much broke, like not really broke because we had an emergency fund, but feeling very broke to actually having like more than double the income we had last year. So yeah, it’s been really nice to be able to not only work toward our investment goals, but actually be able to like, as you said, buy some things that actually improve our life a little bit. Like even just small things we never would have bought last year. Like for example, we have to carry out groceries like about quarter mile from our car to our house. And so we finally bought like a wagon, like it was like a hundred dollars to buy this wagon and like, it is the best purchase we made.

33:46 Maya: Like we never would have bought that last year, but just that’s like now it seems like a small expense. It’s like, well worth it. Like recognizing those things that like, okay, now you can actually afford these things like greatly improve your life and like probably our health so that we’re not like breaking our backs with like tons of groceries. Like that’s really nice to have. So I think it’s good to recognize, like, even while you’re pursuing your investment goals, like still save a little bit to like, not be like having that poverty mindset and trying to actually improve your life a little bit too.

Financial Independence, Early Retirement (FIRE)

34:12 Emily: Totally, totally agree. And I’ll just add another question in here. Your motivation for pursuing FIRE, financial independence and early retirement. You’re in grad school, it seems like you’re planning for a long and wonderful career. How does FIRE play or not play with your career goals?

34:30 Maya: Yeah, it’s kind of a weird thing for people to say in grad school. I think sometimes it’s like, why would you go to school for this long if you don’t want to like work your career for much longer after that? I personally don’t think I would necessarily want to fully retire once I hit that number. Partly for me, it’s just a security thing. Like, you know, if I’m in a job I don’t like, and I want to maybe take a year off and go on sabbatical and then come back and maybe it’ll take me a while to find a new job. I want to be able to do that. And even if I think for now that I really love doing what I do, maybe when I’m 45, I won’t like it anymore. Maybe I’ll never want to look at a pipette ever again, who knows.

35:01 Maya: And also just the freedom for like, for example I’m really interested in the idea of working less than 40 hours a week someday. Maybe even as a freelance basis, like not necessarily in writing but maybe as a consultant or something like that, like maybe just a freelance bioinformatician. I don’t know having the freedom to do that as well is nice. So I don’t necessarily plan to do the traditional, like I hit 45 and I have X dollars, so I’m just going to retire. I have like a lot of options available to me now.

Best Financial Advice for Another Early-Career PhD

35:26 Emily: That’s great to hear. I’m actually, well, by the time this is out, by the time we publish this, this will be out again inside the Personal Finance for PhDs Community. I’m currently working on writing an e-book. It’s going to be titled something like How to Pursue FIRE in Grad School. And so I just love it when I get to meet someone who is doing that and get their like reasoning behind it and how they’re doing it. And the strategies that you’re using are now going to be kind of featured in that e-book. So that’s awesome. If the listener is interested, you can check it out, PFforPhDs.Community. Maya, again, it’s been so wonderful to talk with you. Would you please answer, I don’t think you got to answer this the last time we talked, share with the listener your best financial advice for another early-career PhD?

36:04 Maya: Yeah. So I’d say kind of like a three-pronged approach with it. I think, I don’t remember who, some professor told me this like a long time ago, which was like invest aggressively in your future, and then invest aggressively in your current self. And then everything that isn’t those two things, like cut out pretty ruthlessly. So I think what he meant by that was basically, you know, even if you can only invest $50 a month in your IRA, like do that and commit to it. Also invest in your current self, like, you know, these are my twenties, like I’m not going to be 25 again. So like if someone’s like going whale watching this weekend and it’s a hundred dollars, like if I can make that work, I’m going to do it. I’m not going to be like, “Oh, that could have been going into my retirement.”

36:39 Maya: So it kind of balance those things and be pretty aggressive about doing the things that are really important for your current self and your development as a human. But everything that isn’t those things, like just cut out. Like, you know, I could buy a car, it would make my life mildly more convenient to not have to bike every day. But that’s not something that I feel like really enriches me as a person, or it makes me that much happier. So I don’t do that. So I think that’d be my advice is to figure out like, what is really important to you now and in the future. And don’t feel any hesitation about having to cut out things that aren’t in those two categories.

37:08 Emily: I have never heard it put that way before, but that really resonates with me in my like current mindset towards money. So I’m really glad that you shared that with us. Maya, thank you again for joining us! It’s been wonderful to catch up with you!

37:20 Maya: It’s good to talk to you! It’s been a good three years overall, despite the rocky start.

Outtro

37:29 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? I have collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. If you’ve been enjoying the podcast, here are 3 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with a email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and increasing cash flow. I also license pre-recorded workshops on taxes. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

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