In this episode, Emily interviews Keiland Cooper, a fourth year PhD student in neuroscience at the University of California, Irvine. Thanks to his inquisitive nature, Keiland has developed a financial philosophy that he has applied to his own financial management practices since his days as an undergraduate. Through focusing on the big picture, he has increased his income as a graduate student and right-sized his housing and transportation costs, which has enabled him to accumulate cash savings and invested assets. You won’t want to miss Keiland’s insight at the end of the interview into the optimal money mindset for a graduate student.
Links Mentioned in this Episode
- Personal Finance Notes from Keiland
- PF for PhDs Office Hours
- PF for PhDs S13E4 Show Notes
- PF for PhDs Community
- How Effective Altruism Works (Stuff You Should Know Podcast Episode)
- PF for PhDs Subscribe to Mailing List (Access Advice Document)
- PF for PhDs Podcast Hub (Show Notes)
00:00 Keiland: We’re all PhD students. Think of it as like a research project, right? There have been times when I’ve sat down and like analyzed my financial data in Python, right? It’s, you know, it’s kind of fun to sit down and play with the spreadsheets and add things up. Most of us are nerds here, and finance can be a very nerdy topic. So, it doesn’t all have to be scary. And certainly, all of us are getting PhDs, so we all have the aptitude in one way or another to learn about these topics. Even though some of them might seem really complex at first, they certainly don’t have to be.
00:35 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. This is Season 13, Episode 4, and today my guest is Keiland Cooper, a fourth-year PhD student in neuroscience at the University of California, Irvine. Thanks to his inquisitive nature, Keiland developed a financial philosophy that he has applied to his own financial management practices since his days as an undergraduate. Through focusing on the big picture, he has increased his income as a graduate student and right-sized his housing and transportation costs, which has enabled him to accumulate cash savings and invested assets. Don’t miss Keiland’s insight at the end of the interview into the optimal money mindset for a graduate student.
01:44 Emily: My Office Hours are back for this fall! About once per month, I’m hosting a free Zoom call to which you can bring any financial question or topic that relates to your journey as a PhD or PhD-to-be to discuss with me and the other attendees. These sessions are limited to four people each. Register through PFforPhDs.com/officehours/. I look forward to speaking with you there! You can find the show notes for this episode at PFforPhDs.com/s13e4/. Without further ado, here’s my interview with Keiland Cooper.
Would You Please Introduce Yourself Further?
02:28 Emily: I am delighted to have joining me on the podcast today, Keiland Cooper. He is a fourth-year PhD student in neuroscience at the University of California Irvine, and we are going to talk today about some mindset shifts and some strategies that he’s found really useful for his finances during graduate school. So, Keiland, welcome to the podcast. Would you please introduce yourself a little bit further for the audience?
02:48 Keiland: Hi. Yes. It’s really great to be on, and I really admire a lot of your work that you’ve done. I found it really helpful. And part of the reason why I wanted to be on is I think it’s really important and really useful to share, you know, each person’s experience, because we can all learn from it. And I’ve certainly learned a lot from everyone else’s. So, I thought it’d be useful to contribute.
03:11 Emily: Well, yeah, thank you so much for volunteering!
03:13 Keiland: So, I’m Keiland Cooper, as you said. I’m a fourth-year graduate student at University of California Irvine. My PhD’s going to be in neuroscience, and so I study how the brain learns and remembers at the neural circuit and ensemble level. I’m also interested in artificial intelligence and the co-founder of a nonprofit called ContinualAI which is the largest international nonprofit for our branch of neuroscience.
Financial Mindset at the Start of Grad School
03:40 Emily: Oh, wow, okay. Didn’t even know that. Great. Let’s talk about your financial picture when you started graduate school. Like where were you, maybe both literally with your numbers and then also with your like mindset?
03:54 Keiland: Yeah, yeah. So, I knew going into a PhD that, in many ways, it was going to be a big opportunity cost. A lot of friends that I were graduating with from undergrad were, you know, starting with six-figure salaries in a lot of cases. And so, I knew kind of from the get-go that it was going to be a big adjustment from that. But I think telling myself that I’m not doing a PhD obviously for the money or even for what the money could be down the road because that is not necessarily the case, but for other reasons that I felt really important about. So, I absolutely love what I do. I love where I’m doing it at, and love who I’m doing it with. And that was really important to me, and I knew I probably wouldn’t be as happy doing other jobs than starting the PhD. So I think, you know, right from the get-go, that was really, really helpful, at least for me to kind of justify, you know, that kind of change in income. And then everything else just kind of falls out from that.
04:56 Emily: I am really glad that you articulated that perspective. I don’t think that most people go into PhDs for the money, even if they do expect like a better-paying career later on, maybe, than what they could get with their bachelor’s degree. It’s definitely a passion-driven decision. But, I think as I talk about in many other places, and we’ll see during this interview, that doesn’t mean your finances are neglected entirely. We’re still going to focus on them a bit and do the best we can with what we have at that point. But it’s so important to have your priorities straight and your reasons for why you’re embarking on this. I love that. And did you go straight from your undergrad into your PhD program?
05:32 Keiland: I did, yeah.
Debt and Savings After Undergrad
05:33 Emily: Did you have any student loan debt, for example, or any savings coming out of undergrad?
05:38 Keiland: I was really lucky that I didn’t have to take student loans by the end of college. And so, that was a function of, you know, some family savings. And also I worked most of, I mean I worked all four years of college. So, I was really lucky to not have that. But I also lived really very frugally in undergrad, as most people do. I think what was really important for me to do that was I wasn’t living frugally without a goal. So, in my head, I knew that once I saved up, say, you know, three to six months of savings that if I had to drop out or if I couldn’t get a job that I would be able to live or pay rent or do something for about three to six months was like my first goal. Then I would start to feel okay, and I would, you know, not regret paying for other things that maybe I didn’t necessarily need or something like that. So, I think that was really important that, you know, living frugally kind of comes naturally to me, but something certainly didn’t and it is kind of a harder choice. And so, having that kind of goal in mind of, you know, one, it’s not forever, right? Because like once I get this and how I get that and could be strategic about that, at least once I kind of have that number in mind, then I’ll be okay.
07:04 Emily: I think there’s a huge difference between setting the goal for yourself, not even really articulating it as a goal of just, I just need to get by.
07:14 Keiland: Yeah.
07:14 Emily: Right? I’m not going to take out student loans. I’m going to work enough so that I don’t take out student loans. I’m just going to get by. And that is one level, and that is an accomplishment, obviously, to not have to take out student loans. But you went further than that and wanted to provide for yourself a safety net. Did you get to that point by the end of undergrad? Did you have that three to six months of savings?
07:33 Keiland: Yeah, yeah, I did luckily. And that was really important I think from moving in, maybe like towards the end of senior year and then going into to grad school to kind of feel a little bit more comfortable with, you know, meeting new people and going out and not having to worry about, you know, I can’t go out with my friends because I don’t really, you know, spend money this week or something like that. But generally, I think once I kind of had that, I started feeling more comfortable. Not only with just spending money in general, but also thinking about, you know, now that I have that safety net, what’s the next one? Well, probably retirement, so I’m going to open a Roth IRA. And once you have, you know, start spending the extra money have filling up that, you know, bucket or cup. Or if I was in industry, it would be a 401(k) and then Roth IRA to max.
08:23 Keiland: And then once you have that, then you can think, okay, well, you know, I have enough money, I’ve maxed out both my, you know, emergency savings, you know, six to 12 months, my Roth IRA, that’s maxed out. What’s next? Well, you know, I have some money left over, cash gets basically no return. The four big buckets are cash, bonds, stocks, and alternatives. So then, you know, you can start feeling a little bit more comfortable saying, I’m going to spend a little bit of money on stocks, not Roth IRA stocks, but just in general, you know, investing just so you can somehow try and beat inflation in these other things. And then starting to spend a little bit more money on that. Or, you know, I like to donate, and so donating money to certain charities. I have a little bit extra money, I don’t have to worry about, you know, if I give money, then I won’t feel as bad.
09:11 Keiland: And so, that’s kind of how I saw it, is that I have these kind of milestones and cups. And once I, you know, get more comfortable and safe, then I can start doing this next thing, and then I’ll have a little bit more cushion for the next thing. Which for me, as a very financially risk-averse person is kind of a good way to manage, I think, that risk. And at least in the back of my mind, yeah, I have that in case something happens.
Financial Knowledge Resources
09:39 Emily: What you just described about these different milestones and goals is very reminiscent of my financial framework that I teach through my seminars, which you probably haven’t actually encountered because it’s not really on my website. I saved that for the seminars, but yeah, very, very similar to that. So, it sounds like you actually have, or maybe even had, at the point of entering graduate school a pretty high degree of financial knowledge. And I’m wondering where you got that from? Because I think you mentioned in our prep materials that you’re like a first-gen college student, for example. So, like did you learn that from your parents? Or did you learn it from other sources?
10:14 Keiland: Yeah, so yeah, I’m a first-gen undergrad student and certainly a first-gen PhD student in my family. So, like I was saying earlier, a lot of the reason I came on is because I really just had to leverage a lot of resources in other people. And so that was just a function of, you know, asking every question that I could. And not just in, you know, in terms of finance, but pretty much for all of navigating college, and especially the PhD because it’s so you know, such an esoteric thing that is really kind of hard to teach unless you’re in it and you really just get that kind of ad hoc advice. And so yeah, with finance, I learned obviously like everyone, some things from my parents. I certainly learned to live more frugally from, you know, my dad for instance, who also didn’t grow up with a lot of things. And so really knows the value of, you know, having that safety net and feeling comfortable and those things.
11:09 Keiland: But other things, I really just had to learn on my own and from talking to friends and, you know, there’s a lot of research online and asking, you know, professionals questions sometimes when it comes to it. Just cold emails of like my parents didn’t know what a Roth IRA was, or they really didn’t invest in the stock market outside of their 401(k) and what the company had given. And so, those things, you know, you just pick up from all sorts of sources, whether it’s excerpts from books or websites or YouTube talks from professionals over time. There’s really not exactly one source. And I think what also makes it difficult that I found is there’s certainly, like with most things, not one strategy either to build wealth. There are a thousand different strategies, and everyone is going to think that they have their right way to do it, but that’s not necessarily the case, right?
12:04 Keiland: So, there’s a whole cohort of people who think you should have no debt ever. You should try and pay everything in cash than have debt, where on the flip side people are like, Well, no, no, no, debt can be really useful. Why would you buy something with, you know, debt that has a really low interest rate when you could get that more return if you invested that money in something else, Right? So, you know, different strategies to accomplish the same goal and not either of them is necessarily correct. It probably just depends on the individual person and their situation and how they want to navigate things.
Financial Strategies During Grad School
12:41 Emily: Yes. Let’s talk more about strategies now. And I want to kind of divide this into two categories. I want to divide it into what strategies are you using during graduate school that you found fruitful for your finances? And then what have you tried and then discarded along the way because it didn’t work out for you? Because you mentioned in our prep that you like to do experiments, which I love that idea as well. So, let’s start with what you have picked up in terms of strategies during graduate school or have continued from your earlier life.
13:11 Keiland: Yeah, I think the big one that has been probably most helpful for me, one is like I said, having that safety net I think is really important. Just because once you have it, you feel really comfortable and you can start doing other things or you can start working in other areas of finance that you might necessarily do. Another is, I like to focus on the big purchases, or at least put way more effort in the big purchases and big expenditures than the little ones. And so, the famous example is everyone yelling at millennials for buying Starbucks coffee. Too much Starbucks coffee each month. And I would much rather be able to not worry about whether or not I’m buying a Starbucks coffee each day than how much money am I paying for rent. Because in the long-term, that rent cost is going to far exceed, I would have to drink a lot of Starbucks coffee to exceed the amount that that rent will cost.
14:18 Emily: I totally agree with this, like getting those, I call them the big rocks. Getting the big rocks in your budget right. But you live in Orange County, California and it’s hugely expensive. So, I want to know specifically what have you done with your rent to try to minimize that cost to the degree that you are comfortable?
Minimizing Rent in California
14:36 Keiland: So, I’m lucky. Obviously, rent is awful in California. That’s just a blanket statement that’s going to be true pretty much wherever you are. But even within that, there’s certainly variability. I’m lucky in the sense that University of California Irvine subsidizes rent, and so you don’t have to live at the university. You could live outside and commute and some people do and it might be a little bit cheaper, but then you have to factor in commuting costs and so on and so forth. But even then, I knew I wanted to live, you know, near campus so I wouldn’t have to drive to campus every day. And even within the housing that UCI offers, there’s variability on the order of, I think on the low end it’s, you know, $500 a month and at the high end it’s like $1,300 a month.
15:28 Keiland: And I chose and requested housing that’s on that lower end. I didn’t get the lowest because, you know, they don’t have very many of those, but, you know, and certainly my apartment isn’t as nice as it could have been, but it’s not that important to me for those years. And so again, the $300 I would save just from that one decision each month adds up to, you know, a few thousand that cushions some of the other things. So, I don’t have to worry as much about, you know, I enjoy eating out. I don’t like to cook as much so I can eat out and not feel as bad about that decision. Or, I can intentionally say, you know, I’m going spend my money on something that I want to do or that actually makes me happy rather than something that, you know, I’m just spending money on kind of mindlessly and doesn’t really bring that big quality of life to me.
16:22 Emily: Yeah, I think, I mean this housing decision is just, it’s so important. You can change it if you’re a renter, you know, it’s difficult but not impossible to change where you live. So, it’s great to get it, you know, as best you can sorted out from the beginning. But it’s again, as you said, for each individual you have to evaluate how much joy am I going to get from living in this type of apartment versus this type of apartment. And to me as well, like I need to, you know, I want to have a place to live, but it doesn’t have to be the most hospitable or the most fancy or whatever, whatever. And so, I think that sometimes people can get tripped up, maybe setting other people’s expectations on themselves about, oh, I have to live in a nice place because that’s what my parents think or whatever. Whereas if they really evaluated it, maybe they could go a little lower on the cost spectrum and still be just as happy. And as you said, then the money is available to divert to something else that does bring them more value and does bring them more joy. Like you said, you don’t want to sweat the small stuff, so you’re going to focus on those big items. Are there any other big items that you want to mention? Aside from rent?
Another Big-Ticket Item: Car
17:26 Keiland: Car is certainly a big one. You know, buying a new car off the lot versus a used car. For some people, I’ve met a lot of people where both of those decisions is a no-brainer. It’s like, obviously I’m going to get a new car, why wouldn’t I? Or obviously I’m going to get a used car, why wouldn’t I? Right? So again, it really goes back to what’s your financial situation and really what’s important to you. Is it really that important to you to have that nice of a car? In some cases it might be, and that might be the thing that you really enjoy and really, you know, why you work and make money and what you live for is that thing. And so that’s fine as long as it’s, you know, in my view, intentional. But other things, like for me, I don’t really need that nice of a car and so I can, you know, cut back and use that money I save for other things that do mean more to me.
18:18 Keiland: And so, that’s kind of the intentional decision. And it doesn’t mean that even for the big purchases you can’t do them, or you have to live cheaply. But I, I think the amount of time you spend needs to be proportional. And there’s a famous law in psychology that kind of proves that, the prospect theory that we will fight tooth and nail to spend a coupon on like a $5 hamburger. But for a thousand-dollar car you won’t fight for that $5 savings, even though at the end of the day it’s still $5 in your pocket. So, to to kind of be mindful of these kind of like cognitive biases and really put the effort into the big things. Because you can still have probably the same car for a better price if you just put in a little bit more work to find it and look for it and save.
19:06 Emily: Absolutely. And sort of like what you were saying earlier, if you put in the time and you put in the work to finding that, you know, great housing situations, a great deal, or the car or whatever these other bigger items, as you said it should be proportional to the amount of money that you’re spending on those. Then, again, you don’t have to spend much time fretting about those smaller purchases. So you specifically, do you own a car?
19:27 Keiland: Yeah.
19:27 Emily: Is it paid off? Like what do you want to tell us about your car?
19:29 Keiland: Yeah, I’ve been driving the same car since high school <laugh>, so and I was actually thinking about saving it because it’s awful on gas and the environment, but then the economy and the used car market was terrible. And I honestly don’t drive, like I said, I live very close to campus, so I really don’t drive that much at all. So, you know, personally, I didn’t feel as bad of, you know, just keeping it for a few extra years and then after, you know, the PhD, maybe I’ll look for another one or if I see a really good deal then maybe I’ll consider.
20:03 Emily: Yeah, my family has one car for four of us but we really don’t drive very much, as you just said. Like, we work, my husband and I work from home. I walk my daughter to school, my other daughter we need to drive, but it’s like a two-mile distance. And so, yeah, I don’t know, it just doesn’t add up to much. And we’ve sort of, for the last couple of years since, you know, kind of before the pandemic been thinking, oh, I, you know, at some point we need to upgrade this car, like get more of a family one or whatever. But you know, just not driving that much, I don’t see the way to justify like the expense until it’s absolutely necessary. And that’s kind of our like, attitude about it. And again, if we were spending a ton of time in the car, then it would be a higher value, but it’s really just to get from here to my daughter’s preschool and back. That’s pretty much all it’s being used for.
20:49 Keiland: Yeah, that’s how I see it too. Like if I was commuting an hour a day and I just, every single day for an entire hour I was sitting in my car and I just said, I hate this car, I hate this car, I hate this car. Right? That would be worth it to me to spend a little bit extra money on, you know, something a little bit nicer. Just because I knew, you know, I would much rather have an hour a day where I just don’t hate myself in the car than, you know, this fine car or I’m thinking about something else other than, you know, is my check engine light going to combust at any moment? So yeah, I think it’s those kinds of decisions that are really helpful.
21:30 Emily: Emily here for a brief interlude. If you are a fan of this podcast, I invite you to check out the Personal Finance for PhDs Community at PFforPhDs.community. The community is for PhDs and people pursuing PhDs who want to take charge of their personal finances by opening and funding an IRA, starting to budget, aggressively paying off debt, financially navigating a life or career transition, maximizing the income from a side hustle, preparing an accurate tax return, and much more. Inside the community, you’ll have access to a library of financial education products, including my recent set of Wealthy PhD Workshops. There is also a discussion forum, monthly live calls with me, and progress journaling for financial goals. Basically, the Community exists to help you reach your financial goals, whatever they are. Go to pfforphds.community to find out more. I can’t wait to help propel you to financial success! Now back to the interview.
Increasing Income by Applying for Funding
22:36 Emily: How about some other strategies you’ve used during graduate school? I understand you have increased your income.
22:42 Keiland: Yeah, yeah. In grad school, it’s kind of hard because as you all know well, you can have side hustles, but PhDs are huge time commitments and really demand a lot of your focus and there are also kind of sometimes regulations in your program that prohibit it and so on and so forth. But there are things unique to a PhD that I think have been really useful. So scholarships and grants and those types of ways to increase your income are pretty unique to a PhD and there’s a lot out there. And I know everyone says this and even I really wish I probably one of my biggest regrets in undergrad was not applying to more, because the more I learned it really is just free money. And especially seeing it from the other side, from like sitting on committees that give out grants, they really just want to give money to people.
23:35 Keiland: And so, really just applying to as many as you can and especially the big ones will probably be worth the time. And so for instance, I did the GRFP, which was a huge comfort. Not only just from a little bit of extra income each month, which really wasn’t much compared to my stipend. But also just minimizing risk of, you know, if for instance, my advisor doesn’t have money, I know that I’m funded. Which I think of as probably just as important as increasing your income is just knowing that your income is stable, right? Because that helps you plan, that helps you, you know, make other investment decisions, that makes you, you know, feel a little bit more comfortable when you do other things rather than needing to save. And also, you know, smaller ad hoc grants that you apply for, or travel awards, or these things. Even the small ones, you know, if it’s quick and doesn’t take too much time, if you go back and add them up, they really add up to quite a bit of money. So looking for all those kind of opportunities and not being afraid to like ask for them or ask for help or these things when you need it, I found really, really useful.
24:57 Emily: I like the way that you phrased that. Being able to apply for scholarships and grants and fellowships is a unique thing to the academic experience. Because at face value, if I said something like, how do you increase your income as a graduate student? A lot of people would just dismiss it out of hand. There’s no way. They tell me what my stipend is, that’s it. But they’re just automatically discounting this whole category of an academia-approved way to increase your income, which is just to apply for awards of various types. And you’ll be lauded for doing so if you actually, you know, end up winning them. And so it’s like, yeah, even for people who are prevented by their visa or by policy from working outside of, you know, the PhD program, this is a completely straightforward and great way to at least attempt to increase your income.
25:42 Keiland: You asked earlier about things I’ve tried that work and don’t work. For me personally, I don’t really budget each month. Mostly because I’ve tried things that, you know, I tried to sit down and budget. But I think once you, or at least for me, once I got to the point where I kind of had a feeling of what the things were that I was buying and what the big purchases were, like I said, I didn’t really feel like I needed to budget as much each month. And so usually I’ll sit down maybe once a quarter or even once a year and really kind of get a handle on, you know, like I said, what are the big things I’m buying? What are the little things that are adding up? What are the like subscriptions that I don’t need? And those things to try and like reset myself for the next quarter or next year. But I really don’t sit down month to month anymore and really kind of get on myself.
Experimental Expenditure “Fasting”
26:40 Emily: I think there’s a lot of value in the exercise of budgeting and tracking and so forth, but only to the extent that it helps you actually make decisions or change your behavior. Because if all you’re doing is kind of a, okay, I’m doing a budget exercise, but it makes absolutely no difference to my behavior or how I feel or anything, then it’s pointless. But I like what you’re saying is okay, yeah, you’re not budgeting on like a weekly, monthly basis, but you are using the data that you’ve collected to make decisions going forward. And so, that’s really what you need to get out of budgeting anyway, is the ability to make those decisions. So that sounds perfect. Yeah, any other strategies that you’ve like tried out and decided that they weren’t the best for you?
27:23 Keiland: Yeah, there’s one thing I kind of did in undergrad just as a proof of, so like for instance, I would, you know, live without AC for a few months just to, you know, see what it was like or not AC, heat. I would turn the heat off in the winter for a few nights just to prove to myself that like, you know, before then I was like, I must have heat. I can’t live in a cold environment. And then you see all these things where like, you know, what if I couldn’t afford it? What if I couldn’t use it? What if I couldn’t do it? For no other reason just to one, to prove to myself that if I didn’t have it, I would probably be okay. To a certain extent. It’s nothing extreme or crazy. Or if I, so for instance, I felt like I was buying a bit too much like tea or coffee at the store and just be like, you know what, for this month I’m not going to drink it, and how badly will it really affect my life?
28:24 Keiland: Will I really be that upset if I don’t? That was kind of like the earlier advice that you had heard and it’s like, oh yeah, you need to cut back on everything. And I think it’s useful as an exercise just to get that point too just so you feel comfortable as like, you know what, it’s nice to have and I would love to have it, but it’s not a necessity, to really kind of understand what the necessities are. Because I think, at least for me, there were a lot of things that at one point that I thought were necessities and I thought that I had to have them and I had to spend money on them and I had to do them. And it wasn’t until I forced myself to kind of cut them out for a short period of time and kind of reflect back and see, was it really that bad? And then you realize, no, it really wasn’t that bad. It’s really not as important to me as I thought it was going to be.
29:13 Emily: I really like this point about these experiments to really determine for yourself like what is the line between a necessity and a discretionary expense? Not that it’s bad to spend on discretionary expenses, but just as you said, like, what can I survive without? What can I live without? And what is it really adding to my life to have that expense in my life? So then you can more accurately judge like how much you should be spending on it. I call these little experiments, the way that you’re describing them, fasts.
29:42 Keiland: Yeah.
Quiz Yourself on How Much You Think You’re Spending
29:42 Emily: So like, I know I’m going to go without this thing that I’m accustomed to for this defined period of time and we’re just going to see how it goes. And I fully expect to return to, you know, having it in my life after that point, but we’re just going to see, you know, how I feel about it, and maybe I’ll end up making a different decision later on with that new information. So, it’s not something to be doing all the time on everything, but from time to time yeah, to conduct those kinds of experiments, I think that’s valuable. Anything else you’d like to add about like, tactics that you’ve used during grad school?
30:12 Keiland: Yeah, one thing when I first learned about prospect theory, and that we focus more on the little things than the big things, even though they’re not proportional. I kind of got a little deep into it, and one thing I thought actually ended up being kind of useful was when I was sitting down and trying to budget my finances and what I was spending money on, to kind of take a minute before then and kind of ask myself how much I thought I was spending on these things beforehand. Almost like a quiz or a game, and then you’ll have your answer in black and white once you actually sit down and calculate it.
30:49 Keiland: But for me, I think it was really useful to try and begin to gauge how well do I know my own habits? And how much, you know, if you just like, it’s really hard. I think if you sit down and ask yourself, how much do I spend a year on x? How much do I spend a year on groceries? How much do I spend a year on blank? Even if you budget once a month, it still might not be that automatic before you budget to try and have that kind of handle on it. So really quizzing yourself before, so you know what you need to learn rather than just waiting for that aha moment of, oh wow, I’m spending too much on this. But to really kind of handle that psychology that’s underlying those decisions.
Money Mindset Shifts During Grad School
31:39 Emily: Let’s go a little bit further in this vein and talk about mindset shifts you’ve had. Now, the mindset that you described coming into graduate school, you were very inquisitive, including about finances, learning a lot from a lot of different sources, that’s super valuable. But have you seen any shifts in your mindset during grad school with respect to your finances?
32:00 Keiland: Yeah, I think the big one for me was not being as risk-adverse. So like I said, there are kind of two camps of you should have zero debt at all times, pay everything in cash, have little to no credit, et cetera. And the other camp is, you know, debt can be useful, just be careful or be very strategic about how you use it and you can actually earn more over the long-term. The thing is being like, if you do a big purchase of say like land or a house, it’s probably better to get a mortgage than pay straight up in cash because if you put that cash in, say like stocks for the same amount of time, you’ll make more money over the long-term. Pretty basic, but still there are kind of those two divides. And I really found myself on the other end of that spectrum for a long time of like, I’m going to pay everything in cash.
32:51 Keiland: I really didn’t want a credit card for a long time until I realized very soon that you have to build credit in today’s world. So, in undergrad I ended up finally getting a credit card and using, you know, 10% of the limit per month and so on. But that was, I think a shift is, you know, debt and credit and risk can be useful. You just have to be careful and you really have to, you know, plan and learn and know how you’re using it when you do use it. And if you do then, you know, in the long-term you can probably come out ahead of the super risk-adverse camp. So, that was one and that also helped with like other investments with like Roth RA and stocks and so on. To know that like, you know, like I said, I have a safety net.
33:41 Keiland: I’ve worked hard for this, I lived very below my means for this, but now that I have it, now I can try and, you know, learn what the stock market is, learn, you know, what it feels like to lose money for an extended period of time and have, you know, to discipline not to sell and so on. And to see and just kind of handle that volatility for me was a good exercise one, because I knew at some point most of my assets are gonna be in a 401(k) or retirement account at some point. And so, when I inevitably talk to an advisor, I would love to at least know a little bit about what I’m talking about so I can have those conversations with them. I thought was a tremendously useful exercise and then I like it, so, you know, invest some extra money that way.
34:28 Keiland: But yeah, that was a big shift I think. And also like I said, in undergrad, I was very, very frugal. I’m a lot less frugal. And that was actually hard for me. I know, like it was hard to kind of like let myself spend money. And it wasn’t until I really sat down and said, you know, these are my twenties, despite the fact that, you know, two of them are in COVID. Like, yeah, you have to live below your means and you have to live frugally and you have to save, but at the same time, you don’t want to save a bunch of money when you’re 60 and then look back and be like, what did I spend it on? So like I said, really kind of giving myself the permission to spend on the things that I really think make me happy or really increase my quality of life and those sorts of things. I at least found really useful to kind of justify like, yeah, I can go on vacation or I can spend for this because it’ll be really worth it and it’s not a mindless decision. I’m not just giving money because I want it in that moment. I really, you know, think this thing will be good and it’s worth the amount of money I’ll spend now on it.
Act Your Wage
35:42 Emily: I’m giving a webinar later this afternoon on the day that we’re recording, and one of the slides that I’m going to present exhorts the listener to act your wage. And that partially means being frugal in graduate school. You know, you’re not going to be living on a lot of money, but for you, because you had lived on even less as an undergraduate and you know, you had these really highly ingrained, frugal tendencies, for you and for other people like you, acting your wage also means doing things that you’ve never done before with your finances, like starting to invest, like acquiring credit. And it’s appropriate, right? As long as it’s all in balance with where your salary is at that time and the cost of living and everything. Like, so act your wage can mean a lot of different things to different people depending on where you’re coming from and where you are now.
36:31 Emily: And so, I like that you’ve grown, right? Over these last few years in that sense and your finances because your salary allows you to do those things to spend on vacations from time to time. To start to invest as long as you are careful about your rent and all the other things that we’ve talked about, it’s all in balance for you. And that’s a great place to be during graduate school. A lot of people don’t get there, but I’m really pleased that that you are yeah. Is there anything else that you wanna add like maybe mindset shifts that you would recommend to other graduate students?
37:01 Keiland: Yeah, I think the most important thing is just to think about your money, which, you know, a lot of people might not necessarily do, but you know, if you don’t do it at all, it’s worth, like you said, budgeting and going through and seeing where you spend your money and kind of getting a sense for yourself and learning about yourself. And I know we’re all PhD students, think of it as like a research project, right? There have been times where I’ve sat down and like analyzed my financial data in Python, right? It’s, you know, it’s kind of fun to, to sit down and play with the spreadsheets and add things up. Most of us are nerds here and finance can be a very nerdy topic. So it doesn’t all have to be scary and certainly, all of us are getting PhDs, so we all have the aptitude in one way or another to learn about these topics.
37:47 Keiland: Even though some of them might seem really complex at first, certainly don’t have to be, especially when there are experts like you sitting really close to us that, you know, are an email away or workshop away. So yeah, really, really know yourself, and learn how you spend your money and get a really a good sense for yourself and then ask yourself what your goals are and then if they don’t align, readjust, and if they do align, then don’t adjust. But I think having the comfort and knowledge of knowing your own behavior is probably the most important thing to just know how you spend money and whether or not it will get you where you want to be in the long-term or not.
38:31 Emily: I can definitely understand if some people do not want to go through that exercise, like they expect it to be like unpleasant or something. Like, yeah, it’s not the greatest thing to look at like a small salary as a PhD student and figure out, you know, how you’re managing it and everything, but it, it’s not gonna get better by ignoring it, right? So, really the only way out is like, is through <laugh> through the process of the introspection that you were just talking about so that you can make some better decisions on the other side that’ll help you feel better about your whole life and about your finances too. So, thank you so much for that.
39:04 Emily: Is there anything that you want to tell us about your finances now? I mean, I think we’ve gotten, you know, some pieces of the picture. You have some savings in place, you’ve started investing in a Roth IRA. Yeah, would you like to say anything more about sort of where these mindsets and strategies have taken you over the last three years?
39:18 Keiland: I’m lucky to have saved enough for six to 12 months of a safety net, which to me, I kind of think is my foundation. And then another, I try and max out my Roth IRA as much as I can each year. And once I’ve done that, I try and donate some percentage and I also try and invest so hopefully I can hopefully donate more. I’m really interested in kind of this mindset called effective altruism, which a lot of people have talked about. And it’s in a great community and so it’s just, you know, investing in spending your money in such a way that you can quantitatively maximize the impact. And so I do, philosophically, I really like those ideas and the discussions there.
40:04 Emily: There was actually a Stuff You Should Know Episode on Effective Altruism. Just we’re recording this in June, 2022, so it was a few weeks or a couple of months ago. But anyway, I hadn’t heard of the concept before that, but following that episode I ordered a book from some effective altruism organization that sends out free books about it, <laugh>. So, it’s on my reading list, although I haven’t gotten to it yet. So, thanks so much for bringing up that concept. Is there anything else that you want to add?
40:30 Keiland: Yeah, no, yeah, I really like those topics. Particularly because I think, in a lot of ways, that scientists really just want to do the amount of good and don’t really think about money as much. But effective altruism, at least for me, made me think of money in such a way that, you know, it’s the energy to do good. Money doesn’t necessarily have to be evil, right? It’s like how much money is being spent in the NSF or NIH budgets each year. It’s like millions and millions and millions of dollars. So, to think of money as, you know, earning money need not be kind of like a greedy evil thing, as long as you are ethical about it and you’re conscious about it. Because ultimately you can use it to do other good things. So, that was a good way to kind of changed my mindset of how I was thinking about, you know, earning wealth, and so on.
Best Financial Advice for Another Early-Career PhD
41:23 Emily: I love that we got there. I love that we got to that motivation by the end of this interview. Let’s conclude with the question that I ask all my interviewees, which is, what is your best financial advice for another early-career PhD? And it could be something that we touched on during the episode or it could be something completely new.
41:40 Keiland: I think we tend to to be stuck in our fields and think like, Oh, I’m really good at this, but not this. But the PhD is really just a signature of you’re a really smart person and probably any problem that you’re handed, given enough time, you’ll figure it out. And your finances could just be another problem that’s on your PhD. And no matter how daunting it might seem, I’m sure the beginning of your PhD probably seemed more daunting than that. So, finances need not to be that thing. No matter how weird our taxes are in quarterly payments and you know, do we pay on stipends or not and have to get like a mini degree in accounting to do a, you know, 20-something-year-old’s taxes, it’s fine. At the end of the day, you’ll learn about it and that’ll be useful in the long-term and could even be interesting depending on who you are. So, don’t let it be daunting, and don’t be afraid to ask for help along the way to answer those questions.
42:41 Emily: I don’t think I’ve thought about it or heard it phrased that way before, but I really like your articulation there of like think of your finances as another thing that you can be a student of, and another thing you can learn about during this period of time. And you don’t have to have it right from the beginning. You don’t have to master it from the beginning. It’s a process. And I also like that there’s relatively lower stakes with your finances when you’re earning that lower salary. And that can be kind of the training ground and the proving ground so that when you get to that higher post-PhD salary, then you know the things about, well, does budgeting work for you or not? Maybe you have a different system that’s better for you. And like, yeah, I’m now versed in how to invest in a Roth IRA, so it’s really not going to be too challenging to select the investments inside my 401(k), et cetera, et cetera. So, I love that framing of it. Well, Keiland, this was such a pleasure to talk with you and thank you so much for volunteering to be on the podcast!
43:30 Keiland: Yeah, yeah, thank you. And thanks for all the work you’re doing for PhD students like us trying to navigate it all.
43:36 Emily: You are very welcome. It’s my pleasure.
43:43 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.
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