Author Topic: Maximize PhD Stipend Savings  (Read 1187 times)

OneFrugalScholar

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Maximize PhD Stipend Savings
« on: August 24, 2013, 08:28:12 AM »
Greetings everyone,

I'm a newcomer to MMM but have been a long time practitioner of frugality and have over the past few years focused on investing my savings. I am also a doctoral student living off of a stipend. I've seen a few odd posts here on the forum from folks mentioning their pursuit of a PhD and a frugal lifestyle, so I wanted to try and gather us together here on this thread to share our stories and share ideas.

I myself am a twentysomething social sciences PhD and have a stipend of $23,000 per year. I'm seeking to save $10,000-$13,000 of that per year and to do a max contribution to my Roth IRA. The rest I am putting into various index funds.

I am always tinkering with ways to save money, but mostly I stick to the basics of riding my bike to school, avoiding eating out, home brewing, and generally slaying my utilities bills. I am also seeking to start up some side hustles for a bit of extra income through using my carpentry skills as a weekend gig. This allows me to take a nice break from the taxing academic work too.

I'd like to call on all the fellow PhD students popping around this blog and forum to join me in my quest to save. My goal for this year is $12,500 from $23,000 in a relatively low cost of life city. What are you shooting for?

supermatthew

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Re: Maximize PhD Stipend Savings
« Reply #1 on: August 24, 2013, 11:07:52 AM »
(btw you posted nearly the same topic on another subforum. I don't think you should do that, for everyone's ease of use.)

I'm just starting grad school this year on ~22k/year. My budget (loosely adapted from my spreadsheet) is the following:

yearly/one-time:
5000: debt to family members (0% but I must not delay paying it back)
5000: roth IRA
2200: tithe
200: furnishings for (unfurnished) partment
50: dental plan
10: vision plan

monthly:
400 for my part in a shared 2-bedroom with another grad student
15 shared internet
12 cell phone (Ting ftw!)
20 utilities (only electric)
7 renter's insurance
60 groceries
5 laundry (washing machine, but drying for free on a rack)
10 clothes (from goodwill mostly, and mostly for fun)
10 other "fun" things (e.g., eating out, entertainment events on campus)

I would like to max out the IRA and save some more in a taxable account (for the 0% LTCG) but sadly that will have to wait till years 2-5 because of my debts. The grocery bill may be a bit optimistic, but I have been getting a lot of bulk whole grains/dry beans/canned vegetables, and keeping the majority of my grocery purchases to less than $2 a pound (chicken drumsticks or thighs and sausages on manager's special usually meet this criterion). In addition I cook with my rice cooker and a crock pot mostly. I have a separate spreadsheet for grocery costs that will show me a running average, and I'll periodically adjust my purchasing to move closer to the target.

I am also biking/running/walking to school everyday rather than using the bus (which costs 1.50 each way). It's about a 30 minute walk or a 10 minute run.

Anyway, much of this is just a plan since I have been here a grand total of 1 week.

OneFrugalScholar

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Re: Maximize PhD Stipend Savings
« Reply #2 on: August 25, 2013, 01:46:02 PM »
Looks like a solid plan. Way to get the debt paid off and move on there. I admire your grocery budget as well. I am currently pegged at $25 / week for a monthly total of $100, but I am thinking this needs to be a bit lower. I also want to give a nod to you for including a tithe in your yearly budget. That is something I don't see too often on finance blogs.

A heads up on the Roth IRA: speaking with my director of graduate studies a few weeks ago, I learned you need to to ensure your stipend is considered earned income. If you will receive a W-2 form come 2014 or have Social Security tax taken out, you are golden. Hopefully you are all set on this and can make that max contribution.

Best to you as you start your degree and live the frugal life.

galliver

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Re: Maximize PhD Stipend Savings
« Reply #3 on: August 25, 2013, 10:35:18 PM »
Wow! Mega-props to both of you. :)

I'm not as hardcore, but also a PhD student (4th year in engineering at a university in a cornfield). I'm too shy to share the particulars (for now), but I'm willing to share my top "assets" and my top goals.

Assets/pros/good stuff:
#1: never carried CC debt* (*that I couldn't pay off. I carried a few hundred last winter when my conference reimbursement got delayed and I was only willing to take so much out of savings for that.  The $5 in interest was worth the psychological benefit. Antimustachian? Maybe. But it was a one-time, calculated loss.)
#2: Never had a car. I have Zipcar for the very occasional (<1x/mo) driving I do. Used the bus system (free for students) for 3 years, finally gave up fixing a bike and bought one this June, been biking since for the health benefit. :)
#3: "Student loans" are through family, so near 0% interest. On the other hand, they aren't holding me as strictly accountable as a real lender would (it's easy to get lazy when your lender is ok with payments at-will). Not complaining, though, it's a good arrangement.

Goals:
#1: control ridiculous food spending. It's currently my biggest identified money-sink. Groceries is $300 (I expect this includes some personal care, cleaning, etc products, but it's still high!) and eating out (I'm ashamed to say) is $200. Bet I can go down to $200/$100 easy (i.e. feeling accomplished rather than deprived).
#2: Start air-drying clothes and change my lightbulbs to CFL's. Then show roommate the results and convince her to do the same with remaining bulbs.
#3: Identify other money-sinks. :/
...all of which will allow me to #4: Start paying back those "student loans" again...>_>

Questions:
#1: How much rice/pasta and beans vs veggies and meat does that $60/mo or $100/mo food budget include? [I have hated beans my whole life but might accept them in unrecognizable form now, e.g. chili; I'm trying to limit starches, so pasta or rice as a staple is out.]
#2: What resources would you recommend for learning how/where to invest as a grad student (besides this site)? e.g. I don't even know who to approach on campus/in payroll about doing IRA contributions...

cats

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Re: Maximize PhD Stipend Savings
« Reply #4 on: August 25, 2013, 10:58:42 PM »

Questions:
#1: How much rice/pasta and beans vs veggies and meat does that $60/mo or $100/mo food budget include? [I have hated beans my whole life but might accept them in unrecognizable form now, e.g. chili; I'm trying to limit starches, so pasta or rice as a staple is out.]

You probably will have to start eating a lot more beans, sorry :)  In grad school, I usually spent $150-200/month, which did include some more personal care or household stuff.  However, I did not eat a whole lot of rice/bread/pasta.  If you want to do a full-on paleo diet, you probably won't be able to, but it is possible to eat a healthy lowish-carb vegetarian/mostly vegetarian diet on a budget.  I ate a lot of beans, eggs, and whatever vegetables were cheapest when I went grocery shopping.  And you really, really have to cut down on the eating out!

#2: What resources would you recommend for learning how/where to invest as a grad student (besides this site)? e.g. I don't even know who to approach on campus/in payroll about doing IRA contributions...

Usually you would do an IRA contribution on your own, the university wouldn't do withholding or deposits for you.  As for checking on whether or not it's earned income: do you get a W-2?  If so, you're probably good to go. 

galliver

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Re: Maximize PhD Stipend Savings
« Reply #5 on: August 26, 2013, 12:26:40 AM »
You probably will have to start eating a lot more beans, sorry :)  In grad school, I usually spent $150-200/month, which did include some more personal care or household stuff.  However, I did not eat a whole lot of rice/bread/pasta.  If you want to do a full-on paleo diet, you probably won't be able to, but it is possible to eat a healthy lowish-carb vegetarian/mostly vegetarian diet on a budget.  I ate a lot of beans, eggs, and whatever vegetables were cheapest when I went grocery shopping. 

Beans are not an option (unless I am *this far* from being on the street/starving, then of course anything goes :) ). I think everyone has a right to an unfavorite food(s). My diet doesn't have a label; neither paleo nor vegetarian. (I can't go vegetarian; meat-deprivation makes me angry and vicious. ;)) I just try to eat Real Food, and stay away from starches. I think careful monitoring and planning can get me to $200 without resorting to extreme measures.

And you really, really have to cut down on the eating out!

That's what I said! ;) What's terrifying is that I hear some graduate students never cook at home. I consider $100 of that my 'social' eating out budget, like having lunch with some grad student friends once a week (keeps me sane), or going out for a birthday/other celebration, or visit friends & bf in a city 3 hrs away where I have a lot less control over food availability. I'm estimating the other $100 is convenience food (I don't have time to make lunch; I don't like my options for breakfast, etc), and that's what I want to cut out.

Even with a $300 food budget, rent+utilities+food won't come to half of my after-tax stipend...I think I'd be doing ok. If I found the other leaks....

BZB

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Re: Maximize PhD Stipend Savings
« Reply #6 on: August 26, 2013, 09:25:02 AM »
Are you in the US? Here are some ideas. Take full advantage of any medical or employee-type benefits you could be eligible for as a grad student, if your university provides it. In my grad school we got a stipend and also the same benefits that employees got, so that included medical insurance paid by the employer, plus access to dental and vision insurance with low premiums if you wanted it. Also many free services were available at the Student Health Clinic, such as no-copay vaccines and preventive medicine (physical exam, well-woman exam). Prescription meds copays were cheaper through student health. Also there was a Flex Spending plan you could use to take money for medical or childcare expenses out of your paycheck pre-tax. Students had access to the Employee Assistance Program which provided free advice on legal and personal matters, counseling services, and help finding childcare or eldercare.
Don't forget to use your student ID card for cheaper admissions into museums or other discounts you can get as a student.
Student lounge for free coffee while at school. Free pizza lunch at Friday seminars. Mooching lunch off the leftovers from department meetings - the secretary would send us an email to come get the food. Student housing is cheap if you can get it. I knew one postdoc who slept in his lab, so he did not have to pay rent. He used the rec center showers to clean up. One of my classmates slept in his brother's garage instead of paying rent. But he spent all his extra money on beer. Aaah - grad school.

OneFrugalScholar

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Re: Maximize PhD Stipend Savings
« Reply #7 on: August 26, 2013, 03:26:12 PM »
Questions:
#1: How much rice/pasta and beans vs veggies and meat does that $60/mo or $100/mo food budget include? [I have hated beans my whole life but might accept them in unrecognizable form now, e.g. chili; I'm trying to limit starches, so pasta or rice as a staple is out.]
#2: What resources would you recommend for learning how/where to invest as a grad student (besides this site)? e.g. I don't even know who to approach on campus/in payroll about doing IRA contributions...

My grocery bill right now consists mostly of the following staples: fresh veggies and fruits, beans, and rice / pastas. I will rotate fruits and veggies based on whatever sales are happening that week. I'm a vegetarian so I save a lot on not buying meat. Sadly no farmer's market, as the expense would be just too high right now. I hope to contribute to that in the future once I'm a bit more financially established. I also bake bread at home to cut on costs there. The bread is much tastier and it is a fun thing to do on the weekend.

Like "cats" said, if you get a W-2 form from your university and there is a value in Box 1, you have earned income. It can be a daunting task navigating university bureaucracy to find out the exact details. I would recommend starting with your university's payroll department. That's where I found information. Also, Google is always a tremendous resource.