Author Topic: Starting PhD in a new city -- how to do things right?  (Read 9185 times)

daymare

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Starting PhD in a new city -- how to do things right?
« on: April 17, 2013, 12:12:42 PM »
All, looking for some advice as I move to a new city this summer to start my PhD.  I want to be smart from the start (with my spending).

For some background: I previously worked for ~1.75 years making a great salary (85K), but with many luxuries: studio apt. in an expensive city, a lot of eating out, and international travel.  I currently have no debt, and ~42K in retirement accounts (most in Roth IRA or Roth 401K, will convert the Trad. 401K to my Roth IRA next year).  Basically, I didn't do an awful job saving money, but not a great one either (bought lots of unnecessary crap that I could have done without).  I made enough money that I didn't have to be too careful.

This summer, I am moving to a new city and starting a 5-year PhD program, with a stipend of ~31K.  Assuming a 14% tax rate (pretty conservative, as my effective tax rate was between 17 and 18 percent this past year, and given 10% MTR on the first ~8K, and 15% MTR up to ~36K), I should be making about $2,230/month.  I am committed to maxing out my Roth IRA every year, but I'm convinced I can do even better!

My biggest expenses/problems in the past have been housing, going out, and buying crap.  I made a goal to spend max $500 on clothes the whole year (I'm at $30 now, but I have to buy a dress for some weddings this summer), and have generally been trying to donate clothes, get rid of stuff, and pare down.  Buying more stuff is not in the plan!  As for going out -- getting drinks or dinner is a pretty popular way to socialize among my peers, but I can cut out the buying of mediocre lunch/dinner because it's convenient and cooking instead.  (Just discovered the joys of a crockpot -- for a soup-addict like me, this will be major savings relative to ordering soups at restaurants)  Housing is my weakness -- I will be in the city for a year before my SO moves here, and I am pretty set on getting a studio.  I'm sure I'll be studying & stressed out most of the time, so the possible stress of roommates is one I'd like to avoid.  I've lived by myself for the last 2 years, and relish the freedom.

My ongoing expenses are pretty minimal:
$30/month for cell phone (no-contract MVNO for my iphone, could go lower if necessary)
$8/month for Netflix (DVDs in mail -- usually watch a few movies every month)
$7/month for Amazon Prime (streaming, free shipping)
Other than that, travel to see SO and family, probably a tropical vacation between semesters during winter break.

I'll be looking for a studio within walking/biking distance of campus, trying to cook at home and limit going out spending.  Again, housing will be my biggest expense by far -- I was thinking of setting a 1K/month cap for housing + utilities.  Do I deserve a face-punch? Please give me one!  Any suggestions for how to spend less on housing, words of encouragement of how awesome it will feel to invest more money instead of spending it on rent?  I've been looking at apartment aggregation websites & Craigslist so far -- where have you found great housing deals?

Any advice for me on what spending to avoid and how?  I recognize that I have an opportunity to save a bunch of money, given no debts, dependents, and nobody impeding my progress.  Any advice you would give someone like me who is essentially starting over with a new lifestyle?  For those of you who went to grad school, any suggestions (or lessons learned) for how to be financially savvy while keeping my sanity?

ghatko

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Re: Starting PhD in a new city -- how to do things right?
« Reply #1 on: April 17, 2013, 12:37:51 PM »
Other than that, travel to see SO and family, probably a tropical vacation between semesters during winter break.

I don't usually have much to add to these threads, but this really stood out for me. On your new significantly reduced income you are planning on a tropical vacation? And during winter break when I bet prices are sky high? There are so many better & cheaper options out there than that. I think that is my first ever face-punch!

daymare

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Re: Starting PhD in a new city -- how to do things right?
« Reply #2 on: April 17, 2013, 12:47:50 PM »
Hmm, thanks for the response.  I think if I have no debt, and max out my Roth IRA, going on a vacation doesn't really warrant a face punch -- maybe an evaluation of priorities.  TBQH, I don't think a trip somewhere tropical (not during peak Christmas to New Years, maybe in January when most people are back to working) would necessarily be expensive.  There are a lot of great package deals with airfare/resort together pretty cheap.  But I will definitely ponder what you said.

twinge

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Re: Starting PhD in a new city -- how to do things right?
« Reply #3 on: April 17, 2013, 01:41:16 PM »
yeah, I've got to say that I had a similar reaction to tropical vacation.  PhDs are a luxury good--they rarely add significant income (esp. if you were making 85K without one) and they involve 5+ years of your life that you could be adding to your investments etc.  and instead you are more just treading water.  I think they can be a transformative experience and by becoming highly educated you can add to society's knowledge etc. so I think they are valuable (not giving mine back anytime soon) but not by personal finance terms.  When I did my PhD I felt like doing it was my one luxury allotment--everything else got put aside.  That attitude also makes you finish up more quickly.

StarswirlTheMustached

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Re: Starting PhD in a new city -- how to do things right?
« Reply #4 on: April 17, 2013, 03:10:27 PM »
A 1k rent/utilities cap sounds good, but depends on where this "New City" is; I have never not been surprised at the differing costs of living when I've moved. Even if you insist on living alone, you might very well be able to lowball this one by quite a bit-- or it might just get you a closet-sized room somewhere. Since you say you're starting this summer, that's already in your favor--less competition for deals compared to the student rush in September. Just keep looking as you're doing, and perhaps see if you can get the local paper's classifieds online. The university's off-campus housing office might be another source for your search, too.

Hmm, thanks for the response.  I think if I have no debt, and max out my Roth IRA, going on a vacation doesn't really warrant a face punch -- maybe an evaluation of priorities.  TBQH, I don't think a trip somewhere tropical (not during peak Christmas to New Years, maybe in January when most people are back to working) would necessarily be expensive.  There are a lot of great package deals with airfare/resort together pretty cheap.  But I will definitely ponder what you said.
This depends on your definition of expensive. But you've got what I'd consider a gold-plated stipend, so go nuts, I guess.

As for keeping your sanity... just forget it. It doesn't matter how much you spend; you won't. This is not a lifestyle conductive to good mental health. OTH, it also doesn't matter how little you spend, once you recognize that retail therapy can't help you and that expensive trips provide, at best, a temporary respite.

Sunflower

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Re: Starting PhD in a new city -- how to do things right?
« Reply #5 on: April 17, 2013, 03:24:31 PM »
My PhD stipend is $2150/month after taxes and I pay $750/month for rent + utilities. I do live with roommates and while I'd be happier living without them, bumping up my house allowance to the $1000 mark would make it very difficult for me to save anything. As it stands now, budgeting trips to visit family really stretches my budget and 'vacations' are usually a groupon deal to a hotel within driving distance just to get away for 1-2 nights. 

The good news is, you're social circle will likely be a bunch of other poor graduate students so even if people like to go out frequently it will be at the dive bar across the street from campus.

lifejoy

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Re: Starting PhD in a new city -- how to do things right?
« Reply #6 on: April 17, 2013, 07:31:42 PM »
Re: new dress for a wedding - can you borrow one from a friend? Procure one during a clothing swap with friends? (I did this! Get people to bring clothes and a snack, and it's quite a party!!) Buy one and then return it after? (Haha Jk)

I think your goals are good. I think even mr. Money moustache goes on vacations.

bogart

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Re: Starting PhD in a new city -- how to do things right?
« Reply #7 on: April 17, 2013, 07:49:51 PM »
    I'm a fan of travelling while you're a student, as typically you'll have plenty more flexibility in your schedule, as well as fewer things (dependents, stuff) tying you down at home, making even tropical vacations relatively cheap.  Plus you may find you qualify for reduced student rates, further increasing the relative value (as compared to later).  So no face punch from me.

    I'm not so sure that stipends count as earned income -- pretty sure that at the institution where I work, they don't (i.e. are structured not to) -- and thus, yours may not make you eligible to contribute to a Roth, assuming that's your only source of income.  OTOH you may find that they are sheltered in assorted ways from taxes that would not be true were they earned.  YMMV, check with someone who will know (your school's financial aid experts, perhaps, or a tax attorney).

    See e.g.

    ... for some discussions of types of grad school income and taxability.

daymare

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Re: Starting PhD in a new city -- how to do things right?
« Reply #8 on: April 18, 2013, 08:31:13 AM »
Thanks, everyone, for your feedback! My biggest takeaway is that, yes, getting a PhD is in many ways a big luxury, and that I should see how well I'm able to save money with my new much-lower income before assuming I'll be able to afford travel.  Like bogart, I was thinking about the travel potential of being a student (flexibility & being happy with things like sleeping in a tent vs. nice hotel).  It's probably a good call to hold back on making vacation plans until I have a better feeling for what I'm saving and can afford -- just as I intended to.  I'm quite sure that my tuition waiver is not considered earned income, but that my stipend is taxable earned income, and hence I can contribute to a Roth, but I will definitely double-check.

I probably should have expected most Mustachians wouldn't regard grad school as a great choice -- but for full disclosure, I'm going to a top program in my field, and yes, for that area, salaries of professors are much higher than what I made before grad school. But no matter, I'm not trying to defend my life choices, and welcome everyone's personal opinions.  I'm looking to find an apt within the next few weeks, so I'll post an update then.

Christiana

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Re: Starting PhD in a new city -- how to do things right?
« Reply #9 on: April 18, 2013, 08:45:46 AM »
As a graduate student, I always set my rent limit at 1/3 of my gross stipend, which was enough for me to live alone on.

Some schools keep off-campus housing lists of local rentals for their students.  That can be a good place to find cheaper housing, but compare the prices against the local newspaper and Craigslist listings.

If at all possible, take one day a week completely off from Ph.D. work.  You'll do better work the rest of the week, and will greatly enhance your chances of surviving and finishing the program.

I used the schedule flexibility of graduate school to get outdoors, go to all the thrift stores, go yard saling, and read lots of how-to books.  Those are the parts of my Ph.D. education that I am really using all the time now.

I wouldn't necessarily plan on finding a position as a professor after graduation--academic positions often get hundreds of applicants, and higher education in general is moving away from tenured faculty toward low-paid, job-insecure adjunct faculty.  Even if the positions themselves pay well, there probably aren't nearly enough of them to go around to all the graduates; about half of the doctorates in my field end up working outside it, because the jobs just aren't there, either in academia or in industry.

StarswirlTheMustached

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Re: Starting PhD in a new city -- how to do things right?
« Reply #10 on: April 18, 2013, 10:23:23 AM »
I agree with Christiana : if you are expecting to come out with a faculty position and a raise, its highly unlikely.
"probably aren't nearly enough" isn't putting it strongly enough: there are not enough faculty positions for everyone who wants one in any field. You can count on being better than 95% of your field (being at a top school helps too, to some degree) but! You won't be making big professor bucks instantly, either. You may go through a postdoc or two, a teaching position or two, and spend longer than you want as a lower-paid assistant professor even if you do manage to stay in the academe long enough to get one of those ever-rarer tenured positions that pay the big bucks. The sum of it is that your total lifetime earnings are almost certainly going to be lower than if you'd just stayed where you are.

(fun fact: a prof here told me when he was hired as an assistant professor he actually took a pay cut from his last post-doc at a better-funded European institution; that did eventually change with tenure, but profs here live in townhouses, not mansions, and drive Pontiacs, not Mercedes. Most also work 60-80hr weeks, in my experience)

I am in a PhD program myself right now, but I think we have to be clear with ourselves going into it : it's for love, not money.
And there's nothing wrong with that. Part of Mustashianism is breaking out of the consumer mindset so you can afford to do the things that are important to you: working less to spend more time with your kids, or following your passion through higher education.

kkbmustang

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Re: Starting PhD in a new city -- how to do things right?
« Reply #11 on: April 18, 2013, 10:50:30 AM »
Re: new dress for a wedding - can you borrow one from a friend? Procure one during a clothing swap with friends? (I did this! Get people to bring clothes and a snack, and it's quite a party!!) Buy one and then return it after? (Haha Jk)

I think your goals are good. I think even mr. Money moustache goes on vacations.

Dinarik - I'm cleaning out my closet. PM me with your size and I'm more than happy to send you a wedding appropriate dress if I have your size.

lifejoy

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Re: Starting PhD in a new city -- how to do things right?
« Reply #12 on: April 18, 2013, 11:05:05 AM »
kkbmustang - that is so nice and generous of you! I love this community :)

daymare

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Re: Starting PhD in a new city -- how to do things right?
« Reply #13 on: May 13, 2013, 11:37:46 AM »
Everyone -- thanks for your feedback/comments/vacation face punch.  I absolutely appreciate everyone's intentions in highlighting the general downward trend in number of tenured faculty, increasing difficulty of obtaining a professor position, etc.  If anyone reading this is thinking about grad school (particularly PhD), that's important information to keep in mind.  I don't want to give away too much identifying information, but while I'm aware of general trends and actually have a healthy attitude in that I don't consider a tenured position to be the end-all be-all and only viable life path, I've also done my research and am in a good position with options.  The field I'm going into is one of the most lucrative for private-industry work (not that I want to do that), not to mention higher asst. professor salary than many fields, and I'm going to a T10 university -- important because this field is quite strict in that you're extremely unlikely to find a job at a university ranked higher than one you got your PhD in.  Not to mention I would be quite happy writing books & lecturing (not in academia), or being on a teaching track.

Quote
(fun fact: a prof here told me when he was hired as an assistant professor he actually took a pay cut from his last post-doc at a better-funded European institution; that did eventually change with tenure, but profs here live in townhouses, not mansions, and drive Pontiacs, not Mercedes. Most also work 60-80hr weeks, in my experience)

Ain't that the truth, sadly.  While I won't pretend to fully understand the level of research (something tells me my undergrad thesis don't resemble real research ;)), it's definitely worth noting that the life of a successful professor isn't an easy one.  Sure, there are many perks (certainly freedom and flexibility) that are appealing, but it's a lot of work.  My dad is a tenured prof at what's considered one of the best universities in the world, and he certainly works all. the. time. (but I don't think he'd have it any other way).  Not to mention, I know he and other professors would command quite a bit more money in the private sector.  I'm certainly not getting a PhD for money, because that would be a foolish expectation to have.

Quote
I am in a PhD program myself right now, but I think we have to be clear with ourselves going into it : it's for love, not money.
And there's nothing wrong with that. Part of Mustashianism is breaking out of the consumer mindset so you can afford to do the things that are important to you: working less to spend more time with your kids, or following your passion through higher education.

I love this -- I actually had a friend ask me why I was applying to PhD programs, was I not serious about retiring early?  I thought that was an odd question -- having enough money not to work is great, but continued learning & research are what I love and am interested in -- my goal is to be productive and enjoy what I do.  If I had lots of money and never had to work again, I'd want to pursue something similar, so why is working for the sake of having money to be able to do what I want ... better than going for what I want?  I'm continuing to save, not going in to debt, and sure I'm losing a LOT of potential earned income, but I'm excited for everything else I'll gain. 

An update on housing, etc:  I ended up finding a 2BR apartment that I'll share with a friend's (and ex coworker's) girlfriend, and will come out to $600/month per person with probably another $75/month per person for utilities.  I'm excited at how well everything worked out -- I'll be spending less than $700/month on rent & utilities and getting more room than I could have had on my own.  I made a budget and I should be able to save slightly over 40% of my net income if I remain really conscious of spending. 

Thanks everyone for your comments!

Thanks, kkbmustang, for your offer, I appreciate the sentiment.  I actually did end up buying a dress (http://factory.jcrew.com/womens-clothing/dresses/Day_Dresses/PRDOVR~50344/50344.jsp?color_name=casablanca-blue) when it was $60.  I probably didn't need it in the first place, but it's pretty classic and versatile, good quality and I'll be wearing it for many events to come.  If I don't end up wearing it to all the weddings, I'll definitely instead wear a dress I already own.

lhamo

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Re: Starting PhD in a new city -- how to do things right?
« Reply #14 on: May 13, 2013, 10:36:36 PM »
If you want to prepare yourself well for the realities of the academic job market, run don't walk to www.theprofessorisin.com -- she is awesome and is helping a TON of people make it into tenure track positions.  She's a social scientist/area studies by training, as I am, so if you are in a STEM field the advice might not be so pertinent, but still well worth the read.    And she's also very mustachian -- quit her tenured, department chair position to return to a place she fit better/devote more time to family, started this business and built it into THE premiere site for academic job counselling services.  If I hadn't made the jump to the non-profit sector immediately following my dissertation defense I would be trying to get a gig as a subcontractor for her -- might actually still do that sometime, you never know until you try!

I also recommend reading the Chronicle of Higher Education and Inside Higher Education regularly to keep abreast of trends in higher education hiring, etc.  But, be forewarned that it can sound all doom and gloomish, and yes, the overall market is terrible and higher education is tanking and the demographics are changing so there won't be as many kids in college (not even Chinese kids -- numbers dropping off here, too), and if you read too much of it it is easy to get sucked down into whiney complainypants mode and be all miserable and that is really unproductive.  I work on a major national fellowship program and over the past 5 years have been pleased to see MANY MANY (the majority, in fact) of my program alumni who defend their Ph.Ds. go on to get post docs, visiting assistant professor positions, and yes, even TENURE TRACK JOBS IN THE HUMANITIES!  It does happen, with quite a bit of regularity.  I have alumni who got tenure track positions this year at Michigan and UC-Irvine, for example, and another has a post-doc at Harvard.  Are they stellar academics?  Definitely -- they wouldn't have gotten the fellowships they did if they weren't.  But they aren't headed for a part time job at starbucks, either.  All three of these scholars are humanities people -- one anthropologist who focuses on the performing arts, one historian and one literature person. 

Good job on controlling your housing costs -- that is a major piece.  While socializing is an important part of stress relief, try to start good habits with your grad school friends/colleagues in terms of not developing pricey "Friday night at the brew pub" routines.  Beer can be just as much fun when it is homebrew over potluck in somebody's back yard.  Cultivate a circle of people who will support your mustachian habits and help you keep your costs down.  I had just such a circle in my grad school days.  One member became my husband :)

Hillcrester14

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Re: Starting PhD in a new city -- how to do things right?
« Reply #15 on: August 24, 2013, 08:14:22 AM »
Hey dinarik and all,

This post is a bit old by now but I came across it and was intrigued. I am also a PhD student striving towards financial independence. I agree that a PhD stipend and a career in academia will make it take a bit longer to get to FI, but I am also a proponent of pursuing what you love. All that to say is that I applaud you for pursuing a passion of yours even though it involves a lower paycheck.

I also admire your commitment to frugal living. That is something I myself have been working on a ton over the past few years as a graduate student. It seems like you made a solid choice to live with a roommate given the high cost of living in your city. I hope that works out for you. But I also wanted to point out that finding an affordable living situation is just the beginning of maximizing savings for students. There is plenty to be done too about saving money on your utilities, consuming wisely, saving money on food and groceries, and finding creative ways to go on vacation.

And finally, I think everyone is right to point out the tough academic market and to have reduced expectations about landing a job in academia, but there is a thawing occurring. One positive sign is that there has been a growth in Sociology and History positions over the past year.

Best of luck to you from a fellow frugal doctoral student. 

Albert

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Re: Starting PhD in a new city -- how to do things right?
« Reply #16 on: August 24, 2013, 11:10:51 AM »
Academia at top levels is a strange world, once upon time I had a dream to join it but changed my mind after seeing what it is closer. You get a lot of respect and at the very top also tons of money, but it's all work (often 70-80 hours a week) for decades to get there. Also these days professors spend a lot more effort fighting for funding than actually teaching or advising their grad students. Life in industry is a lot more pleasant both financially and work load wise (my PhD is in a STEM field). The kind of people who stay in academia rarely wish to retire early.

By the way I don't think there are less tenure track academic positions in research universities, it's mostly that competition is very fierce and favour graduates of top program. Get your PhD from Harvard, keep good relationship with your advisor and a mid level assistant professor position is pretty much yours.

StarswirlTheMustached

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Re: Starting PhD in a new city -- how to do things right?
« Reply #17 on: August 24, 2013, 03:45:19 PM »
I'm out, but the way a cheery professor described it to me once when I ran into him on a weekend (The conversation started with a joking "You have tenure now! You can go home on the weekends!" to which he, honestly puzzled, replied "Why ever would I do that?") -- he only works full time. The other twenty to forty hours a week? That's his hobby. It just happens that it's very similar to his job, and feels very lucky that he's allowed to do it at all. Like most professors, they're going to have to carry him out of the lab in a pine box; early retirement is a horrifying idea to a man such as he. If he were FI, he'd... well, he'd probably try and charter a charity and endow himself somehow. Pretty much every prof I've met shares the same attitude.

By the way I don't think there are less tenure track academic positions in research universities, it's mostly that competition is very fierce and favour graduates of top program. Get your PhD from Harvard, keep good relationship with your advisor and a mid level assistant professor position is pretty much yours.
Yeah, it seems every cow college and half-rate degree mill on the continent has profs from Stanford, Princeton, MIT or Harvard, so what's that say for the rest of the world? It doesn't look good.

Albert

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Re: Starting PhD in a new city -- how to do things right?
« Reply #18 on: August 24, 2013, 04:14:33 PM »
There are lots of professors like that, but there are also some who have suffered a burnout or lost interest in mid career. You are unlikely to meet them in the top 10 departments, but at a level just below (say University of Arizona or similar) it happens. A popular escape route is moving into university administration.




Hillcrester14

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Re: Starting PhD in a new city -- how to do things right?
« Reply #19 on: August 25, 2013, 02:09:13 PM »
For every over-worked, top-tier university professor, though, there are plenty of other professors teaching at smaller liberal arts colleges who get to focus primarily on teaching and less on research and absolutely love what they do. If I hadn't been in a classroom with such professors, I don't think I would have chosen to pursue a career in academia. And you don't necessarily need a degree from Harvard to get a position like that emphasizes teaching. Admittedly, my viewpoint may not be representative of academia as a whole, but I also don't think you have to live by the publish-or-perish mentality. At least I am seeking to go into this gig without buying into that system.