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?