Author Topic: Would like some advice about student loan payments and budgeting  (Read 4077 times)

PandaKichi

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Hello,

I've got student loans of about $26k, and I've been accepted to a Ph.D program in Bioengineering with funding to the tune of $29k per year (which is more money than I've ever seen in my life). I want to pay off as much of my loans as possible early while I'm not required to make payments and reduce the accruing interest, but I don't know if it's more practical to do larger lump sum payments occasionally or smaller regular monthly payments.

Additionally, I've got no idea what sort of things should be budgeted for as an individual. I figure food, housing, and transportation are the big ones - but aren't there other things like insurance to be accounted for as well? I'm covered in terms of health insurance, but what other things should I keep in mind?

I feel pretty ignorant, so any advice will be appreciated.

Retired To Win

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Re: Would like some advice about student loan payments and budgeting
« Reply #1 on: April 12, 2015, 08:27:35 PM »
If you go to the MMM blog and look at any of his annual expense reports, you'll be able to see all the expense categories the MMM household has.  That would be a good start from which to start developing your own budget.

PandaKichi

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Re: Would like some advice about student loan payments and budgeting
« Reply #2 on: April 12, 2015, 08:37:13 PM »
Ah, thanks. I wasn't sure if the categories and percentages would translate given that some expenses were for people living together. Do you have any opinions as to the loans?

ClutchBeta

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Re: Would like some advice about student loan payments and budgeting
« Reply #3 on: April 12, 2015, 08:39:29 PM »
Congratulations on getting into your program and getting funded! If all you do is keep living a student lifestyle and saving the excess, you'll already be miles ahead.  I just wanted to point out that if any of your loans are subsidized, you should not pay them back until they start accruing interest.  Start with your highest interest debt first, of course.  Once you've paid off all your unsubsidized loans, invest in something that earns a return, rather than throwing the money at a zero-interest (for now) loan.

MDM

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Re: Would like some advice about student loan payments and budgeting
« Reply #4 on: April 12, 2015, 08:41:51 PM »
Food, clothing, and shelter are your necessities.  After that...it depends on you.

You could search the internet for "budget template" and get many results.  See also the case study sticky for things to consider.  Do you have parents or other older relatives?  They might actually remember what is was like to be your age....

Reading between the lines, you may want to hold off loan repayment until you have a few months of grad student living under your belt to see where the money goes.  Get YNAB or Quicken or Mint or a tracking spreadsheet and keep track.

Good luck!

PandaKichi

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Re: Would like some advice about student loan payments and budgeting
« Reply #5 on: April 12, 2015, 08:57:31 PM »
I see! I've tried talking with my parents about budgeting, but they don't talk about specifics because they think it's really none of my business... I.e. "You kids cost us way too much! Spend less!" And I'm gonna be the first US citizen in the family going to grad school. My parents came over in the 80's through an international relations program so as far as I can tell they didn't need to deal with student loans.

I really appreciate all the replies, thanks for the advice!
« Last Edit: April 12, 2015, 09:00:04 PM by PandaKichi »

rubybeth

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Re: Would like some advice about student loan payments and budgeting
« Reply #6 on: April 13, 2015, 06:43:57 AM »
Congrats! DH and I also continued to live like students after graduation, so I often recommend this method of preventing lifestyle inflation upon having a higher income.

I took a look at DH's and my budget from back in 2010 when we had just finished school. It's virtually the same as now. You're going to have variations on these, but hoping this will help:

Housing
-rent
-renter's insurance
-utilities like electric, gas, water, garbage
-internet connection (likely you'll want this if you don't have cable television plus homework needs)
-cell phone plan

Food
-groceries
-restaurants/coffee (probably a small portion of your budget)

Car (you may not have this)
-gas/oil
-maintenance

Amuseument
-Netflix or other streaming service
-concert tickets or other fun things

Clothing
-laundry (some rentals have laundry in-unit, some have it down the hall for $1 or $2/load, or you'll be going to the Laundromat)
-we budgeted some money to grow our professional wardrobe - you may or may not need this

Financial
-debt
-savings
-life insurance (as a married couple, we wanted this coverage, but it may not make sense for your situation, or your university may offer some level of coverage that would at least pay for your funeral if the worst happened)

I'd also recommend building a small cushion of funds (maybe just a month's worth of minimum expenses like rent, food, utilities) before paying off any debt. Some people call this an emergency fund, I just keep this amount in checking in case money stops flowing in for some reason (payroll can get messed up and direct deposit can be delayed, etc.). Then I'd see how much you actually spend each month in various categories (use Mint.com or some other tracking system for your expenses) and then throw everything extra at your student loans.

ShoulderThingThatGoesUp

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Re: Would like some advice about student loan payments and budgeting
« Reply #7 on: April 13, 2015, 06:56:18 AM »
That's a huge stipend, that's great! Is it someplace high-cost-of-living? I thought I was kicking ass when I got a $19k stipend in grad school, but that was in Houston just after the bottom of the recession so it went pretty far.

galliver

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Re: Would like some advice about student loan payments and budgeting
« Reply #8 on: April 13, 2015, 09:42:56 AM »
Congrats! As a current grad student, I agree with rubybeth's template. I also spend on clothing, as in my experience it does wear out. Depending on location, you may also have air/train/bus home for the holidays (or to visit friends), and/or a public transit pass.

Tips:
Live with a roommate! Just make sure to interview and find a good one. Make sure your cleanliness standards match, also expectations on visitors.

In low cost of living areas, real estate near the school might be ridiculously priced (also on-campus housing). Living farther away can save you cash. This may be different in expensive areas.

Don't set your eating out budget to zero. Coffee, lunch, and drinks is how grad students socialize. You'll be lonely. It's not worth it.

Build up a buffer of cash before other goals. You might have to float some conference expenses or similar for a few weeks. It's great to tell your advisor it's not a problem.

Use campus services: gym, health center, counseling. At least until you have reason not to (ie they suck).

Good luck!

rubybeth

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Re: Would like some advice about student loan payments and budgeting
« Reply #9 on: April 13, 2015, 12:38:26 PM »
One thing I forgot to add: if you'll be in a major metro area, or even a smaller university town, find out about what discounts students can get in the area. A lot of local businesses will offer discounts (movies, drinks, museums, etc.) and you may have discounted access to public transportation, too (free or reduced price bus pass, or similar), which could save you from needing a vehicle.

Gin1984

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Re: Would like some advice about student loan payments and budgeting
« Reply #10 on: April 13, 2015, 12:41:55 PM »
Remember to start saving for retirement before killing the 0% loans.  Are any of those loans not subsidized?

PandaKichi

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Re: Would like some advice about student loan payments and budgeting
« Reply #11 on: April 13, 2015, 01:51:23 PM »
Congrats! DH and I also continued to live like students after graduation, so I often recommend this method of preventing lifestyle inflation upon having a higher income.

I took a look at DH's and my budget from back in 2010 when we had just finished school. It's virtually the same as now. You're going to have variations on these, but hoping this will help:

Housing
-rent
-renter's insurance
-utilities like electric, gas, water, garbage
-internet connection (likely you'll want this if you don't have cable television plus homework needs)
-cell phone plan

Food
-groceries
-restaurants/coffee (probably a small portion of your budget)

Car (you may not have this)
-gas/oil
-maintenance

Amuseument
-Netflix or other streaming service
-concert tickets or other fun things

Clothing
-laundry (some rentals have laundry in-unit, some have it down the hall for $1 or $2/load, or you'll be going to the Laundromat)
-we budgeted some money to grow our professional wardrobe - you may or may not need this

Financial
-debt
-savings
-life insurance (as a married couple, we wanted this coverage, but it may not make sense for your situation, or your university may offer some level of coverage that would at least pay for your funeral if the worst happened)

I'd also recommend building a small cushion of funds (maybe just a month's worth of minimum expenses like rent, food, utilities) before paying off any debt. Some people call this an emergency fund, I just keep this amount in checking in case money stops flowing in for some reason (payroll can get messed up and direct deposit can be delayed, etc.). Then I'd see how much you actually spend each month in various categories (use Mint.com or some other tracking system for your expenses) and then throw everything extra at your student loans.

This is really helpful! I hadn't thought about stuff like renter's or life insurance, or even laundromat money (cause living on campus meant that it got punted straight to the tuition bill, and seemed like funny money).

PandaKichi

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Re: Would like some advice about student loan payments and budgeting
« Reply #12 on: April 13, 2015, 01:54:41 PM »
That's a huge stipend, that's great! Is it someplace high-cost-of-living? I thought I was kicking ass when I got a $19k stipend in grad school, but that was in Houston just after the bottom of the recession so it went pretty far.

Er, it's in Maryland so I guess it depends? Some current grad students said apartment rental locations were a huge factor in how expensive things are, but most of them seemed pretty happy with the amount.

PandaKichi

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Re: Would like some advice about student loan payments and budgeting
« Reply #13 on: April 13, 2015, 01:57:36 PM »
Remember to start saving for retirement before killing the 0% loans.  Are any of those loans not subsidized?

A very small percentage, which was why I'm trying to get rid of them as fast as I can

PandaKichi

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Re: Would like some advice about student loan payments and budgeting
« Reply #14 on: April 13, 2015, 01:59:50 PM »
Congrats! As a current grad student, I agree with rubybeth's template. I also spend on clothing, as in my experience it does wear out. Depending on location, you may also have air/train/bus home for the holidays (or to visit friends), and/or a public transit pass.

Tips:
Live with a roommate! Just make sure to interview and find a good one. Make sure your cleanliness standards match, also expectations on visitors.

In low cost of living areas, real estate near the school might be ridiculously priced (also on-campus housing). Living farther away can save you cash. This may be different in expensive areas.

Don't set your eating out budget to zero. Coffee, lunch, and drinks is how grad students socialize. You'll be lonely. It's not worth it.

Build up a buffer of cash before other goals. You might have to float some conference expenses or similar for a few weeks. It's great to tell your advisor it's not a problem.

Use campus services: gym, health center, counseling. At least until you have reason not to (ie they suck).

Good luck!

Thanks! The conference funding and campus services are good points, I didn't haven't gone to any conferences before and haven't really taken advantage of the services before either.