Budgeting in grad school
I’m keeping with the theme of my last column about going off to grad school and this time providing a primer about grad school budgeting. If you’re starting grad school this fall (or summer), you’ve probably already started to think about the things you’ll need and how you’ll navigate the new reality of being a student again (or, for others, of continuing to be a student). Columnist Elizabeth Stivinson (now covering the alternative careers beat) has written about how many Ph.D. programs are free, but it’s no secret that the stipends that are included typically come on the low end.
If you’re like me and came out of college with a nice hunk of student loan debt, the idea of going to school for free is very appealing (plus as a student, your federal loans will likely remain in deferment, further delaying those dreaded monthly payments). But even so, having that financial obligation hovering can be stressful, and, for me, that meant obsessively poring over every piece of financial advice I could find online.
Even if you’re going into school without loans or debt, the finances of grad school can be daunting. As the costs for basically everything keep going up, you may be wondering how you’ll manage on your stipend. While everyone's financial picture is different, here are a few points that could help grad students think about their finances in a productive way.
A quick note: This list is not inclusive of all budgeting approaches and won’t apply to everyone’s financial situation, so bear that in mind as you read along. Also, I’m not a financial adviser! These are just things I’ve experienced myself or have done research on through the years.
Grad school stipends vary greatly. They are not the same across the country and sometimes aren’t even the same between different programs at the same school. For reference, the Biochemistry and Molecular Biology Department at the University of Iowa provides an annual stipend of $31,000; similar programs at Boston University and University of California Los Angeles provide about $37,000 and $34,000, respectively. On top of this, tuition and healthcare is typically fully or partially covered.
Coming out of any kind of school without student loan debt is great, but the stipends themselves typically don’t leave a lot of wiggle room and can require some financial planning to avoid going into debt or taking out loans. If you’ve never had to live on a budget before, the good news is that there are a million tips online. From apps to news articles to social media, a simple Google search can help give you an idea of how to set up a budget.
Before using these budget tools, think about taxes — consider your total stipend and calculate the taxes that will come out. Every school handles taxes differently, and this is something that is important to know about up front. Some schools automatically take taxes out of every paycheck, and others require their students to pay their own taxes on a quarterly or monthly basis. If you’re responsible for your own taxes, I would recommend setting aside your tax money with every single paycheck so you don’t get behind and will have the funds to pay your taxes every year.
Since I’m not a finance expert, I’m not going to go into the specific details of how to make a budget (look online for free tools like budget calculators and tips on how to make a budget), but I strongly recommend you make one. For me, making a budget was crucial so I could feel somewhat in control of my finances. I tried to save by living with roommates in areas that were affordable but close to school, and I also didn’t have a car, which was a big savings in terms of parking, gas, maintenance costs, etc. I know that isn’t a viable option for everyone, so, if you are commuting to campus, make sure to ask about student parking rates and garages (they are oftentimes cheaper).
Making the budget was easy, but sticking to that budget was a different, less successful story. I used Excel to manually track my finances every month (with varying consistency) but there are also free apps like Mint or other budget trackers that can help automate budget tracking. Having a live look at where your budget stands can help make sure your staying within your stipend.
Planning for big costs
Once you have your basic costs covered, it’s time to think about savings. Grad school (and life) can throw you financial curveballs, and it’s best to be prepared. I bought not one, but two laptops during graduate school (maybe I should take better care of my electronics — don’t be like me, get that waterproof laptop sleeve). These were big expenses that I hadn’t planned for, which made it all the more difficult. Try to think about possible costs like this, or other similar costs like car repairs that may be on the horizon, and start saving for them slowly.
Also consider school-related expenses. For example, not every program or mentor will cover semester fees — these are flat fees at the beginning of each semester that aren’t covered by tuition costs. Sometimes, programs and PIs will cover these fees for their students, but that isn’t always the case. For me, these fees cost about $600 per semester. I paid them for the first three semesters or so until I officially joined a lab and my principal investigator kindly offered to pay for them. It may seem awkward, but it’s worth it to ask your PI if they will cover these fees after you join.
Another big cost to consider are conference costs. Hopefully you’ll get the chance to go to a conference during grad school, and the way this is paid for can vary. For me, my PI could use his department credit card to pay for my conference registration fees (which can range greatly), but I was responsible for paying for my hotel and travel arrangements. These were reimbursed, but not until after the conference was complete. This meant that I had to have the money to pay off my credit card bill for these costs before I received the reimbursement to avoid going into credit card debt. This can be challenging for those without a surplus of savings or extra financial help and is something to plan for in advance.
You can also ask your PI if they are able to pay for travel accommodations — every school and department has different rules, so you may not have to front the money and can avoid this headache. Either way, ask early about how conference travel and payment works so you can plan ahead.
When you need extra help
For those of you with dependents, medical conditions or other financial obligations that exceed the funds they have coming in, there may be options to supplement your stipend. Start by talking with your program director or coordinator. Some schools and programs have started operating emergency funds for students. Others have food pantries or similar programs that can help students get basic necessities when funds are low. These may not be limited to just Ph.D. students. Leaders in student government may also be able to guide you to these resources.
While I strongly believe that Ph.D. stipends should provide a livable wage, that often is not the case. If you’re finding you just aren’t able to make ends meet with your stipend, try talking to your program director or adviser (or another mentor you trust). They may be able to help you find teaching gigs or other gainful employment to help supplement your salary (although if that’s the case, try to set realistic boundaries and expectations about how that will affect your lab work so you aren’t working double time).
The finances of graduate school can be a significant source of stress (at least they were for me). Although I wish the stipends were higher, having budget tools in hand can help students work with what they have and live within the stipend. Stay tuned for a future article about retirement options in graduate school!
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This is an edited excerpt from “Life and Research: A Survival Guide for Early-Career Biomedical Scientists,” a book that started as a tweet, according to its authors.