How much money from your stipend do you save each month? How and why?

[anachronistic]

For all those living on small stipends/incomes-,what percentage of your earnings do you save each month? How easy is it for you to manage your savings? I'm figuring out right now how to create a detailed budget. If you have any tips for saving money, tools for organizing your finances or hints- please feel free to share! If you have any tips on budgeting for conference travel or study abroad they would be most welcome!

My plan is to save 35% of my income. I have an extra job that I use to pay the rent, and it definitely helps, but I sometimes worry about having enough money for emergencies. I'd love to find a nice financial organizer, but so far I have not found anything suitable. How do you organize your finances? Potential Apps and various online tool suggestions are welcome!

[ktel]

I use plain ol' Excel to make my budget and to keep track of my spending. Works very well. I track each category, what I've spent that month, and what I have left to spend that month. After I subtract lump sum expenses such as travel, tuition and books and gifts, I'm left with $1500/month to spend on rent, food, and luxuries. I've seen this as the recommended distribution for your budget: http://www.debtfreedestiny.com/budgeting/recommended-budget-percentages-and-guidelines/

My housing is 33% (utilities included), food 22%, transit 7%, entertainment 9%, clothing 5% and some other miscellaneous items. My food costs are high, but I'm a very committed athlete and I need to be well fed, and that's what it costs to do that. I save 10%, which is the recommended amount. I always pack a lunch, but go out for dinner and out for drink every once in a while.

[robot_hamster]

People actually save money from their stipends? Haha! I have to work an extra part time job just to make ends meet! My stipend is less this semester than it was last semester as well, so that makes it tougher. From my paycheck at my job, $20 automatically goes into a savings account (so that's every 2 weeks). Sometimes the money doesn't stay in there though. I am often tempted to take it out because I need gas or something toward the end of the month (when funds are running low).

I suppose if I had a larger stipend, I would probably put a small amount toward savings. However, I would rather put extra money toward my student loan debt (from undergrad). I don't "have" to pay on it right now, but it would have been nice to have the ability to pay it down a bit before I have to enter the "real world".

Edited September 29, 2011 by robot_hamster

[long_time_lurker]

I used to put $1000 a month into a 403b at my job, but now that I'm only part time there I lowered it to $250. The sooner you save for retirement, the better. You folks who only earn stipends really ought to look into an IRA because you'll qualify for the retirement savings tax credit, plus the money you put in the account isn't taxed (the money will be taxed later in life when you take it out).

As for saving on expenses, using coupons and cooking at home is a biggie, though I must admit I've been a profligate spender on food thus far this semester, whether it's the pizza place or the diner.

I also like hot weather so I rarely use my AC in the summer, and in the winter I keep my thermostat at 68-70 now and wear thermals instead of putting it on 75 like I used to. I save a lot of money on oil that way.

Edited September 29, 2011 by long_time_lurker

[UnlikelyGrad]

Are you kidding? I have to support 3 kids and myself on less than $2000/month and still save money?

I do have a Roth IRA...I started it years ago. Now I'm letting compound interest do its work while I take a little break from making contributions.

[runonsentence]

I like http://www.mint.com as a financial tracker/planner sort of website. It tracks and categorizes your purchases and also has budget planning features.

[qbtacoma]

I squirrel away a small amount of my paycheck each time - less than $100 - but this is for, alternatively, fun travel (as opposed to work travel) and paying off interest from my student loans. Or, I suppose, emergencies. I am able to do this, though, because I got a smokin' deal on housing, I cook for myself, and I don't drink beer (which can make pub night kind of boring at times, but I don't like the taste of it). The trade-off is an hour commute each way, and I'm really having some trouble with that, energy-wise.

Anyway, "saving" is a bit of a misnomer. I'm planning on spending it all within the next year.

[poco_puffs]

As my stipend only covers the school year and not the summer, I try to save as much as I can each month so that I'll have a cushion for rent and food during the summer. This past summer I got a part-time job to manage, since my savings weren't nearly as consistent as they could have been. This year my stipend has been adjusted a little higher and I'm heading in with foreknowledge of the money-crunch in January and towards the end of the school year.

Originally I was hoping to save and put some each summer toward paying off the interest accruing on my student loans. That didn't happen.

Incidentally, my budgeting strategy = spend a little bit more at the grocery store, even though it'd be cheaper to just subsist on staples, because I'll be more likely to eat the $3 microwave meal at home than cook myself a huge thing of chili and rice from scratch. My cooking just doesn't work like that yet, and if I only have staples around the house I'm much more likely to go out and blow $8-$10 on food at a restaurant or take-out place rather than prep, cook, clean, repeat. That being said, food has definitely been the hardest part of my budget to manage.

[ktel]

I like http://www.mint.com as a financial tracker/planner sort of website. It tracks and categorizes your purchases and also has budget planning features.

This looks like it's a lot better than my Excel spreadsheets! But they both basically serve the same function. I always suspect programs like these of selling your personal information though.

[UnlikelyGrad]

I squirrel away a small amount of my paycheck each time - less than $100 - but this is for, alternatively, fun travel (as opposed to work travel) and paying off interest from my student loans. Or, I suppose, emergencies.

I guess I do this too. Some of my expenses are big things I pay once or twice a year, and so I budget 1/12 of the yearly amount every month instead of trying desperately to come up with a huge lump sum. For example, I basically pay one month's salary, twice a year, for health insurance for the kids. It's a lot easier to set aside 1/6 of my monthly salary than to live on nothing two months out of the year. I do the same thing for home & auto insurance as well.

And yes, I do put aside a few dollars each month so we can have a vacation of sorts every year. Although, admittedly, I can only afford the sorts of vacations that involve (1) camping or (2) visiting relatives.

[runonsentence]

This looks like it's a lot better than my Excel spreadsheets! But they both basically serve the same function. I always suspect programs like these of selling your personal information though.

If I remember correctly, they mostly (completely?) make money through suggesting (advertising) various financial services, but it's at least the kind of advertising you can benefit from.

For instance, there is a feature on the site that takes your financial profile into account and sees if you can use a different service to make money. Say you're keeping a small amount of money in savings, and another bank has a higher savings rate: it suggests that you try out another bank with a higher savings rate. The bank wins because it suggests you use it, and you win because you can earn a higher interest rate.

[StrangeLight]

check your department, your regional studies center, and your school for travel grants for conferences and research. you'll be surprised how much they have. i went to a conference in a resort hotel in barbados and didn't pay a penny for it because, by cobbling together my school's resources, i found $1000 for conference travel. ideally, you should not have to pay out of pocket for any conferences or research trips. ask fellow grad students if they know of funds you can tap.

also, don't buy books for class. get them through interlibrary loans. in my department, we take 3 seminars a semester, and each seminar has at least one book a week. if you buy all of them, even used, even on amazon, it will set you back hundreds of dollars, so anything that isn't directly related to my research i get through ILL.

at one point, my stipend was so low (because the US government withholds a ton of tax for international students) that after i paid all my bills, i had about $350 to live on each month. that barely covered food and one tank of gas, so no savings there. now my stipend is higher, so i manage to save just over $200/month (around 13%).

[Behavioral]

My answer depends on what you define as 'saving'. Besides my current living expenses at my college town, I usually save around $500-$750 each month to help pay for one of my mortgages back at home (one is being occupied by my mom; the other is currently being rented out). If I itemize that mortgage payment into my living expenses, then I only have around $100-$200 each month to spare, more or less, for messing around.

[far_to_go]

One thing that I do to help manage my money: I have a $10k chunk of money that is paid to me at the beginning of each school year (it's a fellowship in addition to my usual TA salary). As soon as I get that big chunk, I pay my rent for the entire year, August-July. It's really nice to have the convenience and peace of mind that comes from knowing that I don't have to pay rent every month. Obviously, not everyone will have this luxury, but if you can do it, I highly recommend it.

I also have an INGDirect savings account into which I automatically transfer $100 from each paycheck. It's got great interest rates, and it's separate from my normal bank account. That's my "emergencies/summer" fund.

I haven't started any sort of retirement savings plan yet, and I'm 26... I should get on that.

[bedalia]

One thing that I do to help manage my money: I have a $10k chunk of money that is paid to me at the beginning of each school year (it's a fellowship in addition to my usual TA salary). As soon as I get that big chunk, I pay my rent for the entire year, August-July. It's really nice to have the convenience and peace of mind that comes from knowing that I don't have to pay rent every month. Obviously, not everyone will have this luxury, but if you can do it, I highly recommend it. I also have an INGDirect savings account into which I automatically transfer $100 from each paycheck. It's got great interest rates, and it's separate from my normal bank account. That's my "emergencies/summer" fund. I haven't started any sort of retirement savings plan yet, and I'm 26... I should get on that.

I also get lumpsum payments (at the start of each term). Instead of paying rent in advance, I kept my money in an INGDirect account, automated monthly transfers to my checking account, and gave my landlord post-dated checks. Same peace of mind as paying it all in advance, but I also earn some interest on my money by keeping it in my possession for as long as possible (instead of my landlord earning interest on my advance payments). Every bit helps, right?

[Behavioral]

Yeah, there's no point in frontloading rent payments when it could be accruing interest. Even with low interest rates, the earnings on $10k over a year are worth keeping.

[IRdreams]

I set up an IRA and put away the full allowable $5000 every year. This is approximately 16% of my current income though when my stipend was lower it was more like 20%. This sometimes feels a little bit uncomfortable since I find it difficult to save additional funds for a rainy day on top of that sum. When I'm fellowship, I'm paid in a lump sum for the semester so it is easier then since the rainy day is built into that, but when I was TAing month to month payment left me worried about what if something catastrophic were to happen.

My new goal is to use the lump to save at least a month amount in a traditional savings account, while still being committed fully to the IRA. Why do I put so much in the IRA? The magic of compound interest means that any money we put away while younger the better as this money is "worth" the most come retirement.

My Achilles heel: eating out. I get really board with home cooked food and get specific cravings that make my wallet skinny and my waist not so much. I cook a lot and a diverse array of foods so I'm still not sure how to conquer the boredom beast.

On a side note, much financial advice suggests 10% savings as ideal. But they also suggest that when you are younger you should save more than this amount if possible. As we age we wind up with a lot more fixed costs (mortgage, kids, ect) so paradoxically it is easier to save in your youth since you are less invested in maintaining a specific lifestyle.

[eco_env]

why save when interest rates on my loans are higher than interest rates on savings? I'm spending as little as possible and if I end up with extra money I'll make payments on my loans.

[Behavioral]

why save when interest rates on my loans are higher than interest rates on savings? I'm spending as little as possible and if I end up with extra money I'll make payments on my loans.

Just trying to clarify: I'm assuming you're currently taking out loans to finance your education? This option, for example, isn't available to me since I paid off all my undergrad loans and am not currently taking out any for grad school.

[Behavioral]

I set up an IRA and put away the full allowable $5000 every year. This is approximately 16% of my current income though when my stipend was lower it was more like 20%. This sometimes feels a little bit uncomfortable since I find it difficult to save additional funds for a rainy day on top of that sum. When I'm fellowship, I'm paid in a lump sum for the semester so it is easier then since the rainy day is built into that, but when I was TAing month to month payment left me worried about what if something catastrophic were to happen.

My new goal is to use the lump to save at least a month amount in a traditional savings account, while still being committed fully to the IRA. Why do I put so much in the IRA? The magic of compound interest means that any money we put away while younger the better as this money is "worth" the most come retirement.

My Achilles heel: eating out. I get really board with home cooked food and get specific cravings that make my wallet skinny and my waist not so much. I cook a lot and a diverse array of foods so I'm still not sure how to conquer the boredom beast.

On a side note, much financial advice suggests 10% savings as ideal. But they also suggest that when you are younger you should save more than this amount if possible. As we age we wind up with a lot more fixed costs (mortgage, kids, ect) so paradoxically it is easier to save in your youth since you are less invested in maintaining a specific lifestyle.

Aside: do those models typically include grad students in their normative advice? i.e., Does the expected increase in income bigger than the increase in fixed costs going from grad student (fellowship/assistantship) to professor (salary)? I think there's an assumption with the 10% savings that income is held fixed or at least 'sticky'.

[wreckofthehope]

.

at one point, my stipend was so low (because the US government withholds a ton of tax for international students) that after i paid all my bills, i had about $350 to live on each month. that barely covered food and one tank of gas, so no savings there.

I'm in a similar situation -- my school's HR office implied that I would get the tax back but I haven't been able to find any concrete information on whether that's true or if I need to do anything to get it -- did you get any of it back?

[StrangeLight]

I'm in a similar situation -- my school's HR office implied that I would get the tax back but I haven't been able to find any concrete information on whether that's true or if I need to do anything to get it -- did you get any of it back?

i got a good chunk of it back. the government withholds 14% of your paycheck, but because i'm only in the 3% income tax bracket, i got 11% of my monthly earnings back. my tax return was a few hundred dollars higher than my monthly paycheck, so i used it to buy a macbook pro. it's sort of like forced savings, in a weird way. you will get almost all of it back when you file for taxes.

[wreckofthehope]

i got a good chunk of it back. the government withholds 14% of your paycheck, but because i'm only in the 3% income tax bracket, i got 11% of my monthly earnings back. my tax return was a few hundred dollars higher than my monthly paycheck, so i used it to buy a macbook pro. it's sort of like forced savings, in a weird way. you will get almost all of it back when you file for taxes.

Thank you - it's great to have that corroborated! I've been trying not to get too hopeful about it in case it wasn't going to happen.

[ktel]

I put a chunk of my lump sum payment in a savings account, but interest rates are terrible right now. I get a much better return on my TFSA (tax free savings account, a Canadian thing) which is invested, but because I opened the account in my home province, I can't transfer funds into it from my grad school province. Which is extremely frustrating because I could be making a much higher return on some of this money

[poco_puffs]

My Achilles heel: eating out. I get really board with home cooked food and get specific cravings that make my wallet skinny and my waist not so much. I cook a lot and a diverse array of foods so I'm still not sure how to conquer the boredom beast.

I hear you on the boredom thing, and I had thought about this a bit earlier in the year when the open days of summer seemed full of time and possibility. Anyway, I think part of the appeal of eating out is that food made by other people just has that delicious quality that WE did not make it. To get around that, still save some money, and expand our own culinary horizons, I'm thinking about asking people from my cohort to come to my house and teach me to cook something. Ideally, there'd be 4-5 people, and we'd all cook some element of a feast together in the kitchen, so it has the deliciously ample result of a potluck but with the added value of instruction. It hasn't happened yet, partly because my kitchen and the rest of my living quarters are never quite presentable at the same time.