Any good budgets for PhD stipends?

[ts1493]

So, now that I've been accepted at a PhD program and hope to start in the fall, I'm wondering if anyone out there has a good budget that they created for living on their PhD stipend.  I've received what seems like a generous stipend ($25,900 that includes an extra 5 year scholarship).  My husband is also starting his PhD and we're waiting to hear about his funding, but hopefully we'll try to make it work with both of our stipends.  

What worked for you?  How much did/do you budget for rent, food, transportation, etc?  Any tricks to keeping expenses down?   

[TakeruK]

Cost of living is so important to provide useful information! For a graduate student, I think the biggest expense that is affected by cost of living is the rent cost, so when I was deciding whether or not each offer provided enough money to live on, I took a look at the rents for areas I would want to live in. 

We currently live in a very high cost of living area now. I don't want to provide details of my budget online since it's a bit personal, but I can say that our total household budget has ranged between $40,000/year and $50,000/year for two people in a high cost of living area. The fluctuation is due to finally being eligible for my school's subsidized housing program, because the market rent here is so ridiculously high (if you only had a single grad student stipend and tried to rent in a one bedroom place, you would spend 60% of your stipend just on rent!); but also due to the Affordable Care Act making insurance for my spouse a lot more affordable (Thanks Obama!).

This budget includes the costs of owning a car, expenses for many types of insurance (car, life, rental, liability), necessary things such as phones, internet and luxuries such as eating out and going to movies. 

When considering grad schools, our general goal in terms of finances was to be at a place where we would save at least $10,000 each year, on average, towards future things like eventually buying a home etc. Because we were international, there were a lot of hoops to jump through so that my spouse could find employment, so the first year, we had to dig into our savings a little bit, but since then, we have been doing a good job of meeting our savings goal.

Overall, I would say that two grad students with stipends similar to yours should be able to live fairly comfortably. I would define "comfortably" as something like all of your expenses that you need to live add up to something like 80% to 90% of your after-tax income. Neither my spouse nor I are interested in purely spartan living for the sake of a PhD, so I turned down some offers with stipends less than $20,000/year in equally high cost of living areas because I felt it was just not worth it.

[TakeruK]

You also asked for some tips on keeping expenses down! Here are some that work for us:

1. When I cook dinner, I try to cook something that will make 6 meals (feeds 2 people three times). We eat it for dinner and then for 2 of the lunches during that week. Cooking at home costs something like $2-$3/meal but eating out is easily 2-5 times that much.

2. Bundle insurance! Getting all of our insurance from the same provider saves us a bunch.

3. Buy in bulk and know the sales cycles. We do this especially for Costco. I've gotten their flyers for a long time now and basically almost every item is on a 3 or 4 month cycle (i.e. if it's on sale in January, it will be on sale again in May). Each item is on a different cycle though, but if you get it on sale, you can easily save $5-$10 per item. Whenever we go to Costco, we try to only buy items that are on sale and we buy enough to last until the next time it's on sale. Sometimes you're off-cycle and you run out of toilet paper (for example) when it's not on sale---of course, we would still buy it because it's a necessary item!! But, then if it goes on sale next month, we would buy more, enough to last us the next 4 months so that we can get on-cycle next time. We only do this for the big items that we use a lot of (e.g. toilet paper, paper towels, etc.) or items that cost a lot of money. We save several hundred dollars per year this way, more than the cost of Costco membership.

4. Similarly, with groceries and other items, we establish a shopping route and try to get the "loss leader" items in flyers each week. So, we might do our groceries across 3 stores to save money and we also stock up when staples like beans etc. go on sale. I also plan the dinners for the week based on what's on sale. We establish an efficient route (i.e. plan out all of our errands for the whole weekend and do that with groceries too) so that everything can be completed in 1.5-2.0 hours. I think it saves us something like $700 per year. 

Each of these save us only a few hundred dollars per year, but the combined action of all the efforts can save several thousand dollars. For a grad student stipend, this can add up to 10% or even 20% of your total income, which I think is totally worth it!

[ts1493]

1 hour ago, TakeruK said:

Each of these save us only a few hundred dollars per year, but the combined action of all the efforts can save several thousand dollars. For a grad student stipend, this can add up to 10% or even 20% of your total income, which I think is totally worth it!

Thanks!  This advice is actually exactly what I was asking for.  More than a detailed personal budget just what are some strategies you use to keep costs down, manage expenses, and is it realistic to save, etc.  We have been working for several years so doing the PhD programs will definitely be a wage cut for us, but hopefully a worthwhile investment in our future.  I was finding that without another degree my employment options and salary were really hitting a ceiling, and I've been looking forward to going back to school, to learn and to grow.  

We're likely moving to the greater Boston area which from living there I know can be a very pricey place to live.  That said, I think some of these strategies and others we've been thinking of (living close by to at least one of our schools to cut down on transportation expenses, etc) will help things stay manageable.  

[zipykido]

I save myself a ton of money by cooking instead of eating out. I usually only eat out 2-3 times a month but when I cook for myself I easily only spend about $50 a week on food. It gets monotonous sometimes but it's not hard to generate variety. Since you have a spouse, it might be a little easier for you since you can split the cooking duties. It's mostly a discipline thing though, just live below your means and you'll be fine.

Edited February 6, 2016 by zipykido

[MarineBluePsy]

I'd add getting a crockpot and actually using it.  I'm amazed at all the meals I'm able to create and the leftovers really come in handy during busier weeks.  Also casserole dishes that are freezer/oven/microwave safe.  You can throw in all the raw ingredients to be frozen until you need it, then defrost and straight into the oven for dinner.

I also saved a ton of money switching to natural cleaners.  Vinegar and baking soda make my house much cleaner than any of those commercial products I spent tons on and they leave a clean smell rather than a chemical one.  An unexpected bonus was that I got sick less which meant not spending money on over the counter meds or extra doctor visits.

Hmmm what else....I don't pay for tv service.  I find plenty of free stuff online and don't care if I have to wait a week after the episode aired to see it.

[Horb]

So, I use Mint to track my spending and make budgets for each category of spending, such as: rent, utilities [for me, this means internet, cell phone, heat, electric bill], groceries, renter's insurance, student loan payment, fun money [i.e. for going out], credit card payment [if necessary], and emergency fund contribution.

I make about $20,000 a year before taxes. Last year, I managed to save $4,000 of that (and go on a vacation). This year, I took on a second job and have saved $4,000 in the first semester.

I didn't realize how much money I spent on eating out or on random stuff I purchased on amazon until I got Mint. So recommend finding an app or some way to track spending.

[TakeruK]

1 hour ago, Horb said:

I didn't realize how much money I spent on eating out or on random stuff I purchased on amazon until I got Mint. So recommend finding an app or some way to track spending.

This is a great point! I keep a spreadsheet of my weekly expenses (update it each Sunday). It helps me keep track of my expenses as I go along and it also reminds me to pay my bills. Early on, I quickly learned how fast small things add up! I would spend $2 here or $4 there and pretty soon, I end up spending an extra $15 I didn't mean to spend that week. 

[biotechie]

22 hours ago, MarineBluePsy said:

I'd add getting a crockpot and actually using it.  I'm amazed at all the meals I'm able to create and the leftovers really come in handy during busier weeks.  Also casserole dishes that are freezer/oven/microwave safe.  You can throw in all the raw ingredients to be frozen until you need it, then defrost and straight into the oven for dinner.

Honestly, if I didn't have my crock pot, I'd probably starve. I'm in lab from 8:30 am to sometimes after 9 pm, so when I get home, the last thing I want to do is cook. An example of a week of crock pot meals for me:

Sunday: A 2-3 pound beef roast with potatoes, carrots, and red peppers. Make gravy from the juice and there's the meal. Store leftover veggies separately. Then divide the meat. Keep about 1 pound of it back and shred it to 1-inch chunks. Then use the rest for sandwiches or open-faced meals/lunches.

Monday/Tuesday: Eat the leftover non-shredded for sandwiches. Eat the veggies, too, plus salad.

Wednesday: Make chili in the crock pot using the 1 pound shredded leftover meat. Cook on low until you get home.

Thursday-Saturday: Leftover chili in any way you want: Chili mac, chili with rice, chili cornbread bake, etc. Include salads. Since I live by myself, I could technically eat this for lunches every day, too, but I usually end up sharing or freezing some.

That whole week of meals runs me about $15, cheaper if the roast is on sale. That with fixings for my lunch, other veggies, drinks, and snacks runs me about $25-30 a week, so $120 a month. If you join a Co-op or shop at farmers markets, you can go even cheaper. Just pick things that are versatile and can be combined to make lots of different things. Another favorite I have is beef stew in the crock pot.  

[rising_star]

Budgets are really individual so it's hard to make a general one. But, for me, the main thing I prioritized while in grad school was not eating or drinking out unless necessary. So, I didn't go to the coffee shop and pick up a cup every day or go out to lunch basically ever. I brought my lunch in or went home for lunch every single day. Was it boring? Hell yes. But, I saved a lot of money by eating the leftovers from dinner as lunch the next day. I actually still do this even though my budget is less limited now because it's an easy way to save money.

The main thing is to figure out what your fixed monthly expenses are (rent, insurance, etc.), set aside a certain percentage for savings/retirement (I always aimed for 15% but didn't hit it every month), and then divvy up the rest however you see fit. For me, I prioritized buying healthy food (so ~$100/month), good craft beer to drink at home (~$30-50/month), and travel (~$150/month). To save money on groceries, I split a Costco membership with someone else and would buy the basics which I used often at Costco, rather than anywhere else. For example, 1 pound of organic spring mix at Costco is about $4.50, which is less than my local chain grocery store charges for the 10 oz of the same thing. So, buying stuff like that in bulk to save money is a good idea. Now that I'm out of grad school, I also prioritize buying all of my meat and dairy from local and/or organic farms, which is more expensive but has reduced my consumption of those things. 

I don't actually have a set monthly budget but, I've heard good things about YNAB and Mint though I've never used either. I might one day if I end up sharing expenses with someone but, I have a system which works well for me, even though I basically never keep track of my expenses.

[MarineBluePsy]

4 hours ago, rising_star said:

The main thing is to figure out what your fixed monthly expenses are (rent, insurance, etc.), set aside a certain percentage for savings/retirement (I always aimed for 15% but didn't hit it every month), and then divvy up the rest however you see fit.

How are you saving for retirement on a grad student stipend?  I'll admit my knowledge of retirement savings is limited.  As I'm currently not in school and just working full time my job takes a huge chunk of my money (*grumble* darn union *grumble*) and puts it into a retirement account.  I know you can set up an account at most financial institutions, but aren't the minimum monthly contributions kind of high?

[rising_star]

1 hour ago, MarineBluePsy said:

How are you saving for retirement on a grad student stipend?  I'll admit my knowledge of retirement savings is limited.  As I'm currently not in school and just working full time my job takes a huge chunk of my money (*grumble* darn union *grumble*) and puts it into a retirement account.  I know you can set up an account at most financial institutions, but aren't the minimum monthly contributions kind of high?

Roth IRA is what I did. I didn't get close to the annual maximum contribution but, even being able to put in $50/month is better than nothing. As a grad student, I wasn't eligible to do retirement through the institution (no matches available) but, I went with a no-load mutual fund through a Roth IRA.

[MarineBluePsy]

44 minutes ago, rising_star said:

Roth IRA is what I did. I didn't get close to the annual maximum contribution but, even being able to put in $50/month is better than nothing. As a grad student, I wasn't eligible to do retirement through the institution (no matches available) but, I went with a no-load mutual fund through a Roth IRA.

I didn't realize you could make a smaller contribution and yeah $50 is pretty reasonable.  Hmmm I'll have to look into this further.

[rising_star]

@MarineBluePsy, check out options from the typical no-load places, like T. Rowe Price, Vanguard, etc. Or, check THe Motley Fool or more advice on retirement stuff. The minimums for a Roth IRA are typically set by the bank/financial institution you set up the account through. There's usually a set minimum to open the account, like $100, and then another monthly contribution amount. $50 a month doesn't seem like much but, 20+ years from now, it can be significant. Retirement savings are also one of those things which is really difficult to catch up on.

[zipykido]

1 hour ago, MarineBluePsy said:

I didn't realize you could make a smaller contribution and yeah $50 is pretty reasonable.  Hmmm I'll have to look into this further.

You can probably contribute up to about 5k into a Roth IRA. You'll get taxed on the money put into it but then it'll grow untaxed. Honestly though, you're better off paying off short term debts rather than putting your money into a long term retirement account while in grad school. It makes it easier to live when your monthly burden is lower and the PhD should generate a rather large income boost in the long run which can easily make up for lost savings growth. 

[rising_star]

6 hours ago, zipykido said:

You can probably contribute up to about 5k into a Roth IRA. You'll get taxed on the money put into it but then it'll grow untaxed. Honestly though, you're better off paying off short term debts rather than putting your money into a long term retirement account while in grad school. It makes it easier to live when your monthly burden is lower and the PhD should generate a rather large income boost in the long run which can easily make up for lost savings growth. 

If you don't have any short-term debts, then saving for retirement (even a little bit at a time) is a good idea. My monthly budget didn't include any debt payments because I didn't have any to make. I use credit cards to buy almost everything so I can get cash back or travel points then pay those cards off in full at the end of each billing cycle.

As for the income boost, this is definitely field specific. There are lots of jobs in the humanities (especially NTT and visiting positions) which pay ~$40K. That's not a particularly huge income boost over graduate school, especially when one considers the "lost" earnings of being in the PhD program. YMMV obviously since I'm not financial consultant.

[ts1493]

I think we're definitely going to try and continue plugging away at our Roth IRAs, even if the contributions are really slim.  A couple years ago we met with a financial consultant for a free consult on how to think about retirement, when we were both working regular jobs full time.  It definitely convinced me that we need to keep making contributions, albeit small, especially since the time that we'll be in phD programs will be a major chunk of our adult working years.  

I like the idea of a slow cooker/crock pot!  Coming home and cooking can be so tedious sometimes, even if we're working together.  And making big batches of food I think will be very helpful.  I'm thinking maybe we'll sign up for a farm share to get our fresh veggies delivered (I used to be part of some pretty affordable ones....) and then just stock up on meat and dry goods/supplies at Costco.  I've never shopped there.  Is it really that much cheaper?? 

[ts1493]

Also, when I graduated college a family friend gifted me a subscription to the Kiplinger Starting Out magazine... it took me a while to read any of them but I was glad I eventually did.  Kiplinger's been around for around for a really long time and it's pretty well respected.  I think they give some solid advice (picking between a Roth and regular IRA, etc) and it's been really helpful over the years ... 

http://www.kiplinger.com/

[MarineBluePsy]

Thanks for all the financial tips everyone.  Yes I agree short term debt is always a bigger priority and if I continue on my current plan I will have wiped out 90% of mine this summer. That means if I get in this round my stipend will be focused on current needs rather than past life lessons.  

The income boost in Clinical Psychology largely depends on where you choose to work and the cost of living there.  So sure there are new grads making just under 6 figures starting out, but then there are also plenty making much less than that.

[TakeruK]

2 hours ago, ts1493 said:

I like the idea of a slow cooker/crock pot!  Coming home and cooking can be so tedious sometimes, even if we're working together.  And making big batches of food I think will be very helpful.  I'm thinking maybe we'll sign up for a farm share to get our fresh veggies delivered (I used to be part of some pretty affordable ones....) and then just stock up on meat and dry goods/supplies at Costco.  I've never shopped there.  Is it really that much cheaper?? 

Yeah! Some things we always get at Costco:

1. Oral-B toothbrush heads. When it's on sale, it's $32 for 8 heads, which is a 2 year supply for 1 person. At Target and other places, it's almost $20 for 3 heads. (Save $20/person over 2 years = $10/year/person)

2. Dairy products, such as butter and cheese are, on average, 20% to 25% cheaper than the grocery store. Our favourite is the Tillamook Extra Sharp cheddar, we pay $9 for a 2.5lb block, but at the grocery store, we would pay $12 for a 2lb block.

3. Toilet paper, facial tissue, and paper towels are a lot cheaper at Costco when they're on sale! It's really hard to compare these prices though because the companies do a tricky thing where the sizes they offer at Costco vs. regular stores are different, so you would have to basically read the package to get the total surface area of toilet paper in a Costco package and then compare it to the surface area in a not-Costco package. I don't have the exact numbers anymore, but I found at one point we saved about 10% on average when only buying things at Costco on sale.

4. The over-the-counter pharmacy is a lot cheaper as well, for both brand name and generic medications, but you do get a lot at once, so I would only buy things you need a lot (for us, we get vitamins, acetaminophen, ibuprofen and allergy medication here). For other things, they go bad so it's not worth it.

5. Random other stuff that we find is cheaper in bulk at Costco: bath soap, hand soap, dish washing sponges, cleaning supplies, laundry detergent, ziploc bags, alcohol. 

6. The food court thingy that they have makes a fast and cheap dinner (but not very healthy) so you can go to the Costco right after work and also get dinner there without worrying about having to cook on a weeknight etc.

7. Inkjet cartridge refills are cheap too but I found that I save more money by just not even owning a printer.

Not everything is better at Costco though. When Costco is not on sale, it can sometimes be the same price as the grocery store. Sometimes the grocery store sale is better than the Costco regular price. So for things that you can buy in large amounts (i.e. you consume a lot of or it doesn't expire) are worth it. I never buy things like bread there because although the per-loaf price is cheaper, we don't eat that much bread for it to be worth it. Even if we froze it, 2 loaves of bread would probably last us 2 months and we don't have enough freezer space to store everything!

Oh also the meat is both really good cuts and very reasonably priced there. We don't eat a lot of meat so I don't usually get it in bulk but if I wanted to have a dinner party and make a nice ham or a couple of steaks, Costco is the best deal. 

Finally, on the topic of crockpots---we have a nice potato soup recipe that we use often, but other than that, it's really hard to find crock pot recipes that aren't made with a bunch of meat. We're not vegetarian, but my spouse doesn't really like eating meat, so I usually cook with minimal amounts of meat. Anyone have some favourite meatless crockpot recipes?

[hippyscientist]

Does the Roth IRA thing work for intl students? I currently have my savings in an ISA in my home country and definitely want to keep saving through grad school.

As for budget things, I agree that the little things really add up. Chocolate cravings and coffees for me were my achilles heel, so I've limited myself to buying chocolate one week per month, and coffee once every two weeks. Bulk buying and crock-pots are fantastic money savers too. The other thing that I find really helpful is to not limit yourself. I probably eat out once every 3 months, if that, but then I enjoy it as it's a huge treat. Looking for coupons, specials, one-offs, sales etc. A good thing to look at is price per unit of the thing you're buying. If you have 20 toilet rolls for $10 or 6 rolls for $4 I know what I'm going for. Seconding the tracking your spending, I was really surprised the amount I spend on "sanity buys" - a new pair of workout leggings, a book, movie tickets stuff to keep myself calm when stressed. I replaced it with a gym membership which was cheaper and healthier!

Sorry that was a bit of a brain dump.  Hopefully something in there is a little bit helpful.

[zipykido]

4 hours ago, rising_star said:

If you don't have any short-term debts, then saving for retirement (even a little bit at a time) is a good idea. My monthly budget didn't include any debt payments because I didn't have any to make. I use credit cards to buy almost everything so I can get cash back or travel points then pay those cards off in full at the end of each billing cycle.

As for the income boost, this is definitely field specific. There are lots of jobs in the humanities (especially NTT and visiting positions) which pay ~$40K. That's not a particularly huge income boost over graduate school, especially when one considers the "lost" earnings of being in the PhD program. YMMV obviously since I'm not financial consultant.

Sounds like you're in a really good position then. I also have very little short term debt (aside from non-interest accruing loans) so living on a graduate stipend isn't very difficult for me, but I see some fellow students struggle with money. There are a lot of simple financial things that people tend to ignore since they've never been taught financial basics; such as having an emergency fund. Right now I'm saving up for a down payment on a house in the short term so most of my money is semi-liquid in an investment account. 

A trick I like to do with food sometimes is supplement take out entrees with a grain that I buy. I have a rice cooker so I'll go get some takeout and eat it with rice to make it go twice as far. Also buy yourself a pizza stone and have a couple of pizzas in your freezer. The cheapest medium pizza around me is like $12 for two toppings while a premade one from the grocery store is like $6. Also this a holdover from the undergrad days but keep an eye out for events that happen on campus. I can usually get 4-5 meals a week for free for just attending a seminar or talk; free meals really add up in the short term and increase your dietary variety.

[MarineBluePsy]

2 hours ago, TakeruK said:

Anyone have some favourite meatless crockpot recipes?

This site has some good ones: http://ohmyveggies.com/50-vegetarian-slow-cooker-recipes/

I'm also not a vegetarian, but sometimes I like to mix it up.  I've also found that most meat included crockpot recipes can easily be substituted for your choice of non-meat protein.

[TakeruK]

56 minutes ago, MarineBluePsy said:

This site has some good ones: http://ohmyveggies.com/50-vegetarian-slow-cooker-recipes/

I'm also not a vegetarian, but sometimes I like to mix it up.  I've also found that most meat included crockpot recipes can easily be substituted for your choice of non-meat protein.

Thanks!! I'm bookmarking this for my next weekly meal/grocery planning session! We usually used canned beans as a protein replacement for meat but they get too mushy when cooked for too long. However, in writing this sentence, I realised that maybe I should be using dried beans in a slow cooker instead! This is exciting....maybe there is a whole new set of meal choices in the future Thanks!

[MarineBluePsy]

1 hour ago, TakeruK said:

Thanks!! I'm bookmarking this for my next weekly meal/grocery planning session! We usually used canned beans as a protein replacement for meat but they get too mushy when cooked for too long. However, in writing this sentence, I realised that maybe I should be using dried beans in a slow cooker instead! This is exciting....maybe there is a whole new set of meal choices in the future Thanks!

Dried beans are also cheaper so that's a plus.  Because dried beans take way longer to cook regardless I find that sometimes I need to let the beans slow cook for a bit first and then add everything else, so you'll have to experiment until you find the right method.  I've heard some people soak them overnight first and then add them to slow cooker recipes, which is something I haven't tried but doesn't seem too inconvenient.