Graduate school and money : what I would do differently now

I think very few people make it to the end of a PhD as the same bright eyed and energetic student they were when they entered. Much of graduate school is jumping through hoops and stroking other people's egos. More generally, it is a draining experience that often rewards the less deserving and more apparently mediocre of its students.

I say all of this because despite my best efforts to be a cynical as possible, I entered my PhD program as a naive 20-something convinced that I would almost immediately do two things a) develop an innovative research career and b) lower my debt. I was here for almost 4 years before I made any headway on either of those goals.

My research career is a story for another time and different blog. I did manage entirely eliminate almost 20K in consumer debt in 2 years, and another 15K in student loan debt over the next 2 years. I would have been able to do both much sooner had I made better decisions at key moments.

Looking back - if I could change the past, I would do the following:


Lived with roommates longer

I lived with roommates during my first year in a PhD program. My first roommate was a 70 year old woman with an anxiety disorder and a dying dog with serious bowel problems. I guess that burnt me pretty badly, because when my second set of roommates (who were wonderful in every way) decided to move into a two bedroom, I decided to rent a studio. If I could back, I would have gotten over my strange city/what if apartment smells like dog diarrhea anxieties, looked for a new roommate and put the extra cash on my debt.

Paid off my credit cards before the first day of class

Self-explanatory. I did this ahead of my Masters. I put every dime I made the Summer after I graduated from my BA on my credit cards and cleared my debt. Ahead of my PhD, I bought a laptop on credit and about 12 pairs of discounted shoes that year. Big mistake.

Applied to schools with substantial graduate housing

I can't tell you how badly I wish I had the opportunity to live in graduate housing. A few schools in NYC have graduate housing, and the rent runs between 500-800 a month.

Gone over funding offers with a fine tooth comb

My particular graduate program has a bad habit of verbally offering money and not delivering when the student arrives. Actually, they have a very bad habit of offering money on paper and revoking it based on standards that neither the student nor most of the faculty understand. I did not have money revoked, but I certainly did not receive the money I was promised. As a result, I always had to have many "second" jobs which delayed my progress and ran up my debt. If I could go back, I would have been more confident that I was an asset to a PhD program and either demanded my money, or gone elsewhere.

Considered professional training (i.e. Medical, Law or Business school)

Did you know that there are MDs out there winning grants and practicing science while earning salaries between 100-500K? My starting salary will be about 37K for a post-doc and about 60K for a faculty position - both less than what I made before I entered graduate school. MD training would have been a good financial option, even with additional student loans.

Set a monthly budget/used a web-based expenditure tracking system

Had I been more financially organized, I would have found the spare pockets of money to set up an emergency fund early.

Started an emergency fund immediately

Yup. I really should have done this, rather than hang on to my last pre-graduate school paycheque. I have since established an emergency fund in a savings account detached from my chequeing account. Since they are detached, I don't feel tempted to dip into my emergency fund unless it is really necessary because it takes a long time to transfer the money. This method works for me the way that freezing a credit card in a block of ice works for credit card junkies.

Set clear, obtainable financial goals earlier

My goals were always "lower debt", "save money". I really should have said "save this much by this date, by doing a, b, and c" and then checking my progress at every pay period.

Bought thrift store clothing

I ran up a lot of debt when I first moved to NYC. A lot of that money was spent on new clothing. I lost a lot of weight when I first got here (long hours, walking everywhere) so I needed jeans that would stay up and shirts that fit. I spent a lot of cash setting up an entirely new wardrobe. Thing is, I live in a city with the richest zip codes in the country and the most comprehensive thrift shops in the world. I now buy rich people's casts offs at Housing Works and buy almost everything but white t-shirts, underwear and runners on eBay. I save $100s in clothes and put that spare cash straight on my student loans.

So - what do we think? Are their any financial decisions you would redo if you could?

Bad money habits a graduate student should quit: Part 1

Graduate school can break your spirit and your wallet. If the insane workload and outlandish and hurtful comments from faculty do not lead to a few tears dropping on the floor, the long term just-above-poverty-line income will. I'm in the middle of a doctoral degree, in the most expensive city in the Western world. After a lot mistakes and a lot of hard work, I've lowered both consumer and student debt while I've been here. As I look back at the last 15 years of my after-high-school life, I see that I developed many bad money habits. This bad behaviour took its greatest toll during my two graduate degrees - a time when I could see my non-graduate friends buying houses, eating out at restaurants and driving new cars, and I was counting the quarters in my change dish to see if I could do a load of laundry.

Below are some of the mistakes I, and many of my graduate colleagues, made. I want to emphasize that I am not a financial advisor and no investment, insurance or mortgage advice is made below. I am a graduate student who has learned and broken bad money habits the hard way.

Paying everything and everyone but your emergency fund/savings account

You should really work on developing this fund before you enter graduate school, but better to put money aside late, than never at all. When I get paid, pay myself first - I mean within seconds of getting paid. No matter what the amount, I put 10% into a savings account that is difficult for me to access (i.e. a savings account at a different bank than my chequings account). This account does not have an ATM card and takes several days to transfer money. Every little bit of cash counts. When you are pi$$ poor, that 10% might seem like a lot.....but budget around it and see how you do. I may be scraping by the next paycheque, but my reserve is growing. When I do have and emergency, I have a buffer to protect me. As a result, I don't have to use my credit cards for unexpected expenses.

Even if a student gets paid $1000 a month, 10% savings is $1200 a year.

Living alone

Just silly. In the cheapest areas of Manhattan the minimal cost of a studio is approximately $1400. You can find a reasonably sized two bedroom in areas like the Upper East Side or Morningside Heights for around $2100. That's a 21% savings in rent.

Roommates can be irritating, true - but there is the limit time in your adult life when living with a roommate is acceptable and a roommate is great way to save money on overhead. If your roommate is in your program or in graduate school in general, you'll have someone with which to brainstorm ideas. If they are in a different industry entirely, you'll get to meet new people who are not transient graduate students.


Recreational shopping

Simply put - this is a dangerous habit. Find something better to do. If you are trying to reform a bad shopping habit, an easy technique you might try is one I adopted. When I got the uncontrollable urge to buy something, anything I would first pick out items and then ask if the total price was worth the anxiety of purchasing it. Always, I realized that it wasn't. Almost always, I still wanted to shop.


If I still needed to buy something, I would buy one, entirely consumable item that cost less than $2. That would be my consumable item for the week. I usually settled on a votive candle by the Yankee Candle Company. In the beginning, reacreational shopping was a tough habit to break for me. I ended up with a little stockpile of about 10 candles and a really smelly apartment. Eventually, it became easier and easier to ignore the urge. Now I never crave shopping. In fact, I find it distracting and a little tedious.

Buy on credit

Big mistake. Credit should be for absolute emergencies only and even then you should think twice. Never, under any circumstances, buy something with a credit card that you can wear or digest. If you can outgrow it, rip it or eliminate it, it is not worth paying interest on nor is it worth an escalating credit card balance.

Buy on credit when you have cash

I've seen people use credit cards this way. When I first had credit cards I did this as well - I would use the card when I had cash in my account. I would do so rationalizing that it was somehow better to have that cash liquid, and to pay my veggie sandwich and beer + 21% interest rate when I next had money to pay it. Sheer idiocy. Some people rationalize that it is really important to have that $15 in their chequings in case of an emergency. You won't have to worry about that, because if you break habit #1 you will have an emergency fund. Go ahead, buy that sandwich and beer with cash. It's worth it.

Carrying over credit card balances

This is simple. Carrying over credit card balances does three things 1) leads to compounding interest 2) makes it more likely that your debt will grow to an amount that will be difficult for you to pay off with your limited graduate student income 3) damages your credit rating. Be smart. If you use your card, pay it down completely on the 1st of the month.

Rationalizing optional expenses with future money

This is a classic tactic of the over-spender. Olympic over-spenders will rationalize unnecessary purchases or even loans with income they think they will make they get out of graduate school. You don't have that income tax refund, tips from waitressing next week, birthday money or even your next paycheque until it has cleared your account. As anyone can tell you who has graduated since 2007 - you have no idea what the job market will be like when you graduate. There are two reasons to never buy something with the expectation that money will eventually arrive 1) people who do this have a tendency to underestimate their actual expenditures and spend more than the awaited amount 2) there is no guarantee that amount will arrive or arrive on time.

Pay full retail price

If you are the perfect doctoral student, you will be finished your degree in 5 years. If you aren't perfect, you'll be out in 8. Paying full retail price on anything, particularly clothing is just a waste. Buy on sale as much as possible. If you really think you can justify paying full price, buy on sale anyway and put the difference in your savings. Remember - graduate school is short term. Dropping $100 on a dress that you can get for $50 two months from now isn't worth it.

Buying books

Four reasons - 1) you live in a small apartment 2) the New York Public Library has every holding you can think of and more (and many e-books to boot) 3) most fields of study rely on articles published in peer reviewed journals - anything else, you can borrow from the library.
4) average soft cover book costs $15-20. Even if you only buy 2 a year, that's enough for a studio Coned bill or a reasonable contribution to your savings. Save book purchases for when you have a sprawling apartment with a dedicated library.

Any aspiration to live a Carrie Bradshaw lifestyle

This is a killer in NYC. Every year 1000s of women in their 20s flood this city with images of Sex in the City-like events, clothes, and shoes....and every year, those girls end up to their necks in credit card debt. This is hardly the fault of Michael Patrick King, HBO or any of the principals at SATC. While a often a fluffy, cupcake of a show the producers did repeatedly introduce Ms. Bradshaw's entirely consumer good driven money problems -including a rather humbling scene where a very well dressed Carrie explains to a mortgage broker that not only does she not have any investments, she only has $700 in her savings because she just paid off her credit cards......of course, the show does revert back to fantasy when not one but two people cut Ms. Bradshaw a 20K cheque to use as a down payment for her apartment - thus bailing her out of perhaps a decade of overspending, and presumably bypassing all normal procedures of ensuring that a co-op resident has a 10% reserve.

Carrie Bradshaw doesn't exist. The women that genuinely live this lifestyle here were either born, married or scraped their way into the top 10% of incomes in this country. Wake up - a pair of Manolos...or even a pair of discounted designer heels from Century 21 is not worth the 21% interest you are going to pay on them. You are a graduate student - smart enough to not be 35 and recounting to a mortgage broker how you have less than $700 to your name.



So...what do we think? Are there other money habits a graduate student should drop?

Great reception sites for cheap wedding in New York: Part 1, Brooklyn

Photo credit: Shaun Baker Photography

Intimacy = Low Cost Wedding

In my experience the key to a cheap wedding is intimacy. We knew that we wanted to spend time with each guest at our wedding. We knew we didn't want to be pulled from one person to another. We knew that we wanted to hang back, have fun and not work our own party.

60 guests or less = intimacy, low cost and more event space options

When it came down to developing a basic outline of our wedding day, the first thing we did was cap the guest list at 60 people. If I could have had my way, there would have been only 8 people at a friend's house. I can assure you we had some very unusual stresses in planning our nuptials. Every family makes a little bit of noise about the guest list. Please believe me that it is easy to set a limited guest list in NYC. The city resolves guest list arguments for you.

You see, it is very difficult to find a reasonably priced space in NYC where you can host more than 70 people. We both have large families. We have a large group of close friends. We had colleagues we would have liked to invite. It came down to how willing we were to be stressed out by the presence and provisions for over 100 people. We simply couldn't afford to drop $5K on the space alone.

A second consideration was that the food and drink bill are generally the biggest chunk of a couple's expenses. Since we could not find an accessible space where we could fully or partially self-cater (no parental backyards, or friends' apartments, or even campgrounds were found), we had to live with the limitations of NYC spaces and food/drink bills. Original iterations of our plan included dinner or brunch for 25, 40 or 60 people. Given our desire for something intimate, we were happy to host a maximum of 60 people.

Restaurant weddings = savings!!

I am big proponent of the restaurant-based wedding reception. Restaurants typically do not charge site fees. In NYC a lot of thought and effort goes into creating specific moods for restaurant interiors - so many restaurants have chic colour schemes, provide their own flowers and linens. Restaurants certainly provide their own tables, chairs, utensils, plates and glasses. They usually also have sounds systems, often partitioned by room, that guests may use. The restaurant industry here is do or die. By most other cities standards every restaurant with space for a celebration serves great food. If you want to go by NYC standards, every restaurant has been reviewed by critics harsher than yourself, more than once. It is easy to find great food and restaurant receptions can cut your wedding costs by 1000s and 1000s of dollars.

Brooklyn: land of tasty food and great spaces for small gatherings

We started our wedding restaurant search in Brooklyn. Before we settled on Bobo (in Manhattan), we had lined up quite a few restaurants that had beautiful spaces, tasty food and reasonable prices in the Borough of Trees. Many were locavore restaurants and all of them had separate spaces that could accomodate a gathering. When we started our search we started with very open minds - our only initial stipulation was that we did not want to buy out a restaurant (on a weekend night in NY that option can cost 10K+). That attitude opened up an entire world of restaurants with unique character and tasty food. Here is a list of places we fell for...starting with these three in Brooklyn.

Aurora

70 Grand street, Brooklyn, NY

510 Broome st NYC, NY (Soho)

Photo credit: Aurora Ristorante

The Deets

Aurora specializes in rustic Italian and American cuisine. I've tried to put my finger on exactly what I love about this restaurant, and I think the best way to describe it is that the food and drink are inventive and homey, but still taste like you are in another country. Everything has homemade-by-an-Italian-chef-having-fun feel to it. There are two locations, one in Soho and one in Williamsburg. The atmosphere of the latter is divinely relaxing and rustic Italian. The garden is open year 'round to boot.

I had the pleasure of hammering out 4 or 5 reception scenarios with Aurora's extremely patient events coordinator. The coordinator and management were very flexible when it came to fulfilling our needs. We discussed everything from a weekday restaurant buy out, to a large dinner for 25 with other patrons permitted to wander in and out.

I really like Aurora Williamsburg for small affairs. When we priced a brunch with wine for 25, the cost fell to a fraction of what we actually spent on our wedding.

It is one of my favourite restaurants in the city and the price was incredible, so why didn't we hold our wedding there? Well, as I mentioned earlier we were really under the gun to hold a wedding in Manhattan and I really preferred the Williamsburg location of the restaurant.

This is a lovely and very special restaurant. I would recommend any couple look into holding an event at either Aurora location.

Pros

Divine rustic Italisn and inspired American food, romantic and yet farmhouse kitchen atmosphere, great outdoor space, very helpful events coordinator

Cons

We were strongly pressured to hold a wedding in Manhattan. I suppose that's okay. I'd rather save this place for our next special diner.

Traif

229 4th street,

Brooklyn, NY (South Williamsburg)

Photo credit: Traif

The Deets

Traif is a small, but powerful restaurant that specializes in breaking all the kosher rules. It was founded by two Jewish chefs who love all things unkosher. The menu is ripe with cheese and meat combinations, pork and shellfish. Bacon touches just about everything. It is singly the most joyful and deliciously devious restaurant I’ve been to in my many years in New York.

H is Jewish and especially loved the cream of bacon soup we had as an amuse bouche. The food is really divine and the restaurant has a very clean design with a very cute back garden. The GM discussed a few scenarios with us for guests. H and I sized the place up as being best suited to either canapés and cocktails or a buffet for maybe 25 guests. That said, the GM outlined many other options. For our budget, this place really would have been perfect for a small gathering of friends and family after a Brooklyn wedding. I must confess, the restaurant had just opened when we visited. The specific requirements for parties are not clear to me - so I strongly recommend contacting the restaurant early in your search process.

Did I mention the staff is lovely and you can see the cooking in action?– all the more reason to visit. We had such a nice time at Traif I would recommend this restaurant for just about anything involving eating and socializing.

Pros

Great food, inventive menu, intimate setting, happy chefs

Cons

We didn’t know if some members of H’s family would be on board. Our loss.

Ici

246 Dekalb Ave Ste A

Brooklyn, NY

Photo credit: Ici

The Deets

Ici is locavore restaurant in Fort Greene with a reputation for very tasty food and a flair for beautiful events. We did not get out to the venue, but it is a beautiful, well reviewed and popular restaurant so I did not want to leave it off this list. The rooms and backyard of this restaurant can accommodate 40-120 people. Brunch and dinner pricing on the regular menu is beyond reasonable and the restaurant has a reputation for very reasonably priced and impeccably produced special events.

Pros

Well reviewed food (everyone raves about it), locavore, can accommodate small-larger parties, pricing. It is very popular. If you are interested in Ici, I’d recommend contacting the events coordinator early.

Cons

We were under the gun to hold a reception in Manhattan. This restaurant would be great for anyone without that restriction or with more of a backbone than I had at the time.

Happy searching.

Today's low cost distraction: Google's Search Page Pic

....is a television playing Lucille Ball clips - a few classics and few I haven't seen before. It is adorable. You can flip channels and turn the sound on and off. Click the channel dial enough times and the animation leads you to a page dedicated to events celebrating Lucy's 100th birthday.

It isn't a night out, but it's a super cute five minute break from Saturday morning chores. Drop by the Google page before midnight tomorrow to check it out.

S&P downgrades US bond, but Adele is going country....so stay calm

I am iterating a constant stream of four lettered words right now. M#$%^# F#$%^r.

Well, at least my vocabulary has grown.

On a related note, it would seem to me that this unequivocably one of the worst things to happen to global finance and especially the little guy in the last 70 years. Millions to billions of people will wake up Monday to mutilated retirement savings and 401ks. People might lose their homes and people will definitely lose their livelihoods. Why the hell do I care that Adele wants to take up country music? CNN, yeeesh...get with it.

I hadn't intended for this blog to focus on global finance. I really just wanted to chat budget and pretty things and how to deal with bad bosses and low cost everything.

I don't think anyone needs to me to remind them of what most people can plainly see. We are still in tough times. I think a lot of us knew that these times were a lot tougher than we were led to believe.

That said, I felt it would be remiss if I didn't post the downgrade here....if not just as a reminder of what happens when someone thinks you can't pay the interest on your debt.

Market volatility: holy s$^% snacks

I'm trying to figure out of this was a joke. Above is a screen shot of two weeks of Dow data taken after market close today. Note how the blue line dives so far after July 29th, it actually dives off the chart.

Obviously this pic isn't accurate, because the market wasn't that volatile on July 29th. Since August 2nd, a lot of panic has generated. I guess it's a combination of things - the Euro debt (Italy in particular has experienced some insane market shaping happenings in the last 24 hours, including elected officials busting into rating agency offices and tossing the places around), the U.S. debt ceiling fight, the growth report have each triggered panic.....and panic, triggers more panic which leads to these extreme up and downs. It might be market contraction. It might be insanity. One thing is for sure, volatlity like this is not good for you or me.


I'm trying to find some deeper lesson in this insanity. I'm trying to remember how last July and August felt. The market dove back then, and people panicked. H's firm reduced hour allowances and started laying people off. I know things are worse now. I'm deciding how much of me I'm willing to give up to worry. I guess there is just something about gettin a lip split by the worst market crash in 70 years that makes this current contraction 3 years later seem like a slap across the face and drunken joke at the same time.

I'll be on the job market in a few months. H and I are down to one income now. All I can do is try to stick to our budget, reduce our debt, keep an eye on our stock holdings and wait this out. I'm pretty confident that the companies I've put money in will be okay in the end. That said, in the market can stay volatile longer than any company can stay liquid.

Pop up Chapel NYC: sweetest sentiment the wedding industry has produced

Say what you will about The Knot and the wedding industry as a whole, when they backed the work of 5 non-wedding industry and fantastic people to hold LGBT weddings for free at Merchant's Gate in Central Park - no matter what the reasons - they did a good thing.

Sure, The Knot gets publicity - but they and many other wedding industry people provided cash and gifts in kind for a bunch of lesbian, gay and bi couples to marry. This might not sound like much, but consider that after the legislation was passed this June venues in the city start to book up - and couples who have waited years for the right to marry were booked out entirely.

The Pop-up Chapel project was the brain child of 5 everyday people - just like you and me - software developer, an editor, two writers and a director. They saw the window open for lesbian and gay couples to marry and decided to do something fundamentally loving and kind for 48 strangers. The Pop-up Chapel project held customized weddings for 24 couples on July 30th. Couples had a choice of two beautiful pop-up chapels (designed by fancy architect people), and were treated to hair/make-up, flower design, music, cupcakes, professional photography, and officiants along with discounted celebration sites. Amazing. Check out the pics here.

Many vendors jumped on board, but all additional donations were directed to Sylvia's Place, an emergency homeless shelter for LGBTQI youth (I'm actually having trouble finding a url for Sylvia's Place. I'm working on it. I'll post it when I find it).

All told, a good deed indeed. My sincerest hope is that it inspires other people to assist engaged LGBT couples who can't find a venue while the backlog of loving couples is resolved.