Graduate students sometimes have a difficult time while pursuing advanced degrees. This is considering that on top of conducting high quality research, they also have to apply for grants to ensure funding. This period has a steep learning curve, both academically and financially. As a graduate student, you learn how to create budgets for grant applications to demonstrate how the money would be allocated. However, it can be difficult to translate those skills into your own finances. So, as a former banker and a current graduate student, what do I recommend to begin your bright financial future? Just continue reading.
Start tracking your spending
Print out your last 3 bank statements and look at your spending habits. Calculate how much you are spending on food, subscriptions, going out, etc. A few dollars here and there do not seem like a lot but when it is added all up it can be shocking.
I used to tell my clients – If you show me your statements, I will tell you what you find important.
Create a budget
Create a budget. Write out your income, your fixed expenses, and your non-fixed expenses. Write it out on a pen and paper, do it on an excel spreadsheet. Do what makes you feel comfortable but do it. Building and keeping a budget is the first step to financial literacy and it is a skill that you can keep using beyond graduate school and in your own academic career.
Create some goals
Write them down and put them somewhere you can see it. For me, I had it on the lock screen of my phone, I saw it every morning when I went to check my phone and I knew what I was striving towards. When figuring out your financial goals or how to pay off your of your debt, think about how you want to do it. You can read more about the methods to pay off debt here.
Create a meal-plan
There are many facets to creating a meal-plan and it can be one of the best ways to cut your grocery bill. Going out to restaurants regularly can wreck your budget, especially if you are on a stipend. Your personalized meal plan does allow you to get creative and you can learn how to make your favorite foods at home. Why spend $16 USD on an Eggs Benedict when you can make the same meal at home for the equivalent of $2 USD. Remember, cooking is a great skill that will carry you through life.
Build your emergency fund
According to a 2018 survey conducted by the Federal Reserve, many Americans would not be able to cover a $400 emergency. So, building an emergency fund that will cover anything that happens under ‘Murphy’s Law’ would greatly help your overall budget and your stress levels. Essentially it can be a saving grace.
Get a side-hustle
There are two ways to free up money: spend less or earn more. Most people forget that side of the equation and it tends to be a lot easier than cutting down an already bare-bones-budget. We live in a gig-economy, where most jobs allow you to pick your own hours, which can be great for a student. A side-hustle allows you to earn some more money and helps you build up that emergency fund quicker!
If you need an idea, here is a post that will give you some.
Build your net worth through investing or saving
When it comes to saving for your future the best time to start was yesterday, the second best is today. In some cases, all a graduate student can do is keep their head above water, financially speaking, but it is possible to start building their wealth. The best way is to prioritize saving, investing, and/or paying down debt. Many investment and bank accounts will allow you to set an amount to transfer to save or invest on a regular basis. Do not let the extra money from a side-hustle or from cutting down expenses disappear, try and make it work for you. You can save it in a high-yield savings account, an investment vehicle, and/or pay down your loans. If you are looking to invest, you can open a free account through Robinhood or through Acorns. Read more about these here
After doing all that, remember to keep learning about how to build your net worth. Just sift through a couple of articles on Richful Thinker to get started. Comment below, or contact me if you have any questions.