Things I Wish I Had Known As A Graduate Student

I got a lovely email the other day from Life As A Purse, a new personal finance blogger who just wanted to thank me for my blog. It was VERY sweet. =)  (she claims she read like every post over the course of two days, boy do I feel sorry for her if this is true! j/k!)

She is applying for graduate school and wants to get her financial life in order before she goes, which is SO GREAT!

It got me thinking about graduate school and the things that I didn’t know/didn’t WANT to think about while I was there. For me, graduate school is where I got in trouble. I left undergrad with $0 in student loans, $0 in car debt and only about $1,500 in credit card debt. All my debt I acquired in graduate school.

Here are some of the things that I wish I had realized while I was in graduate school:

1) Don’t inflate your lifestyle

This was a big thing for me. I went straight from making about $300/month tutoring  in undergrad to making $1,800/month as a Teaching Assistant in graduate school. For me, this was like making $3,000/month! Or at least, that’s how I SPENT money.

I initially stayed in the same apartment that I had as an undergrad (I didn’t move cities, just changed schools). However, instead of waiting for the less nice, cheaper apartments to move into after my first year or two – I moved into the more expensive nicer apartments. Rather than paying $800/month to share a 2-bedroom apartment I chose to pay $1300/month to share a 2-bedroom apartment in a nicer complex a few months sooner.

2) Learn How To Cook

I was exceptionally blessed in undergrad that I didn’t have to pay for room, board, tuition, books, fees, ect – my entire 4 years of undergrad. So I ate 99% of my meals in the cafeteria because it was free. I didn’t learn to cook, because I didn’t need to. All my meals were prepared for me.

So when I went to graduate school, I ate every meal out because that is what I was used to in undergrad. Sometimes I would cook meals at home, but VERY, VERY rarely. So rarely that I would always have to buy the basics of butter and milk and olive oil, ect. Making it just as expensive as eating out. Which would discourage me all the more.

If I had made my lunch every day or ate dinner at home every night, I would have saved SO much money. Instead I ate breakfast, lunch and dinner out every meal for 5 years – I was outspending my food budget by between $2-300 each month.

3) You can’t afford to not be honest when you date

I had a boyfriend while I was in graduate school for 4.5 years. We started dating when I was in my senior year of college and he was just starting in his job. We were both 20/21 and dirt poor. However, I went to graduate school and started making some cash (not a lot) while he continued to get raises at work.

When we started dating we split meals and things of this nature 50%. However, after 3 years when he was making 3-times my salary and I was starting to feel the pinch of the debt I was creating each month, I couldn’t afford to pay for everything 50% anymore. Mainly because as he got more money he wanted to spend more money, and I couldn’t keep up.

We would have some conversations about this, but we were never on the same page. So instead of ending the relationship or putting my foot down –  I put down the credit card. I should have been more assertive, but instead I got around $5,000 more debt because I wanted to keep up with his lifestyle inflation.

4) Student loan debt is better than credit card debt

I don’t want to advertise that you SHOULD get debt. You shouldn’t if at all possible (see #5). However, as a student, especially if you’re not in the sciences, you may have to take on debt load to get your education. If you have done your budget and can’t figure out how you’ll be able to pay for it, please remember that a SUBSIDIZED student loan is better than an unsubsidized student loan which is FAR FAR FAR better than credit card debt. I would much rather be on this blog telling you that I have $35,000 worth of student loan debt than $16,000 in credit card debt. In the long run it would have saved me money.

5) Do whatever you can to avoid debt

All that I said in #4 considered, if I had known how much my debt was REALLY going to cost me, I would have tried harder to stay within my budget, eaten out less often, not gone so crazy with gifts for other people, lived in a cheaper apartment, taken on more tutoring jobs, not bought such an expensive car, whatever I could have done to stay out of debt. However, I DIDN’T realize the cost. So I spent freely.

My dear friend TMcImmy was able to get paid just as much as I was in graduate school, yet he managed to not get any debt AND to save for an Emergency fund. I should have used him as a model rather than make fun of him for being a monetary stick in the mud. 😉

6) Don’t spend like you’ll have more money tomorrow

One of the most common things you’ll hear in graduate school is: “Well, someday I’ll make more money”

We all fell prey to this. This idea that “someday” we’d have more money to pay for the things that we wanted today.

And sure, I “technically” get paid more now than I did in graduate school. But I’m here to tell you this: Because of the DEBT I accumulated in graduate school – and subsequently the FEES that I’m paying now to pay off that debt – I now bring home LESS money each month now than I did in graduate school.

DON’T count on tomorrow to pay for today, all you’re doing to PROLONGING the period of time that you’ll be poor.

Do yourself a favor and just accept another 5 years of Ramen if that is what it takes. Because then you WILL make more money someday – and you’ll be able to enjoy that money rather than watch it go towards paying for years on the debt you accumulated because you didn’t want to accept that you were poor.

These are the things I can think of now. For those of you who went to graduate school or are in graduate school, what advice do you have for Life As A Purse? What recommendations do you have for her to stay afloat financially in graduate school?

This article was featured in the Carnival of Personal Finance!

12 thoughts on “Things I Wish I Had Known As A Graduate Student

  1. The premium concern of the people at the office of career services is to keep their job. If they are evaluated based on % of employment at six months (a not uncommon metric for law schools, since it impacts their US News ranking significantly, I don’t know about other graduate programs), they will slot you into anything they can, without regard to whether it’s a good fit for you or not. Know what you are looking for coming out of graduate school and do that; don’t be sidetracked into the jobs that are easy to get, even if the money is good. (This is not based so much on my experience as on the experience of friends who went to law school to do public service in one area of the country and ended up in mid-sized firms in another area entirely. Most of them ended up leaving the law within four years.)

  2. I learned to cook in grad school and I think it saved me tons of cash. I started with very basic recipes and moved on from there.

    The other piece of advice I’d give is that there is always some way to make extra money in grad school-tutoring, editing papers/dissertations, helping with research, stipends and bursaries (even if you don’t think you’ll qualify-I did and once they basically divided the amount of money available by applicants, so I got an easy $800).

    I’d also say to try to hang around with like-minded a frugal folks while in school. I recall having lots of fun on the cheap, mainly because none of us had any money to spend.

  3. SS4BC, thank you so much for this wonderful post – I’m really moved, and definitely motivated to follow your advice to the extent that I can. It’s really awesome to hear advice from someone who’s been there.

    @Sarah – Making extra cash definitely sounds like a great idea. How did you get the word out about things you were trying to do on the side (like tutoring, editing papers, etc?) I have a lot of experience tutoring and as a research assistant, but I have no idea about how to tell people that.

    @The Lost Goat – Thanks for your advice as well, I’ll definitely watch out for that!

    1. Most people just put up fliers for the paper editing that I’ve seen.

      I get all my tutoring clients from listing myself on the departments website. Most all departments maintain a tutor list, so just go to the undergrad office/website – and talk to/email the person who compiles the tutor list. I get probably 4-6 emails a week from undergrads who want tutoring. I have to fight them off with sticks! =)

  4. I signed up with student services at my university and signed up to be a tutor-my school paid for a few hours of tutoring per student. Once they were done with their paid hours, they could pay me out of pocket whatever we agreed upon. I also posted on a few websites that connected tutors/editors to students who needed them, and talked to the profs/teaching assistants of courses I knew I could tutor, and gave them my name in case students approached them.

    Good luck in grad school!

  5. I think you gave a lot of good advice, especially item #6 of not spending like you’ll have more money someday. I know many people who took on loans for Grad School. Most did NOT get a better paying job after graduating. I’m not saying that you can’t, but just don’t assume you will.

    Another important point to consider is how long you plan to work. The majority of my female friends ended up as stay-at-home moms and don’t want to return to work if possible. Yes, divorce can happen and it’s great to be prepared. Yes, learning in and of itself is important. However, it’s a huge struggle to pay off student loans on one-income.

  6. I was guilty of #6 my senior year of college. My tuition was covered by scholarships and student loans, and my parents helped out with cheap, rural minnesota college town rent that I would have been spending on room and board had I lived on campus. I worked the summer before and saved up some cash thanks to living off my parents rent, food and utilities that summer while basically working full time.

    The thing is, I didn’t spend as if I had to make that $4-5k last the academic year. I spent as if I’d be making 40-45k a year in June when I graduated. I accumulated credit card debt towards the end of the year and into the early summer. Luckily I was able to pay most of it off my year of working retail in between undergrad and grad school and paid the remainder off over my first two years of grad school.

    Taking student loans as a science grad student is a trickier matter. I say science only because it seems like there’s just no way social science grads can survive without them. I think the best way to do student loans is to set up a sort of trickle system rather than treating it as a lump sum payment. I think most of us would burn through a $5-10k student loan pretty fast, even if that was supposed to last us years. In theory paying off credit cards with student loans is a great idea. In practice for a lot of people it involves charging those cards back up. I suppose most people probably shouldn’t use credit cards except for *true* emergencies in grad school.

  7. I graduated from undergrad and I wish that I did some budgeting back then, instead of living in the mindset that I am just supposed to be poor. I was in a co-op program at my school, and luckily we alternated four months of paid internship with four months of school, so I was able to pay for most of my undergrad with taking out only a small loan from the Canadian government (which was interest free until graduation). Having worked full time for a year and half, I have debated the thought of going back for a Masters, but I definitely want to be smarter with my money now. Thanks for sharing!

  8. Very well said. One thing I wish I had realized going into grad school is that I didn’t NEED the full amount offered for my student loan. My tuition was covered by grant money and money from my graduate assistantship.

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