Psycgirl's Guide to Graduate School Scroogedom

When I was accepted into graduate school, I naively believed that my department would give me enough funding to live on. Now don’t get me wrong, I certainly wasn’t expecting to buy a new car or save up enough money for a Caribbean cruise on my stipend, but I will honestly share that I thought my bills would be covered. Technically, I suppose they are. In the sense that it’s not as if I can accuse my department of forcing me to live in a cardboard box somewhere.

However, I was quickly surprised to find out that things I had considered basic necessities might be financial luxuries on my salary. For example, my car insurance after moving to Medium Sized City was pretty expensive. I didn’t have much in terms of savings, as nearly all of it was spent on moving expenses, deposits for my apartment, student fees, parking for school, etc. I quickly found myself living a bit on my credit card every month. I am fortunate to have amazingly supportive parents, who would often allow me to put my groceries on my credit card and then immediately pay that bill for me. At times they would “treat” me to outings with other graduate students in the same manner.

Eventually, however, the expense of graduate school caught up with me. I have a maxed out student line of credit, which has been consistently maxed out since my first year. I also have a nearly maxed out credit card, which has been completely paid off once and then remaxed out. This despite the fact that I consider myself to be pretty frugal and good with money. Eventually, chronic broke-ness turned into bitter cynicism about money and graduate school (And significant cynicism about other students who seem to have more financial freedom than I do.) I have become, if I admit it, a Graduate School Scrooge. My scrooge-dom in fact continues to increase at an alarming rate. It is really fueled by my absolute refusal to use my credit card unless completely necessary. I have ridiculously small amounts of money left over after my bills are paid, groceries are purchased, and gas is put in my car. Currently, my bank account has $19.86 in it. I get paid in fourteen days.

I have learned to be much better with my money than I ever thought I would be (and I thought I was pretty good before!) Here is my guide to Living as a Graduate School Scrooge. I will admit at times I can be a little over the top, or perhaps obnoxiously cheap, but I do so with thousands of dollars of debt fueling me. I’ve split this post into parts, due to length, so stay tuned for the rest this week.

Initial Budgeting

1. Make a budget If you don't already have a budget, now is the time to figure one out. (If you don't regularly balance your checkbook, slap yourself upside the head and make that your first step.) If you actually sit down and add up all your fixed bills, and then keep track of how much money you spend over the course of, say, a week, you'll probably be surprised. Little things add up. Knowing where your money is going can lead you to decrease spending significantly. After my first year of graduate school I added up how much money I was spending on coffee and bagels on my drive to campus in the morning - it was ridiculous. I can't get up early enough to have those things at home, so I invested in a coffeemaker and toaster for my office.



2. Critically evaluate your budget and eliminate as much fluff as you can.
After two years of being absolutely broke, and increasing frustration with my increasing debt, I sat down and critically evaluated my budget. You need to be in the right mood for this (Specifically: A harsh, angry mood that is inspired by your fear of selling your jewelry for cash.) Although it wasn't easy, I significantly reduced and/or eliminated some costs. At one point I even reverted to dial-up internet service, which was free through MSCU. What I reduced the most was the amount of money budgeted for fun and socializing. This aspect of my budget is now a measly $40. Basically one nice meal out per month, or 2-3 lunches/month with Hamster Guy. I tell myself that I will decline an invitation if need be, but that I will not go over that amount. If I end up spending less in another area than budgeted (e.g., gas money) I can put the extra into my "fun" fund.


3. Tell people you’re a student.
Sometimes just telling people you're a graduate student will get you a break. For example, my vet is aware that I am a graduate student pet-owner, which means he sometimes will give us the reduced rate on vet costs (For example, they'll give estimates that range from low-high and he'll make sure we get the low), probably because he recalls the financial pain of graduate school! Also, when I ask how much something is going to cost and am honest about my financial situation he more honestly tells me what is necessary and what can wait. For example, Cat could use a teeth cleaning, but it has to wait.


4. Pay yourself first, no matter how little it is. Although I have not been able to set up as much savings as EcoGeoFemme recommended (and it is a super good idea) I do pay myself first. This means the very first amount that comes out of my pay check is the amount I have set aside for my financial goals (see next point) and the second amount is the $25 I pay toward my credit card. Even though its easily to think $25/pay check is getting me know where, it does add up to $600/year paid down on my debt. When I am doing my best not to use my credit card, that does get me somewhere. What is more important to me right now is the fact that that tiny amount of money significantly helps to reduce my frequent panic attacks about my credit card debt, because I know I'm making an effort, even if its just symbolic.


5. Set financial goals.
Its much harder to scrimp and save when you don't know what you're saving for. When you have a goal that you want really badly its much easier to say "No thanks" when your friends invite you to a super expensive bar for no reason whatsoever (I'm not saying you should be a big party pooper here - celebrate when you should during graduate school!) or when you decide you really really want a new pair of shoes/CD/insert thing you want here. Amanda at A Lady Scientist recently blogged about how satisfying it was to get pre-approved for their mortgage and how great it made her feel to tell her colleague that saving led to her financial goal. I love that post because I bet Amanda found it much easier to not go out for lunch/dinner/etc knowing that she was saving for a house. I would also bet that Amanda is feeling a very serious sense of accomplishment with that pre-approval!


6. Plan for the “unexpected.”
The "unexpected" for me can be something as simple as shampoo, sadly. Or it can also be something as important as suddenly needing something for my dissertation, a repair to my car, or antibiotics. The point is, no matter how well you plan remember that you can't plan for everything. Having some amount of savings or safety net makes this a lot easier. My safety net is knowing that my family will help me out should my car explode or I need antibiotics, and that I can always use my credit card for a legitimate necessity like that.


7. Train your friends, family, and loved ones to help with your Scroogedom. Training your friends/family/loved ones is multidimensional. It can be as intimate as discussing finances with your partner. Husband is much less anal than I am about money, to the point where if I have my Scrooge goggles on, I can mistakenly see him as a spendthrift (Note: Scroogedom is very relative!) Although Husband is actually very thoughtful with money, reminding each other of our financial goal helps us get past the stress of being broke 95% of the time, stay focused on school, and avoid temptation. For example, Husband really wants a new television because the sound isn't so great on ours anymore and I really want a new dresser. Training people also means that it might be necessary to explain to people (over and over and over) again why you can't join them for dinner at SuperNice restaurant twice in one week or why you can't go on a tropical vacation with them (That is not made up, Husband and I have friends who insist we should put a tropical vacation on our credit card so we can "relax" and "have fun" with them.)
   
   For Husband and I, this has also meant training our family. We are fortunate enough to have one very trainable set of parents (I won't identify whose) who have been very open to training. For example, they have been very amenable to our requests to give us gifts we need for Christmas and other holidays, or to give us cash. We managed to convince them that cash was not offensive to us, but actually what we most needed in our lives right now. Definitely more than we need "stuff." They also understand that we cut back on our gifts we give to them while we are in school. Other parts of our family have been more difficult to train - believing that giving gifts you "need" is boring and not in the spirit of a holiday. (And as a result 80% of their gifts end up getting carted off to the Salvation Army at some point during the year.)

That is part 1 of my Scrooge Plan - being focused on initial budgeting and planning. Other parts of my Scroogedom, like actual spending and dealing with the stress of financial strain, I'll post later this week.

So what do you guys do to help with the budgeting and planning of your finances?