I have the book smarts down... now onto the money.
August 25, 2010 1:02 PM Subscribe
How should I best manage my graduate school stipend?
As part of my PhD funding, I have a 9-month stipend that's paid to me in two lump sums a year, once at the beginning of each semester. I'm okay with the amount of money they're paying me, but because I'm used to a semi-monthly paycheck, the idea of budgeting out a big lump of money for 4-month periods is a little scary. Do you have any tips or tricks? I have a savings account (ING), a checking account (Bank of America, but I might change it soon), and a Mint.com account at my disposal.
If it's relevant, I live in New York City and have a normal single 20-something person's lifestyle (nothing extravagant, but having an entertainment budget is important to me).
As part of my PhD funding, I have a 9-month stipend that's paid to me in two lump sums a year, once at the beginning of each semester. I'm okay with the amount of money they're paying me, but because I'm used to a semi-monthly paycheck, the idea of budgeting out a big lump of money for 4-month periods is a little scary. Do you have any tips or tricks? I have a savings account (ING), a checking account (Bank of America, but I might change it soon), and a Mint.com account at my disposal.
If it's relevant, I live in New York City and have a normal single 20-something person's lifestyle (nothing extravagant, but having an entertainment budget is important to me).
I agree, pay for all of something now, or at least as much as you can afford with the stipend money. It's great to not have to worry about things.
posted by theichibun at 1:16 PM on August 25, 2010
posted by theichibun at 1:16 PM on August 25, 2010
Well, TheBones said the two things I was gonna say, dangit.
But yeah, think about your recurring expenses and see whether the people you'd be paying would be willing to get all of it at once. They might even be willing to hack a few points off the total.
posted by Etrigan at 1:16 PM on August 25, 2010
But yeah, think about your recurring expenses and see whether the people you'd be paying would be willing to get all of it at once. They might even be willing to hack a few points off the total.
posted by Etrigan at 1:16 PM on August 25, 2010
Best answer: 2nding automatic transfer -- just divide your lump sum into as many "paychecks" as you want (say, if you've got 4 months, and you want semi-monthly, then divide your lump sum by 8) then schedule that amount to be transferred from savings to checking twice a month (or whatever). Then just act as if you are getting regular "paychecks" and plan accordingly.
posted by rabbitrabbit at 1:18 PM on August 25, 2010
posted by rabbitrabbit at 1:18 PM on August 25, 2010
Please check on taxes- a good friend of mine got screwed because of the same sort of situation. They didn't take out taxes, he didn't know, ended up having to pay taxes on a 30k salary- oof.
posted by TheBones at 1:19 PM on August 25, 2010
posted by TheBones at 1:19 PM on August 25, 2010
Best answer: Agreeing with everyone else.
As an additional point, you can have multiple ING Direct savings accounts. So if you wanted to maintain your current savings account for whatever purpose, you could set up an additional one and call it "Future Paycheck" and keep your stipend and only your stipend there, before paying yourself.
posted by teragram at 1:22 PM on August 25, 2010
As an additional point, you can have multiple ING Direct savings accounts. So if you wanted to maintain your current savings account for whatever purpose, you could set up an additional one and call it "Future Paycheck" and keep your stipend and only your stipend there, before paying yourself.
posted by teragram at 1:22 PM on August 25, 2010
For the taxes, you may need to make quarterly payments.
posted by SandiBeech at 1:24 PM on August 25, 2010
posted by SandiBeech at 1:24 PM on August 25, 2010
Best answer: I'm a graduate student in a similar situation.
I have a budget spreadsheet which gives me month-end "money in checking" goals for each month, accounting both for my irregular income and any irregular expenses (e.g., student fees, car insurance, etc.)
The columns look like this:
Period Begins / Period Ends / Income in Period / Source / Monthly Bills / Irregular Expenses / Amount / Spending Money / End of Period in Checking.
"Spending Money" is basically (Annual Income - (Total Annual Fixed Expenses)) / 12.
That makes it a zero-sum system -- any savings have to go in an expense column, for instance.
So for instance, I could have September 1, 2010 / September 30, 2010 / $10,000 / Stipend / -$800 / -$250 (student fees) -$100 (savings) / -$666 / $8184.
And so I know, during September, if I'm getting down towards $8184 I should cool it.
(All numbers have been changed to protect the innocent.)
***
One trick is to put the bulk of your money in a savings account, and pay it out to yourself over the period it's for.
posted by endless_forms at 1:26 PM on August 25, 2010
I have a budget spreadsheet which gives me month-end "money in checking" goals for each month, accounting both for my irregular income and any irregular expenses (e.g., student fees, car insurance, etc.)
The columns look like this:
Period Begins / Period Ends / Income in Period / Source / Monthly Bills / Irregular Expenses / Amount / Spending Money / End of Period in Checking.
"Spending Money" is basically (Annual Income - (Total Annual Fixed Expenses)) / 12.
That makes it a zero-sum system -- any savings have to go in an expense column, for instance.
So for instance, I could have September 1, 2010 / September 30, 2010 / $10,000 / Stipend / -$800 / -$250 (student fees) -$100 (savings) / -$666 / $8184.
And so I know, during September, if I'm getting down towards $8184 I should cool it.
(All numbers have been changed to protect the innocent.)
***
One trick is to put the bulk of your money in a savings account, and pay it out to yourself over the period it's for.
posted by endless_forms at 1:26 PM on August 25, 2010
Yes, check on taxes. From my own once-per-quarter stipend experience, you will need to make estimated tax payments.
posted by Johnny Assay at 1:58 PM on August 25, 2010
posted by Johnny Assay at 1:58 PM on August 25, 2010
My process was:
1. DD directly to savings
2. Calculate tax burden for the year
3. Calculate (total yearly stipend - tax burden)/12
4. Transferred that amount to my checking account each month
You'll probably want to do a dry run of taxes now, then re-calculate and re-adjust when the 2009 tax forms are out to account for changes in the tax code from year-to-year.
Yes, it sucked living on a rationed grad student stipend, but it worked. It would have sucked far, far more to run out of money in the middle of the summer (while I was excavating in the field) when our first checks didn't arrive until September 30th.
posted by The Michael The at 2:03 PM on August 25, 2010
1. DD directly to savings
2. Calculate tax burden for the year
3. Calculate (total yearly stipend - tax burden)/12
4. Transferred that amount to my checking account each month
You'll probably want to do a dry run of taxes now, then re-calculate and re-adjust when the 2009 tax forms are out to account for changes in the tax code from year-to-year.
Yes, it sucked living on a rationed grad student stipend, but it worked. It would have sucked far, far more to run out of money in the middle of the summer (while I was excavating in the field) when our first checks didn't arrive until September 30th.
posted by The Michael The at 2:03 PM on August 25, 2010
These are all great ideas. Another option might be to take the money to Vegas and double it playing the slots. Can't miss.
posted by WhiteWhale at 2:42 PM on August 25, 2010
posted by WhiteWhale at 2:42 PM on August 25, 2010
You'll probably want to do a dry run of taxes now, then re-calculate and re-adjust when the 2009 tax forms are out to account for changes in the tax code from year-to-year.
Just wanted to point out that I never filed quarterly estimated tax payments and the IRS never seemed to have a problem with me. But, I also stayed on top of things to make sure I was never short at tax time.
posted by The Michael The at 3:18 PM on August 25, 2010
Just wanted to point out that I never filed quarterly estimated tax payments and the IRS never seemed to have a problem with me. But, I also stayed on top of things to make sure I was never short at tax time.
posted by The Michael The at 3:18 PM on August 25, 2010
As teragram says, ING allows multiple savings accounts. Why not set up one for each month ("January paycheck", "February Paycheck" etc), divide the stipend into them equally, and then at the beginning of the month, transfer that amount into your checking account.
posted by media_itoku at 5:08 PM on August 25, 2010
posted by media_itoku at 5:08 PM on August 25, 2010
Good suggestions thus far. A few more random ones off the top of my head from graduate school:
Buy in bulk. It's usually harder for people, because they have a biweekly stream rather than lump sums. The examples I usually give here are cell phones and car insurance.
Another, riskier tactic is to get a cash-back no-annual-fee credit card. You can rack up charges on the card, and pay the balance in full for no finance charges. You get an effectively free month long loan, build credit, and get a bit of cash back. The danger here is when you use it to finance a large bill, or pay more attention to your credit limit than your income. Hint: income affects your ability to repay, not the credit limit.
The other piece of advice I'll offer is to ask some more senior PhD candidates in your dept what they do, and what they wish they had known about the process their first year.
posted by pwnguin at 9:43 PM on August 25, 2010
Buy in bulk. It's usually harder for people, because they have a biweekly stream rather than lump sums. The examples I usually give here are cell phones and car insurance.
Another, riskier tactic is to get a cash-back no-annual-fee credit card. You can rack up charges on the card, and pay the balance in full for no finance charges. You get an effectively free month long loan, build credit, and get a bit of cash back. The danger here is when you use it to finance a large bill, or pay more attention to your credit limit than your income. Hint: income affects your ability to repay, not the credit limit.
The other piece of advice I'll offer is to ask some more senior PhD candidates in your dept what they do, and what they wish they had known about the process their first year.
posted by pwnguin at 9:43 PM on August 25, 2010
Response by poster: Transferring monthly "paychecks" is a great and simple idea. I'll do that. endless_forms (eponysterical?), I also like your spreadsheet idea-- I might do that as well, for peace of mind.
(And I won't forget about taxes-- my orientation starts tomorrow, and I'm planning on being thoroughly obnoxious with my tax questions)
posted by oinopaponton at 10:20 AM on August 30, 2010
(And I won't forget about taxes-- my orientation starts tomorrow, and I'm planning on being thoroughly obnoxious with my tax questions)
posted by oinopaponton at 10:20 AM on August 30, 2010
This thread is closed to new comments.
You could also ask to pay your rent for the next semester in 1 lump sum so you don't have to worry so much about finances.
posted by TheBones at 1:11 PM on August 25, 2010