How a Researcher Preparing to Move to the Midwest Does Money

Shannon (not her real name) is a 27-year-old researcher for the School District of Philadelphia.

So, Shannon, tell us a bit about your finances.

Okay! So I just finished with grad school in December 2014, and for the majority of my time there, I was living off of a stipend. The stipend was $1500/month when I started in 2009 and then went up a few hundred over the years.

Most of my time in grad school I supplemented that stipend in various ways, and then for my last year and a half of grad school (during which I was writing my dissertation) I was working full time in Institutional Research. I was making $62,000 then, which seemed HUGE.

After I finished my dissertation in December, I started at the school district, where I currently make $82,000. This seems REALLY HUGE to me. Then in August I’m going to be starting as an Assistant Professor at a mid-sized Midwest school and will go back down to $62K, but with hopefully lower living costs.

So its been really interesting to move pretty drastically through income levels in a short period of time.

I have so many questions about this. First of all, your grad stipend! When I went to grad school in 2005–2008, my grad stipend was around $625 a month. How did your program feel about your supplementing your income? I think mine thought it was déclassé that I was supplementing with temp office work.

So a couple of things:

A. I never advertised the fact that I was also working on the side. I, like, didn’t actively hide it, but I definitely didn’t talk about it, especially not to my advisor (and I don’t know if I was being paranoid, but I suspect not). My electing to work would not have been treated as “valuable experience in addition to school.”

B. I was working in my field, so I think I was lucky because I’m in education and I went to school outside of DC so it was easy to find high paying jobs in my field that also connected to my grad school work.

I worked for a non-profit as a research assistant, I worked as a (paid) intern at an educational policy place, but then for three years I had the best paid (and most enjoyable) job, which was an Education Director for two afterschool programs. Those paid around $7K a year, and that really helped me out.

I will say my stipend was for 9.5 months (that’s what they don’t tell you!) so I remember every year freaking out about how I was going to finance the summer, and every year my advisor being shocked that I would take a summer job instead of focusing on writing.

I took the summer job too! It’s like, come on, we need the money! Okay, now that we’ve got GRAD SCHOOL COMMISERATION out of the way, let’s talk about the big changes in your finances.


So you went from grad student income (plus a little extra) to $62K when you started working full-time during your dissertation year, correct?

Yes. So during grad school I worked at a part time job first, and then they were like, “come work full time” and so I did while writing my dissertation, which was a bit miserable, but my boss was so supportive and understanding.

I made $62K, which felt like a lot to me, but I later learned/figured out (ironic, my being a researcher and all) that I was grossly underpaid. It was a stat job and those tend to be better paid, and the reason my boss was so nice and flexible about accommodating my dissertation data collection, etc., was because she was really underpaying me.

I found this out after I resigned. My boss told me. I still appreciate her being flexible, but I also took that as a lesson. If I’m ever a boss, I hope I pay people what they’re worth, regardless of how cheap I can get them, because in retrospect that really colors my perception of my relationship with my boss (who I was really close with).

Does that make sense?

Oh, absolutely.

So when you went from “grad student broke” to $62K and then to $82K, how did your approach to spending and saving money change? Did it change at $62K and at $82K?

Yep, those were the mile markers. I wasn’t very strategic about it at all, because when I was having those increases there was so much else going on that I don’t feel like I’ve gotten to “live” at any of those income levels.

When I was at $62, for example, I was still living in the same place that I lived as a grad student, which was literally in a basement with no kitchen. Like, a large-size dorm fridge.

At one point it rained, and there was mold in one of the rooms, and I just closed the door… because I was writing my dissertation and couldn’t deal with moving or de-molding. My landlord was like “I’m sure it’s fine,” and I couldn’t deal with following up on that.

Also, as a consequence of working full time and finishing grad school, I didn’t have any entertainment budget. But what I did do was eat out for literally every meal, because I had no functional kitchen, and even if I did I’m not the cooking type (though I am trying to work on it).

My thing was: All I have to do is finish grad school, and if that meant I got to eat at Chipotle for every meal, that was fine. #TreatYourself

So I spent a lot of money on food, but otherwise I saved a nice chunk without really meaning to (although at that time i was in a long distance relationship and spent a lot of money on travel and the maintenance of that).

Now that I’m at $82K, because Philadelphia ended up being a shorter term thing due to me getting the Midwest job, I’m actually living with my parents until I move. (They’re amazing. It’s the dream.)

So I spend no money on rent, but I’ve had a lot of incidentals come up over the last few months (dentist, car, things like that). Still, I’ve been able to save a lot of money, which is really helpful, because obviously I didn’t save any money the whole time I was in grad school.

You made it through grad school without debt though, right?


That’s almost as good as saving! That’s like saving negative money!

I had small debt coming out of undergrad, and I paid that off during grad school, which I was really proud of. But it was tiny — only $12,000 — so it was negligible compared to what other people had.

I feel really lucky, but I really can’t take credit for lack of indebtedness. My parents paid for almost my whole college education, and then in grad school I wouldn’t have/couldn’t have gone unless I had a stipend/tuition remission.

So yeah, I really like that it worked out, and actually looking back on it I’m horrified about what could have happened, like a medical emergency or something, that I would have had no savings for at the time.

And I dont know how people who have kids and families, or people who aren’t young and healthy, do it.

What is your current savings/retirement plan? Do you have a 401(k) or 403(b)? An IRA?

Oh no! I was hoping you wouldn’t ask because I’m embarrassed. I have a 401(k) that has about $10K in it, and money in a pension fund tied to the school district with a couple thousand. Maybe $3,000. I don’t even know how to check that, to be honest.

I haven’t really been putting away as much as I should, because all the jobs I’ve had have felt like shorter stints, so I need to transfer all of that money over into a hopefully more permanent retirement account.

I’ve always said that I would (will!) save more aggressively when I have a permanent long term job and my my long term financial situation is clear (which is often what people with low retirement savings say), but there you have it.

Also, I love my job and research and would be okay working forever, but I obviously won’t feel that way necessarily when I’m 65.

I want to jump back to what you said about not living how you think a person earning $62K should live. I’m finding that in Seattle, for example, a person earning $60K may still end up in a microapartment. What did you think your $62K lifestyle would be (or should have been)?

I remember right when I started making $62K, I expected things to be radically different, and all of a sudden to have untold wealth.

But I looked it up, and I was earning slightly above the median (median salaries are high in Maryland). So none of the radically different things happened.

My take-home was about $3,000 a month, which was almost double my grad stipend, but the kind of semi-decent apts I wanted had rent that was like $1,500. That was the cheap-but-nice rent, and it was 50 percent of my takehome.

Right, that’s about what semi-decent apartments are here too.

I was paying $650 (amazing!) to live in my basement with all utilities included. So, I mean, just going from $650 to $1,500 plus utilities was not something I could stomach.

Even at $82K, when I was looking for apartments in Philly, there’s obviously a higher cost of living but I was expecting to be able to get a really nice apartment right downtown. When I looked at prices, it was expensive to get really small places.

So, I mean, some of this is a function of my having no sense of what rents are for normal places. I lived with roommates when I first got to grad school, which is a big money saver but I wasn’t interested in doing that anymore.

On the one hand, I’m not thrilled about the move to the Midwest because it feels so far from Philly and the East Coast, but also I’m in education and those jobs are not mega-paid, so the Midwest is really appealing. Out there I can have a really nice quality of life and not be spending 50 percent of my salary on rent.

So I don’t want to complain. I’m definitely SO WELL OFF compared to lots of people, and I can afford everything I need, and a lot of the things I want. But I still worry about money, and I feel like I don’t have enough, and need to earn more to feel comfortable.

And since I don’t know of a clear way to make more, I am going somewhere where the same amount hopefully buys more.

YES. THIS. This is my life now. You are my life twin.

So with that in mind, what advice do you have for Billfold readers?

Financial wise, I think the smart thing is to keep fixed costs low. Like the anti-Frappuccino theory. Frappuccinos are important and they make you happy. It’s the the recurring, big ticket items that eat up all your money, e.g. rent.

And grad school wise, academia is so rough. This is a bit tangential, but what I did was simultaneously apply to academic and non-academic jobs. That won’t work for everyone, but I found it really relieving to have backups. I wasn’t sure if I was going to get an academic job, and outside of academia there are a lot more opportunities both financially and geographically.

I guess that’s not really advice; those are just thoughts.

Thoughts are great!

Yeah, I mean, I still struggle with the decision to go academia vs not, so I don’t know if I have any advice to give.

So… just the first part. Have your Frappuccinos!

Photo credit: Jamesy Pena

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