A Newbie’s guide to finances as an MS student
Hi everyone. It’s that time of year again when a ton of you are in final prep mode before setting off on your MS journey. It’s no doubt an extremely exciting time, but can bring about it a lot of stress and worry, both for you and your parents. One of the biggest worries people have is finances. Now I’ll assume here that if you’re reading this, you’re either funded, or have some plan for funding your time in grad school in the US. Three years ago, I was in a similar state of mind, worried about how I’d get through my time in the US without losing my mind over money matters. It really is daunting when you pull out the calculator or do the math in your head to convert Rupees to Dollars. So I’m penning down a guide to help you guys with your first few steps on managing your own finances in the US. Let me know what you think, and if you feel I’ve missed anything.
1.Whether you’re funded or not, financial management is crucial.
I remember when I first landed in the US, finances were a constant worry. I didn’t have a source of funding for a month, and I was literally freaking out over every dollar I spent trying to convert it into rupees. On the other hand, once I got a quarter time(10 hr) assistantship and a stipend of about $800 a month, I was estatic. I ended up spending quite a bit, and had more debt than I was earning. This didn’t get much better after I got into my PhD program and my earning tripled. That made me realize that good financial management is a habit not dependent on your income. No matter if you earn on an hourly job or get a nice comfy paycheck from your assistantship, managing your income is a VERY important habit you need to develop in the US. So whether you’re depending on your parents, or you now have a fatter paycheck, the same rules apply.
2.Know your priorities.
There is nothing more important than priorities when it comes to managing the cash in your bank account. And I’ll get right to it. Your health is the MOST IMPORTANT priority in the US. Forget about clothes, beer and vacations, if you’re not healthy, your investment in higher education is a complete waste. Your first priority for the money in your bank account goes towards maintaining a healthy lifestyle. Eat good food, exercise and don’t skimp on visiting the doctor when you need it. An example of this would be getting your groceries from a well reputed grocery store, as opposed to searching Dollar Tree (for those who don’t know, it’s a store where everything is $1) for cheap canned food or rummaging the isles of Walmart for the lowest price. Also, sign up for extracurricular clubs on campus, even if they have a small fee. It will ensure you have something to take your mind off your work. Get your furniture from garage sales or thrift stores if you have to, don’t buy that new iPhone that catches your eye, or the 10 year old car your senior is selling for a few thousand $$$. Instead, channel that extra money into keeping healthy and fit.
3.Cook meals at home, as often as you can.
Looking back, eating out was the single largest expense I have over the past few months. If you aren’t careful, that figure can creep well past $200. Often students cite busy work hours and a lack of time as a reason to eat out. However, with a little time management, you can manage to prep most meals at home. A rule of thumb is to cook in bulk on weekends, and have roommates that share similar dietary preferences. Pasta’s and pies are easy to make. Indian food is considerably more time consuming.
Eating out not only drains your finances but also takes a toll on your health. Stay far away from fast food chains like Arby’s, Wendy’s, Burger King or McDonalds. The food here is full of unhealthy calories and will only get you sick. If you do plan to eat out occasionally, pick a good restaurant.
4.That on-campus job might be tempting, but don’t let a few $ get in the way of your main goal.
Let me be crystal clear. Your goal as a grad student is to graduate with a good GPA, enhance your knowledge and lay a good foundation for your career. Working in a tiring on-campus job to make a few $ isn’t one of them. I see a lot of students, especially from India, working at restaurants on campus and getting burnt out at the end of the day. Sure they make more money than the guy who isn’t working and is feeding off his educational loan, but he gets so much more time to study, and also get in some time for extracurricular stuff, which is really important in Grad school. That $800 you earn after 10 hours of work a week could be better off going as time invested studying or researching on areas of future work interest. It pays off, trust me.
5.The Credit card debt trap.
Ok, I’m going to bet that most of you have never owned a credit card prior to coming to the US. While I do admit that credit cards are awesome and a safer way for making payments than debit cards, it’s easy to believe that your credit limit is actually your spending capacity. Let me blow that myth up for you. A credit card company will happily give you a $4000 limit but put your APR (Annual percent rate a.k.a interest rate) in a discrete corner of your credit card packet. So don’t be shocked when you end up paying $20 or so per month just on interest because you thought you could keep pushing bills on to your credit card and look the other way. Credit card debt can pile up FAST. I’ve been there, and its nerve wracking when it does. Your credit score drops and lenders won’t lend to you when you need loans. Safe rules of thumb with credit cards are: Get a maximum of 3 cards, avoid store cards (TJMaxx and Younkers for example) and try and pay off all or as much balance as you can at the end of the month.
6.Keep a cash buffer in your bank account for a rainy day.
Your car breaks down, you hurt your foot playing soccer or you need a wisdom tooth pulled out. But you’ve spent all your paycheck on bills and rent. A thumb rule is always having a sum of money that you don’t go below no matter what, unless it’s an emergency. That way, when things go sour, you have a place to turn to.
So that's all I could think of right now. Remember, your education is an investment, and anything you spend now for a greater good can be easily recovered once you bag a good job. Keep your eye on the target and have a great MS experience
Cheers,
Irvin
Tagging @[Edulix_Editor], if you like the post, could you sticky it?
Hi everyone. It’s that time of year again when a ton of you are in final prep mode before setting off on your MS journey. It’s no doubt an extremely exciting time, but can bring about it a lot of stress and worry, both for you and your parents. One of the biggest worries people have is finances. Now I’ll assume here that if you’re reading this, you’re either funded, or have some plan for funding your time in grad school in the US. Three years ago, I was in a similar state of mind, worried about how I’d get through my time in the US without losing my mind over money matters. It really is daunting when you pull out the calculator or do the math in your head to convert Rupees to Dollars. So I’m penning down a guide to help you guys with your first few steps on managing your own finances in the US. Let me know what you think, and if you feel I’ve missed anything.
1.Whether you’re funded or not, financial management is crucial.
I remember when I first landed in the US, finances were a constant worry. I didn’t have a source of funding for a month, and I was literally freaking out over every dollar I spent trying to convert it into rupees. On the other hand, once I got a quarter time(10 hr) assistantship and a stipend of about $800 a month, I was estatic. I ended up spending quite a bit, and had more debt than I was earning. This didn’t get much better after I got into my PhD program and my earning tripled. That made me realize that good financial management is a habit not dependent on your income. No matter if you earn on an hourly job or get a nice comfy paycheck from your assistantship, managing your income is a VERY important habit you need to develop in the US. So whether you’re depending on your parents, or you now have a fatter paycheck, the same rules apply.
2.Know your priorities.
There is nothing more important than priorities when it comes to managing the cash in your bank account. And I’ll get right to it. Your health is the MOST IMPORTANT priority in the US. Forget about clothes, beer and vacations, if you’re not healthy, your investment in higher education is a complete waste. Your first priority for the money in your bank account goes towards maintaining a healthy lifestyle. Eat good food, exercise and don’t skimp on visiting the doctor when you need it. An example of this would be getting your groceries from a well reputed grocery store, as opposed to searching Dollar Tree (for those who don’t know, it’s a store where everything is $1) for cheap canned food or rummaging the isles of Walmart for the lowest price. Also, sign up for extracurricular clubs on campus, even if they have a small fee. It will ensure you have something to take your mind off your work. Get your furniture from garage sales or thrift stores if you have to, don’t buy that new iPhone that catches your eye, or the 10 year old car your senior is selling for a few thousand $$$. Instead, channel that extra money into keeping healthy and fit.
3.Cook meals at home, as often as you can.
Looking back, eating out was the single largest expense I have over the past few months. If you aren’t careful, that figure can creep well past $200. Often students cite busy work hours and a lack of time as a reason to eat out. However, with a little time management, you can manage to prep most meals at home. A rule of thumb is to cook in bulk on weekends, and have roommates that share similar dietary preferences. Pasta’s and pies are easy to make. Indian food is considerably more time consuming.
Eating out not only drains your finances but also takes a toll on your health. Stay far away from fast food chains like Arby’s, Wendy’s, Burger King or McDonalds. The food here is full of unhealthy calories and will only get you sick. If you do plan to eat out occasionally, pick a good restaurant.
4.That on-campus job might be tempting, but don’t let a few $ get in the way of your main goal.
Let me be crystal clear. Your goal as a grad student is to graduate with a good GPA, enhance your knowledge and lay a good foundation for your career. Working in a tiring on-campus job to make a few $ isn’t one of them. I see a lot of students, especially from India, working at restaurants on campus and getting burnt out at the end of the day. Sure they make more money than the guy who isn’t working and is feeding off his educational loan, but he gets so much more time to study, and also get in some time for extracurricular stuff, which is really important in Grad school. That $800 you earn after 10 hours of work a week could be better off going as time invested studying or researching on areas of future work interest. It pays off, trust me.
5.The Credit card debt trap.
Ok, I’m going to bet that most of you have never owned a credit card prior to coming to the US. While I do admit that credit cards are awesome and a safer way for making payments than debit cards, it’s easy to believe that your credit limit is actually your spending capacity. Let me blow that myth up for you. A credit card company will happily give you a $4000 limit but put your APR (Annual percent rate a.k.a interest rate) in a discrete corner of your credit card packet. So don’t be shocked when you end up paying $20 or so per month just on interest because you thought you could keep pushing bills on to your credit card and look the other way. Credit card debt can pile up FAST. I’ve been there, and its nerve wracking when it does. Your credit score drops and lenders won’t lend to you when you need loans. Safe rules of thumb with credit cards are: Get a maximum of 3 cards, avoid store cards (TJMaxx and Younkers for example) and try and pay off all or as much balance as you can at the end of the month.
6.Keep a cash buffer in your bank account for a rainy day.
Your car breaks down, you hurt your foot playing soccer or you need a wisdom tooth pulled out. But you’ve spent all your paycheck on bills and rent. A thumb rule is always having a sum of money that you don’t go below no matter what, unless it’s an emergency. That way, when things go sour, you have a place to turn to.
So that's all I could think of right now. Remember, your education is an investment, and anything you spend now for a greater good can be easily recovered once you bag a good job. Keep your eye on the target and have a great MS experience
Cheers,
Irvin
Tagging @[Edulix_Editor], if you like the post, could you sticky it?