New Conversation: Personal Finance for PhDs

In September 2024, JPHE Senior Editor Z.W. Taylor spoke with Dr. Emily Roberts. Dr. Roberts' mission is to inspire and empower early-career PhDs to make the most of their finances. She engages with graduate students and postdoctoral scholars through her Personal Finance for PhDs seminars, coaching, and websites, Personal Finance for PhDs and PhD Stipends. She launched Personal Finance for PhDs shortly after completing her PhD defense in the fall of 2014. Taylor and Roberts spoke about personal finance, graduate stipends, and the importance of actively seeking personal finance education throughout graduate school.

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Zach Taylor: Emily, tell me about who you are, what your degree is in, and what you did for your degree. Also, what do you do professionally now?

Dr. Emily Roberts: Absolutely. I'm happy to tell you that, and I'm happy to have this discussion, Zach. I have a Ph.D. in biomedical engineering, which I earned from Duke University. I was there between 2008 and 2014. While in graduate school, living on my stipend, I was highly motivated to figure out how to live well and manage my finances responsibly. This led me to explore personal finance principles for my own benefit.

Over time, I realized that my peers, funded graduate students and postdocs, were also seeking this information but couldn't find resources tailored to their specific financial situations. No one seemed to be addressing the unusual tax implications of fellowships or whether one could contribute to a Roth IRA while on a fellowship. I started investigating these issues for myself and writing about them on a blog I had at the time.

By the end of my degree, I had developed a real passion for this topic, realizing that it wasn't being taught in graduate school. After defending my dissertation, I spent about a year exploring what I wanted to do next. During that time, I started giving financial education seminars for graduate students and realized that was the direction I wanted my career to take, at least for the next phase. So, after about a year of experimenting with different paths, I committed to my business, which I now call Personal Finance for PhDs. I now consider myself a financial educator specializing in helping funded graduate students and postdocs.

Zach Taylor: You briefly mentioned the lack of financial wellness or personal finance education in graduate schools. You and I both have Ph.D.s, and I remember my graduate coursework. There wasn’t a life skills class or a personal finance class. Almost everything was focused on your niche area of research and study. Even during my undergraduate years, personal finance wasn't part of the general education curriculum.

For those reading this internationally, many U.S. institutions have a general education curriculum that students take for about two years, often unrelated to their major. But even as a high school teacher, we didn’t teach personal finance there either. It's a problem throughout the entire educational pipeline.

Emily, one question for you: when you first picked up personal finance knowledge and habits, where did you develop them? Was it from family, friends, or was it your own curiosity?

Dr. Emily Roberts: Yes, I think it was more of my own curiosity. Like you, I never took any courses in personal finance or anything remotely related. When I said earlier that it wasn’t being discussed, I meant not just in educational institutions but also outside of them. It wasn't even a widely discussed topic online. Occasionally, you might find a Reddit thread about it, but it wasn’t commonly addressed.

All through college, my parents financially supported me, which was wonderful. But once I started my post-baccalaureate fellowship, about a year before my Ph.D., I became financially independent. I suddenly had this stipend coming in and thought, "What am I supposed to be doing with this money?"

I’m a responsible person, probably due to being the stereotypical oldest daughter, and I wanted to manage my money correctly. However, I had no formal education in this area. My parents were OK with managing their own money, but they didn’t explicitly teach me or my siblings about budgeting, investing, or frugality—things I needed to know now that I was financially independent.

So, I turned to books. This was back in 2007 or 2008, and I’m an avid reader. I started with personal finance books, including works by David Bach. One of the most influential books for me was Get a Financial Life: Personal Finance in Your 20s and 30s by Beth Kobliner. It was exactly what I needed at that time.

Around 2009, I started reading personal finance blogs as the blogosphere was booming, especially during the Great Recession. There was a growing interest in personal finance and frugality as people were navigating unemployment and the housing market collapse. So, that’s how I got started—first with books, then online as discussions around these topics became more prevalent.

Zach Taylor: Very cool. So much of your path mirrors mine. In high school, I was raised by a single parent. My mom was a teacher, and she supported both of us financially. We struggled, but she managed her money, and I never thought to ask her how she was doing it. She never shared much about it, and I didn’t ask how bills were paid. I just paid for my own things and continued living my life without that knowledge transfer.

When I came up through high school in the early 2000s, social media wasn’t as prevalent. I’m still not a social media person today, but now many of the students I work with get most of their financial wellness information from social media—whether it's from a Dave Ramsey YouTube video, a blog post, or a celebrity ad promoting NerdWallet. They're learning about personal finance through those channels.

For higher education administrators and staff, it’s interesting to think about how students are accessing financial wellness education. Are students exposed to credible, authoritative, and trustworthy resources, like a book from an expert, or are they relying solely on social media posts that pop up in their feed?

Emily, when you work with graduate students, what are the financial issues they typically ask about?

Dr. Emily Roberts: I’ll start by explaining a bit about how I work. My business revenue comes almost entirely from universities, so I don’t work one-on-one with students. I’m a one-to-many teacher and communicator, so I don’t have an intimate view of students' financial lives beyond what they choose to share with me during seminars or presentations.

My clients are typically administrators in graduate schools or postdoc offices. I always ask them, “What are your students or postdocs asking about?” This helps inform the programming we choose together.

Right now, going into the 2024 fall semester, my seminars on budgeting and cash flow management are in high demand. We’ve had high inflation over the past few years, and even though inflation has slowed, prices haven’t gone down. Stipends haven’t generally kept up with this inflation, so students are concerned about their cash flow.

However, the most popular topic remains taxes. This aligns with survey data I’ve seen from the Council of Graduate Schools (COGS), where taxes were the second most requested financial wellness topic. Taxes are a universal pain point, especially since they are particularly confusing for graduate students and postdocs.

Zach Taylor: Totally. One big surprise for me during my graduate school journey was taxes. When I earned my master’s degrees, I was working full-time, paying tuition, and contributing to a Roth IRA and state pension. But when you’re a graduate student on a stipend or assistantship, things get complicated. You may have your tuition waived, which could be taxable, and you might not know whether your stipend has been taxed correctly. In my third year, I received a lump-sum payment due to a scholarship change, which led to a big tax bill at the end of the year.

What advice would you give institutions and administrators about addressing these financial challenges for students?

Dr. Emily Roberts: That’s an interesting way to phrase the question. There are certain things I don’t typically say in university settings, either because it’s not the right environment or because I’m being paid to focus on other things that are immediately helpful to the audience. However, you may remember at the HEFWA conference, not this past year but the one before in 2023, I conducted micro-interviews where I asked attendees about the policy changes they would like to see to improve the financial wellness of funded graduate students and postdocs. I published an episode about it later, and the responses ranged from addressing minor pain points related to university bureaucracy to more significant issues.

For example, in a recent interview on my podcast, I spoke with a graduate student who had to take it upon herself to warn other students about potential pitfalls when transitioning between different funding sources. She explained that students’ health insurance might lapse for a month if they moved from one type of funding to another, and she emphasized the importance of staying on top of things and communicating with the right people at the university to ensure nothing falls through the cracks. Honestly, that kind of responsibility shouldn’t fall on students. The university’s bureaucracy should function well enough to support students and postdocs without them needing to handle such issues.

Overall, graduate students and postdocs should be financially and logistically supported by their institutions so they can focus on learning, professional development, and producing research, which is what they are there to do. If universities don’t offer adequate financial or logistical support, these students and postdocs won’t be able to flourish or produce at the level they’re capable of. So, the question becomes: How can we best support these students? Some of that support should come from behind-the-scenes efforts—ensuring things work smoothly so students don’t have to spend time on it.

Another example you mentioned was the lack of income tax withholding for certain types of stipends and salaries, especially non-W2 fellowship stipends. That’s something universities can change—it’s just a matter of policy. From what I’ve seen, there’s no real reason why universities shouldn’t offer that benefit. For instance, Duke, where I went to school, did offer income tax withholding for fellowship stipends. I’ve also heard of at least one other university doing the same. The reason it’s not offered more widely is likely because it’s not required. Universities don’t feel obligated to do it unless it’s mandated.

Going back to the bigger picture: Are we sufficiently supporting graduate students and postdocs financially so they can thrive during their time in training? I believe the best thing a university can do is provide sufficient pay, adequate benefits, and clarity around what those benefits entail.

In preparation for this conversation, you asked me to compare the U.S. system to financial systems in Europe. One key difference I’ve observed is that in Europe, graduate students and postdocs often have very clear contracts that explicitly outline their benefits. In the U.S., this level of clarity is usually only present if there’s a union in place for graduate students or postdocs. Outside of that context, there’s often not much transparency. For instance, if a student needs to take a medical leave of absence, becomes pregnant, or has a child, or if international students want to take extended time off to deal with visa issues or visit family in their home country, the policies can be unclear and inconsistent. This lack of standardization and clarity increases stress for students, which could be mitigated if universities adopted clearer and more consistent policies.

Zach Taylor: That’s such a great point. I’m thinking back to my own graduate school experience, and I don’t remember signing anything. There was no formal agreement between me and the university. I just hoped to get paid every month and for my tuition to continue being waived. That was the extent of it. Your point about contracts and the need for clarity speaks directly to that.

This situation is even more complicated for students who go directly from earning their bachelor’s degree into graduate school. They might not have the same exposure to the financial system that someone who worked for ten years before returning to school would have. If you’ve worked full-time, you’re socialized into the tax system through W2s, paying taxes, and dealing with other financial realities. But when you go straight from undergrad to graduate school, you don’t have that experience. I’d argue that graduate students should approach their new roles as employees first. They should understand what it means to be paid by an institution and what benefits they’re entitled to. I’m not saying it’s the student’s responsibility to know all the details upfront, but I think if more graduate students understood that they are essentially employees, they would ask the right questions.

Looking back, I wish I had approached graduate school with that mindset. In my second semester, I got into a bad car accident. I was coming back from a conference in the spring of 2017 when a semi hit me and pushed me against the median, totaling my car. I was fine, thankfully, but I started thinking, “Am I going to miss time? How am I going to pay for everything? Do I even have health insurance?” I didn’t know if I had health insurance at the time. It turns out I did, but I had no idea what my benefits were.

Your point about the need for more standardization and clarity in the bureaucracy is so important. It would help graduate students feel more integrated into the larger institution and give them access to the same benefits that regular employees have.

Dr. Emily Roberts: There’s an important asterisk there, though, because in the U.S., we’ve been talking about fellowship funding, and the reality is that some graduate students and postdocs are considered employees, while others aren’t. That distinction can be crucial, even though, from the student's perspective, their role doesn’t seem to change. When I was in graduate school, I transitioned between being a research assistant (an employee position) and being on fellowship, and then back again. From my viewpoint, I was doing the same work as a graduate student the whole time, but behind the scenes, there was an important distinction between being an employee and not being an employee in terms of benefits.

You’re absolutely right—graduate students who have worked full-time before entering graduate school come in with an advantage because they already understand how to ask the right questions and navigate these systems. They notice when things are missing, like defined vacation time or other benefits. But for those who are on fellowships, it can feel like the Wild West. Some universities have standardized policies around how fellows are treated, while others don’t. There’s no labor board intervening because these fellows aren’t classified as employees.

Zach Taylor: That’s a really great point. Even just knowing whether or not you’re an employee and if you’re eligible for benefits can make a huge difference. I wish I had known that when I came in on a fellowship. I had fellowship funding, healthcare, and a small contribution to the state employee retirement system, but beyond that, I wasn’t aware of anything else. It’s really interesting to think about how much of a difference it would make if students came in with that knowledge.

When we were talking about bureaucracy, I kept thinking about orientations, training, and professional development. These topics are always on my mind because we go through so many of them here at USM, and it’s the same at every institution I’ve been a part of—there’s always mandatory training for this or that. I understand that some of it is due to federal or state regulations, but what about graduate student orientation?

I’ve been reflecting on my own experience in preparation for this conversation. I missed my undergraduate orientation because I was sick during the summer, and I was completely lost when I started. I didn’t know where anything was, didn’t know how to log in, and had to go to the financial aid office to make sure my tuition was paid. I wasn’t even sure if I was supposed to be there. That would have been covered during orientation if I had attended.

At least there was an undergraduate orientation. In every graduate program I’ve attended, I don’t recall being invited to any kind of graduate student orientation—especially not one that covered financial wellness, how you’re paid, when you’re paid, whether taxes are withheld, your responsibilities regarding address changes, or what happens if you get married or have children during graduate school.

Have you heard of graduate student orientations that cover these topics? If so, what do they include? And if not, what would you include in a graduate student orientation for new students?

Dr. Emily Roberts: Yes, so the timing of this conversation is interesting because I do know of graduate student orientations that happen near the beginning of the academic year. Duke had one, and I attended. It was held over the course of a week, and there were multiple sessions on different topics. It took place as people were moving to campus and starting classes. So, these types of orientations do exist.

I’ve also been invited to speak at graduate student orientations for some of my university clients. I think orientation is a perfect time to introduce topics related to financial wellness, especially taxes, because this time of year, in early September, aligns with the deadline for the next estimated tax payment. This is always a big push for me—to get universities to educate their graduate students and postdocs on fellowship about taxes, including whether taxes are being withheld and what they can do about it.

It’s the ideal time of year to have these discussions because students are just starting to receive their paychecks, and graduate students—especially postdocs—can come on board at any time during the year. However, you brought up an excellent point about holding these discussions in the months leading up to a student’s start date, perhaps between April 15th and June 1st, after decision day.

That’s the time to talk about finances. For example, students can analyze their stipend and figure out how much they can afford to pay in rent. Is there affordable housing in the area that meets their budget? Should they hold off on purchasing a car until they can determine whether the monthly payment fits into their budget? I was once invited to give a session in May for an incoming class that would be starting in the fall, and I thought it was brilliant. I wish more universities would do this because once students commit to large fixed expenses like housing or a car, it’s difficult to change those decisions. Adjustments take time, money, and research. It’s much better to know upfront whether you can afford these commitments on a graduate student stipend.

We’re often talking about students who come directly from undergrad, and they might not have experience living on a full budget where they’re responsible for all their expenses. These students may not have encountered concepts like the rule of thumb that you should spend about 30% of your income on rent or keep necessary expenses to 50% or less of your net income. I love getting this information in front of students early, especially when I have the chance to speak to programs like McNair, where students are applying to graduate school. I can teach them these principles in the spring, maybe even before they’ve committed to a specific graduate school, and definitely before they’ve signed a lease.

Zach Taylor: Yes, I’m so glad you mentioned that window because even though academic schedules vary slightly around the world, most institutions still operate on a fall and spring semester model. And you’re right—April to June is such an important time, especially when you think about all the major purchases graduate students need to make.

When I moved to Texas, I had to make major car repairs because I knew I’d be commuting in a completely different climate. Moving expenses alone were almost $1,000, and I hadn’t planned for that. The deposit on the apartment I was moving into was two months’ rent, and my roommate—who was another student—was unable to come up with their half of the deposit. So, suddenly I had to pay the entire deposit, which was an emergency expense that came up a month before I was supposed to move and just six weeks before classes started. I also didn’t consider the cost differences between groceries in a major metropolitan area versus the rural part of the state I had previously lived in.

That kind of financial guidance would have been so beneficial to me. Someone could have sat me down and said, “Here’s how much you’ll be earning each month.” I didn’t even know how much my first paycheck would be until it hit my bank account, and I thought, “OK, I think I can make this work.” But I didn’t really understand how my fellowship amount, as stated in my offer letter, would translate into monthly payments. Would I be paid for nine months of the school year? Twelve months? I didn’t know if I even had the option to choose. I just took the money when I could.

Even having someone explain when and how you’ll be paid, how much will be withheld for taxes, and what expenses you should consider before signing a lease would have made a huge difference. Have you bought a car yet? Have you titled your vehicle? Are you considering moving someone else down with you? Have you thought about moving expenses or cost-of-living differences? We’ve had conversations before about how graduate students need to be more proactive in researching not just the institution they want to attend but also the cost of living in that area. It’s crucial to understand what a one-bedroom apartment will cost, how much a gallon of gas is, or the price of a loaf of bread—whatever benchmarks you want to use.

Dr. Emily Roberts: I love that you brought up all of these topics because these are exactly the things I teach when I have the opportunity to speak to incoming graduate students. It’s rare to get this particular audience, but when I do, I love teaching them about topics like investigating their paycheck. How frequently will they be paid? When will the first paycheck arrive? I’ve worked with institutions where students expected to be paid on a specific date—say, September 1st—but because they were on a fellowship, their lump-sum payment didn’t come through until 10 days later. Meanwhile, rent was due on the 1st. That’s a tough 10 days to get through without a paycheck.

These are the little details that students need to be aware of, but what I would really love to see is universities pairing financial education with material financial support. I would love it if a university hosted a webinar in the spring for incoming graduate students, where they talk about the cost of living in the area, what they can expect from the housing market, and how to analyze their paycheck. On top of that, I’d love to see universities offering moving bonuses—$2,000, for example—to help students with the transition. Educating people about finances is wonderful, but if they simply don’t have enough income, it can be discouraging. Providing material support alongside education would make a significant difference.

Zach Taylor: That’s a fantastic point. I’ve kept my ear to the ground with the union—the AUP here in the U.S.—and I’ve followed graduate student unions at other institutions. You see it in the news: student union protests, student union picketing, work stoppages. When you peel back the layers, you realize these students are being paid an average of $30,000 a year to do what a lecturer might be doing for $65,000 or $70,000. It’s cheap labor for the university—extremely cheap labor.

So, when universities say they care about financial wellness but don’t financially support it, it rings hollow. Universities need to go beyond words and provide real financial support. Absolutely, I’m with you 100%.

In closing, if a graduate student reading this or listening to this is planning to pursue graduate school next year, what are the top two or three things you would encourage them to think about when making their decision, especially in terms of personal finance and financial wellness?

Dr. Emily Roberts: The top consideration has to be income versus cost of living, as we’ve been discussing. It’s not enough to just look at that top-line income number and think you’re set. You need to understand what that income will mean for your lifestyle in the city where you’ll be living. You have to dig deeper. How far will your money go? What resources are available through the university, the state, or the county to help meet your specific needs?

Does the university offer subsidized housing, and how can you get on that list? I had a friend who went to UCSD, and at the time, they had heavily subsidized graduate student housing. She was able to bypass the waiting list because her roommate already had an established place in the graduate student housing. There are opportunities like that, and it’s worth investigating them.

Also, consider grants that might be available to help with specific situations. If you have a child, does the university offer childcare grants or subsidized on-campus childcare? Are there top-up fellowships for low-income or first-gen students? What can you apply for on the front end to help ease the financial burden?

And on the topic of income, think about how your income might change over time and how you might increase it. Graduate students will likely have to live frugally, but there may be ways to supplement your income. Are there certain fellowships or grants in your field that everyone applies for? Are there part-time teaching opportunities that could add a few thousand dollars to your annual income? Sometimes it’s as simple as negotiating your funding package. If you have an offer from another university that includes a moving bonus, you can ask your current institution, “Is that something you could offer me as well?” Sometimes the answer is yes, and it’s just a matter of asking the right questions.

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Learn more about Dr. Roberts' work at her website: https://pfforphds.com/