I recently announced that I would be featuring at least one budget profile each week, including bloggers. For those of you who may be new to this site, I encourage others to bare their budgets so we can all benefit by seeing how everyone else is (or isn’t) making it.
This week I am excited to be featuring C from The Single Dollar!
My wife tells me that if she hadn’t married me, she would have gone on to get her Ph.D., which is something that I just do not understand. She tells me some people don’t care about money as much as I do. I had a hard time believing that at first. That’s one reason I wanted to feature C. She took the Ph.D. route and is building a solid financial foundation for the future.
C describes how she spent her post college years working in theater & freelance endeavors in New York City. She says she was somewhat financially lost and that her student loan balances were constantly hovering in the background. After getting her Ph.D. and moving to Indiana, she decided to get her financial life in order. She paid off almost $25K in 18 months! I asked her a few questions based on her current financial situation that you can read below.
Follow the link below to check out her budget profile (it will open in a new window). It consists of monthly income & expenses & total net worth. In other words, all of the dirty details that we love to read about.
The Single Dollar Interview
1. What is your current financial goal, and when & how do you plan to reach it?
I have two right now. One is long-term: to retire at some reasonable age (60ish?). I’m saving $1000 a month right now in a 403(b) (the nonprofit/education equivalent of a 401(k)). I’ll gradually up that to the maximum as my salary increases. I’ve also got a small Roth IRA that I contribute to occasionally, but not very systematically at the moment.
The other is shorter-term: to save $10,000 in what I’m calling a “down payments fund,” which I can use either for a house or for a car, or perhaps for a security deposit on a rental plus a car. I’m not sure where I’ll live a year from now (see below) which makes it hard to know if I’m going to buy a house or not. But I figure cash always comes in handy. Right now I’m contributing $125 a month, but starting next month I’ll up that to $600 (after I finish filling my e-fund.)
2. My wife is more of an artsy academic type herself. She thought I was pretty weird in the beginning, financially speaking. Though we never fought about money, it took a while for us to start seeing eye to eye. You seemed to have “woken up” financially all by your self. What do you attribute that to?
Panic? The academic market is freaking terrible these days, and when I got out of grad school I was actually very fortunate to have landed a well-paying one-year position. I also had $19K in loans plus some moving-related credit card debt, and $0 savings of any kind.
If my job had been more long-term I probably wouldn’t have been so freaked out but as it was I knew I had exactly one year to get my financial life in order before, well, who knows what. At the end of that year I was again fortunate to get another good, though still temporary, job, so it’s turned out ok, but at the time I was just worried I’d have to cover months of no income between the end of my one-year job and the beginning of whatever I found next. I didn’t want to be in the position of worrying about student loans and car insurance.
3. The thought of being an NYC freelancer in writing and theater seems like a very appealing lifestyle to a lot of young people. Would you have traded that experience? Is there anything you would have done differently?
Hmm, that’s a really good question. It was awesome in a lot of ways. I loved how practical the work was; instead of being stuck in an office I was out all over the city at different filming locations, or backstage at the theater, and I learned a ton of physical skills that made me much more confident.
I also learned to be more outgoing; I was always the weird quiet introvert reading books, in that world, but when I got back into academics I found that out of self-defense I’d developed much better making-small-talk-at-a-party skills than I’d ever had before! And I got cool free stuff, like clothes and tickets to shows, and got to write off my netflix subscription and theater tickets, etc, as a professional expense on my taxes.
That said, it wasn’t necessarily a great financial choice overall. I switched careers four times in the four years after getting out of college, and each time I faced the need to find that first gig, build up contacts, learn new skills, etc. All of that cost money in various ways. And I was really underpaid until I got into a union; before that I was routinely working 14-hour days for $50-100. I survived, but I sure didn’t save.
The #1 thing I would have done differently would have been to figure out a way to keep working deeper into grad school. It was hard to schedule theater work against classes because they’re both very fixed (you have to be at this place at this time), so I couldn’t get a regular gig and had to just do substitute work. And after a couple of years of that I was pretty stressed out by the time crunch, so I mostly quit theater work.
If I’d sucked it up and figured it out through at least the next few years, I’d have had health insurance through the union, vested in the retirement plan, AND probably have had a pretty healthy bank account instead of $19K in debt. Oh well.
4. What was it like moving from New York to Indiana? What effect did the move have on your finances?
AWESOME 🙂 People laugh at me, but really, I was over the amount of effort that goes into living in NY vs what you get out of it. It’s great, don’t get me wrong, and I miss some things (good coffee shops, the Metropolitan Museum), but I could never afford to live anywhere that didn’t result in epic subway commutes and I just got to hate all that time underground. I felt overwhelmed and socially isolated a lot (everyone is so busy there that it can be really hard to pin people down to a time to see them.)
Here, my money goes WAY further (rent’s about half as much for about six times as much space), there are fewer people and fewer cultural experiences but more ability to actually take advantage of what there is, and my town is actually quite beautiful. Plus I can get wherever I want in ten minutes of driving or twenty minutes of biking. Oh yeah, and I can bike, too! I was always too scared to do it in NY, though obviously a lot of people do.
5. You don’t read a lot about going the PhD route in personal finance literature (at least I don’t). It seems like a good way to go if you value job security and a good life balance. Now that you are there, what are some of the pros and cons you’ve experienced?
LOL, there’s a reason for that: it’s a terrible financial choice!
The job security thing is, alas, pretty much a myth these days. Sure, you can have some job security if you first spend 8-10 years in graduate school, making $15-30K tops while spending your own $$ on research trips etc, then survive a truly insane job market to actually get a tenure-track job, then work for seven years with no job security at all! And even then, if you do get tenure, you’re still vulnerable to your college closing down.
There was a window of 20 or 30 years when higher education expanded hugely after WWII because of the GI bill, so there were tons of jobs for people who qualified, but that’s pretty much been over since the late 1960s. I know many people who are making $40-45K in their early/mid-30s, after a decade of professional training and experience, and that’s not even talking about the adjuncts.
That said, I love my job. Some of it has to do with the extremely interesting work I do; the ratio of ridiculous bs to actual meaningful work is very good in my day to day life. I have friends that earn more money that are very happy too; I even know some really happy lawyers! But it really is true that my schedule is super flexible.
I work a ton, and more or less all the time (I rarely get to unplug entirely) but I can often do it in locations that are not the office. When classes aren’t in session, I can usually arrange to go visit friends for a week or two or three at a time, and just haul whatever I’m working on with me. And during the semester, I can shift work around; I often work on the weekends, and just as often take off a couple of hours early from the office to deal with personal stuff.
I value that freedom a lot, and it helps keep me happy with my life choices even though I have a pretty low earnings ceiling compared with basically anyone in the corporate world. My current university also has excellent fringe benefits, which isn’t always true at other places but can be; health insurance premiums are fairly cheap, we have a wonderful staff-only health center on campus that I get my primary care from, and I have funding to attend at least two conferences every year. I can usually tack on a few days to those that I pay for myself, so they pick up the plane ticket to California or New York or London, and then I just have to cover food and lodging for non-conference days. It helps me deal with the low salary for my age/education level, when I think about stuff like that.
Your turn to bare your budget
So there you have it! Thanks to C for this glimpse into her life & finances and her amazing insights. For any of you wondering if you could make a life for yourself in New York or go the academic route, just look to her as an example.
I am currently taking submissions from people who are interested in being featured. If you are interested, post your budget and send me an email.