3 methods I use to budget money effectively while on a graduate school stipendFinancial Literacy

Graduate school has been a great place to engage in intellectual discussion, learn new things, and network with future professionals. It has not been the best place for honest discussions about challenges graduates students face financially, professionally, and emotionally.

PhD programs are usually funded during the academic year, August to May. From mid-May to mid-August, you are on your own, unless you are able to find a paid internship or job.

I am still putting in applications for summer positions, but I had to plan for the worst case scenario- that I will not have  income for three months. Since August, I have been saving money with the idea that I would not have an income stream during the summer.

I typically make my budget four months at a time and last night, while revising my budget for summer, I nearly had a panic attack. I realized when I put aside all my money for the summer, I forgot to calculate money that would need to go towards car registration, insurance, gas, summer transit pass, and a new Arizona driver’s license. 

This overlook was a careless error that I rarely make when it comes to money and I now I need figure out a way to make up for this mistake; hence my near panic attack.

Besides this mishap, I follow a simple framework to effectively budget on a  graduate school stipend. Earn, save, spend. Master these three key components of personal finance and you will be closer to financial freedom. 

 1. Earning

 Your ability to bring in money is considered earning. You can earn money by:

  • Inheriting money
  • Having a job that pays well
  • Getting a raise
  • Creating a side hustle/hobby 
  • Starting a business
  • Selling items
  • Gaining a skill
  • Increasing your marketability
  • Becoming more educated/trained

Earning is my weakest link on my three pronged framework. I do not make that much a month from my stipend and my freelance copy editing business has slowed down considerably since I started school. However, because I am working toward my PhD and also have several skills, my earning potential increases greatly. Once I get situated in my career and work on marketing my business, my earnings will increase. In the meantime, I need to get creative in how I earn money while in school and I have a few ideas that hopefully I can put into fruition during this summer.

2. Spending

Using money to pay for a good or service is considered spending. Your ability to spend minimally and wisely will determine how much money you have in the long run. You can decrease your spending by:

  • Becoming a minimalist or living frugally
  • Creating a budget
  • Cutting out unnecessary services
  • Learning how to shop wisely
  • Paying little to no interest 
  • Cutting out the big purchases 

If you spend more money than you earn you will obviously have negative returns, however if you spend less than you earn you will have positive returns. If you want to increase your surplus money, you need work on spending way less than you earn. This should be a major goal.

Spending is my best link on my three pronged  framework. Because I don’t earn a lot, I had to become really creative and disciplined. When you are barely making any money, you need to get really creative when it comes money allocation and spending.

3. Saving

Earnings not spent is considered saving. Savings is your ability to create, grow, and use surplus wisely. You can increase your savings by:

  • Putting extra income aside
  • Stocks/Bonds
  • Being logical about how you divide your savings
  • Always contribute to savings
  • Creating a plan with goals – what are you saving for and how long will you save?
  • Paying off debt
  • Saving first spending later

Saving is the medium link on my three pronged framework. I know I should put aside my savings first, but I actually put whatever is left over from expenses into my savings. Many people put 10% of each paycheck aside and while I would love to do that, I put away about 5% of my income into savings. My philosophy is that it’s better than nothing. When I earn more, I will be able to save more because I will not increase my spending.

Mastery of Money

The ultimate goal should be to master each one of these prongs in the money framework, if you master each step, you will have mastered money and be one step closer to achieving all your financial goals.

As a graduate student, I’m making enough money to survive month by month, but not enough to survive year by year.  I use these basic money building tools as an educational experience. If I can survive on what I am making now, I know once I graduate and get more than triple the money I am making now, I will have the foundation needed to be financially literate and smart.

I  will not take my earnings and overindulge, spending erratically, I will save and invest my surplus earnings so I can guarantee a secure future for me and my family.

This is not something I learned over night. It has taken trial and error to understand, earning, spending, and saving. I still am learning and I have a long way to go. But I made it my goal a few years back to not let not earning a lot of money stop me from saving.

In a future post, I will go over how I create a budget and share some tips that might help you.

Do you have anything to add to this post? Share in the comments. I am far from a financial expert, so I would love input! 



An urban planning PhD student finding peace in creating a balance between the mind, body, soul, & environment.

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Photo Credit:  401 (k) 2012 

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