Personal Finance for Graduate Students

The most important thing to consider when financial planning in graduate school is that everyone’s current situation and future goals are unique.

The “right” way to manage your finances in graduate school is the way that makes the most sense for you. That means investigating your own needs, priorities, and desires for the future.

As explained by Dr. Brian Bolton, Dwight W. Andrus Jr./BORSF Eminent Scholar Endowed Chair in Finance, financial planning in graduate school can be difficult but grad students are well positioned for the challenge.

What Do You Need? What Do You Want?

Personal finance for graduate students is all about working with what you have, and building the knowledge and skills that will pay off over time.

Consider your short-term and long-term financial goals. In the immediacy, you’re thinking about how to pay for grad school and manage your living expenses. Your long-term goals, meanwhile, are intertwined with your career plans, your family, and other personal goals.

Take the time to think about what you value, and the things that give your life meaning. Is that continuing your education? Building a family? Traveling the world? Ultimately, you’ll want to match your financial behavior to your personal values.

Get comfortable with articulating your long-term plans. Once you know what you’re working toward, you can figure out exactly what you’ll need to do financially to achieve your goals.

How to Create a Grad School Budget

There are many tools available to help you create a budget, from specialized apps to a trusty Excel spreadsheet.

There multiple approaches you can take to managing your income and expenses:

A top-down approach, where you take your total income and allocate every dollar to expenses and savings.
A bottom-up approach that is needs-based and focused on expenses.

When you’re working with a limited budget, starting with your expenses may make the most sense.

A classic budget model uses a 50/30/20 breakdown, where 50% of your income goes to needs, 30% goes to wants, and 20% is used for savings and debt management. However, you should adjust these percentages in a way that makes the most sense for you.

For example, figuring out how to save money in grad school may be difficult. If you can make it happen, however, setting aside some amount--even if it’s small--each month is still building a habit that will serve you well in the future.

Learn Your Habits

You can figure out if your current habits are working well for you by taking a mindful look at your spending.

Track your expenses in a spending journal or app, and identify situations where you might want to make a change. You may notice yourself making non-essential purchases from a particular store, or paying for a subscription you rarely use.

Or, perhaps you recognize that there is nothing you can or want to change, and that’s fine too! The main point of the exercise is to become more aware of your spending. Don’t let the task be solely focused on creating restrictions.

Keep Moving Forward

Financial planning in graduate school can help you be attentive to your present situation and set you up for success as you move forward. Make plans that work for you. Think about managing your income and expenses as a way to advocate for yourself and what you want in life.

Find out more about personal finance, tailored especially for graduate students, through our Money Matters workshop series. Join our upcoming event on debt management on October 27.