Or, Finances & I…
A (relatively) brief history of me & my finances:
- Scholarships (70%)+ family members (30%) paid for my college education. I worked part-time throughout school to be able to afford gas, meals outside my dining plan, etc. Regrettably, I spent the rest of my income on clothes and such. Never again will I think of any income as “disposable”!! I always had a small savings account (approx. $500), but it never got too far above that.
- I worked in retail managing a clothing store for a little over a year after college and before graduate school. I was able to save a few thousand dollars (approx. $3000), but I ended up needing a big chunk of it for medical costs right before I began graduate school (about $1200).
- In my first graduate school program, I was fortunate enough to have a tuition waiver and an assistantship. This was huge for me, as it would have cost me many, many thousands as an out-of-state student. Each semester (there were five), I was responsible for $25 tuition & $650 in student fees. While the approximately $9K I made from the assistantship each year helped cover the school costs, it primarily went toward living expenses ($6000 for rent + utilities, then food, gas, taxes, etc.). In addition to the fees, things like books, tires, health insurance, and moving costs ended up absorbing the rest of my savings.
- Fast forward to the end of that graduate program in July 2010: I had no debt (consumer or student loans), but no savings, either (for retirement, emergencies, or anything else).
- There aren’t assistantships available for the graduate program I’m in now. I’ve taken out loans to cover the cost of tuition and fees, but I’m not using any loan money for living expenses. I’m living with my parents (rent-free), and I have a very generous relative who covers the cost of my books & most of my gas. My car is a 2003 model that is paid for, and my parents take care of my phone bill (it’s a $10 addition to the family plan) and car taxes/insurance. Until my 26th birthday in May, I’ll be covered under their health insurance.
I am so fortunate to have the following things (and the people behind them!) working in my favor:
- no student loan debt aside from what I’m beginning to accrue now
- I haven’t had to pay for a number of common expenses (rent, health insurance, books, car insurance)
I’d describe my role in my financial well-being, until last October when I changed my course, as one of treading water. Sure, I was always saving a little bit, but never enough to do any more than cancel out my expenses. Not only is that model not sustainable–my expenses can only go up–it is not one I find desirable. For too long I have justified (to myself) that my relatively low income and student status were necessarily correlated with low savings and little ability to influence my financial status. “This is temporary,” I’d think, “and I’ll be so responsible with money when I have a salary; I can’t wait to be a saver! Woe is the life of a grad student!”
No longer. I now realize that I have the power to increase my earning potential, diversify my sources of income, and make better spending decisions. It’s convenient that I want to take a more active role, because I also need to be in better financial health.
Here are some of my financial needs and goals:
- Beginning in May, fund health insurance monthly; in the past, this cost me around $200/mo. for a full-coverage plan. I need to research the best plan for me now, including options through the college I’m attending
- Be prepared to take on all of my expenses at some point in the summer of 2012. That means rent & renter’s insurance (I’ll move out of my parents’ house), car insurance & taxes, phone bill (even if I’m just giving $ to parents for staying on their plan; I think this could be in their best interest, too), etc.
- Be prepared to begin student loan repayment (the total will be approximately $17,000) in August of 2012. I hope (plan? intend?) to have a job teaching in August 2012 (I will be doing everything in my power to get one); I also plan to pay down this debt aggressively, rather than over 10 years.
- Fund an emergency fund. Right now, I’m aiming for $1ooo.
- Open a Roth IRA to start my retirement savings. Again, I need $1000 to do this.
- Build my fund for Irregular Expenses. This will cover expenses like car maintenance. I don’t have a particular number in mind for this one, but I’m making regular contributions.
- Afford a few random expenses: a trip to a friend’s wedding in April; a bridesmaid’s dress for a friend’s wedding I’m in in July.
I plan to accomplish these things as a full-time student with a part-time job. Fortunately, I don’t have to take classes this summer, so I’ll be able to work many more hours then.
My wheels are turning with ideas as to how to make all these things happen! It is a little overwhelming when I see all the goals together, but I’ve found that as long as I’m being proactive (and not reactive), I’m significantly less overwhelmed. I’m just glad I’m doing this now rather than later!
[Note: The family members who have helped me have done so graciously and generously, and I believe they have genuinely wanted me to accept their gifts; I’m thankful, and I have accepted. I will not be repaying these gifts (nor did they expect me to), and I think that is okay. I do believe, however, that for me to be in financial straits or make poor financial decisions would be an ill-fitting response to their generosity. I hope to let their gifts enable me to make good financial decisions, and I hope to be solidly on my own financial footing as soon as possible. (This is not very eloquently put, but I hope you understand my gist…)]