Establishing an Emergency Fund for Grad School or Changing Careers
Developing a back-up plan has been a recurring theme on Post Academic. Thanks to the shrinking job market, both grad students and even full-fledged professors must continue to build new skills over time. That way, “post academics” can make a graceful transition into a new profession.
Part of making that graceful transition, however, is having enough money during that scary “in-between jobs” phase. An emergency savings fund can help you breathe easy and make the right job decisions. A career change is scary enough without worrying about how you’re going to put food on the table. But how do you build an emergency fund when you are an underfunded academic?
Figure out how long your emergency fund should cover. Financial experts can’t seem to agree on how many months of unemployment you should cover. Some say three, some say six. In this economy, set a base goal of three, especially if you are on grad student wages, but try to aim for six before you either graduate or leave your program.
Determine how much you spend a month. Tracking spending and budgeting can be overwhelming, especially if you read the tips on decluttering and unhoarding. Yet knowing your monthly needs is also empowering because, if you don’t get that postdoc, you can look at your bank account and know exactly how long your money is going to last. Then multiply how much you spend a month by the number of months your emergency fund should cover, and you have your target amount.
More after the jump! Image by ADwarf, public domain, Wikimedia Commons.
Broke-Ass Schools and Broke-Ass Students: UMass-Amherst
Higher education is supposed to prepare students for a successful career, right? So why are students leaving feeling hobbled by debt? And what are they getting in return for forking over so much cash?
The UMass Daily Collegian reports that the average debt load for a UMass-Amherst grad is $21,614. But wait, there’s more! The same article notes that the average student loan debt is $20,200. And that takes private school debt into account.
UMass-Amherst is a state school, so why on earth would the debt be that high? Students, grad or otherwise, turn to state schools precisely so they can avoid the debt associated with private schools. They might even get a better education as part of the deal. Something’s wrong when a state school’s student loan debt approaches a private school’s student loan debt.
In the past, it was considered a smart financial move to go to a state school so you wouldn’t graduate with as much debt. Now it makes me wonder if it isn’t better for students to attend a community college and transfer in, just as many students in the University of California system do. It’s a shame that students would miss out on a chunk of the “college experience,” but at least they wouldn’t start their careers deep in the hole. As for the grad students, it seems that the cost of a grad education isn’t based on the distinction between public and private schools but on just how much aid the school offers, period.
Buried Alive: UMass students struggle with more debt than ever [Daily Collegian]
Map of student loan debt by state, which indicates that you should move to Utah
Hat Tip: HuffPo College Section [Huffington Post]
The Schools May Be Broke-Ass, But You Don’t Have to Be
The HuffPo college section unleashed a flood of education-related financial woe yesterday. The Broke-Ass Schools this time include Syracuse, Penn State, and Maryland. The stories focused on undergraduates who found themselves in schools they can’t afford, but the lessons apply to future grad students as well. If you get accepted, don’t sign on the dotted line right away. Take a long look at the aid package the program offers.
Ask how long the package lasts. PhD programs often provide some form of fellowship; MA programs, not so much. Even the PhD program fellowships last only a year or two. As for teaching assistantships, if you get one, that’s great. But you should also ask how long these assistantships will last, as the school might cut you off if you don’t get finished in time.
Compare the aid package to the cost of living in the area. UCI had subsidized student housing, so making the rent was easy, but that’s not the case for all schools. And there’s more to your budget than rent. For example, when I arrived to grad school, I had been accustomed to Nashville prices, not Orange County prices, and my budget changed drastically. Speaking of budgets …
Set a budget, and make sure it is one you can stick to. People with fancy tastes don’t belong in grad school. Just do whatever it takes to make sure you don’t wind up tens (or hundreds!) of thousands of dollars in debt.
Anyone with a PhD or MA in the humanities cannot expect to make the kind of money that will erase a massive loan. There are too many risk factors involved. For example, you might get a job offer when you’re done with your PhD, but salaries vary wildly from school to school, especially when you compare public and private systems. You simply cannot predict where you will end up, so it is wise to play it safe.
Image by Sten from Wikimedia Commons.
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