Friday, August 31, 2012

Alternative savings vehicles?

Credit: Forbes
For some reason, I was reminded of a favorite passage from Anthony Bourdain's Kitchen Confidential: 
Many of the Spanish-speaking members of the crew took part in an unusual "banking" scheme where each week all the members of a large group would sign over all their paychecks to one guy. The recipient was selected on a rotating basis, and the way it worked, I gathered, was that for about two months or so everybody squeaked by, doing their best to make do without a check, spending little... until the day it was their turn, at whcih point they came into thousands of dollars and could spend like drunken sailors.  
This practice made no sense to me. It also required an extraordinary amount of trust in one's fellow cooks. I did not share my comrades' confidence that Luis, for instance, wouldn't skip town on a drunk after getting his big payday and leave the others in the lurch. I held on to my meager paycheck. I had no time to spend it anyway. 
I know that's it's difficult for grad students and postdocs to save money, but this sort of pooling would seem like a great way for an emergency fund of some kind. Granted, you run into the same problem -- how much do you trust your labmates with your money? Who is the treasurer? Which 5-gallon can of solvent do you drop on their feet when they skim off the top -- the acetone or the dichloromethane?

Readers, what's the best way for graduate students and postdocs to have some meager savings? 


  1. Marry someone with a real job?

  2. Some states treat grad students as public employees, which enables them to accrue matching retirement befits. This was the case in Ohio, which allowed me to save quite a bit tax-free.

  3. Savings in grad school? My husband and I left grad school with an extra $11,000 student loan and $30,000 in credit card debt (despite our stipends). Forget saving. I would have settled for breaking even!

  4. Money is definitely tight in grad school, but for most people it is surely within reason to save a little every month. It sounds like you and your husband had extenuating circumstances.

    1. Not for anyone going to schools on the coasts.

  5. I live simply and buy stocks with the savings. I spend only around 1000$ a month max. remainder gets invested.

  6. Keep your expenses low. Don't eat out that often, and more importantly: set aside your savings as soon as you get your paycheck! (Not at the end of the month). Then you'll force yourself to be more frugal.

  7. It burns to hear people say "live simply" or "don't eat out" and "set aside your savings as soon as you get your paycheck" as solutions for saving money. For me and people in my financial situation, it really does not work out that way.

    I'm a grad student at UCLA, and after taxes, and prorating a nine-month stipend for twelve months (we're expected to travel sponsored by the department during the summer, which precludes a job), I make $1000/mo. The rock-bottom cheapest housing in the LA area, renting a room in someone else's house, costs about $700/mo, but $900/mo for housing is more realistic. If I only ever ate beans and rice, and never got sick or needed to travel, I might, MIGHT be able to break even.

    The international students in my department, who pay higher taxes and can't work during the summers, only survive on the charity of others. If not for the professors giving them food and letting them housesit, they would literally starve.

    If you have any suggestions for accumulating savings under these circumstances, please, be my guest.