I'm wrapping up a doctoral degree in the physical sciences and heading to an industrial job in a few months. My grad school years have been spent in one of the highest cost-of-living parts of the States, so my individual savings aren't in great (mid four-digits), but I'm mid-twenties and thankfully debt-free (no student loans, never carry a credit card balance, car bought with cash, etc.) My new job will be both in a much lower cost of living state and a significant step up in salary at a little under $100,00/year base + signing bonus + potential annual bonus, dependent on company performance and my personal success or failure. The company offers a 401k with a mixed match (I put in 6%, they fractionally escalate until they've matched 4%) and discounted stock for employees. Health and dental carry a modest deductible but the coverage is good.
I've gotten by for a little under a decade as an undergrad on scholarships and lab assistant support and then as a grad student on fellowships and TA appointments; now that I'm slogging through my dissertation I'm starting to dream about how to structure my finances once I actually have finances to think about. I've been in school longer than most so I know I'm behind in starting major retirement savings, but the emergency fund will have to be bumped up first. Industrial research jobs are growing less stable than they once were, so I'm wary of locking myself too much into the company's system beyond what I need to get the match. I'm also likely renting for the first few years as I'm not sure if I'll be settling at that particular site long enough to merit binding myself with a mortgage to the local real estate environment. If you were in my shoes and starting your first outside-of-school job, how would you allocate things for the first few years?
-Almost a PhDBoy, doesn't that sound like a chemist? McArdle has some good answers, including thinking about a budget, staying out of the local real estate market for a year or so (until AaP figures out their new city) and working on three things:
- An emergency fund with 6 months worth of expenses.
- Saving 15% for retirement
- Saving for other things, including a down payment on a house