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How to Save 50% of your Income on a Grad Student Salary

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I graduated college at the tail end of the Great Recession, and job prospects weren’t great. I also was reluctant to join the 8-5ers (I wonder if that’s true for most people seeking FI). Thus, I decided that grad school was the right path for me, and my then boyfriend (now husband) had conveniently chosen the same path one semester ahead of me.

I had always had the personal goal of being a professor because I grew up in a Big Ten college town, and many of my friends parents were professors. I had noticed that the professors seemed to be the ones who enjoyed their jobs the most. (I mean sabbaticals and study abroad trips to South Africa?!? Sign me up!) Well, going to grad school changed my opinion on that, at least for me!

The Path to your Financial Independence is Best Ventured on Foot or Bicycle

In general school came pretty easy for me, and I worked hard to get good grades, internships, and international research during undergrad. This set me up well for grad school and I was able to secure a  generous National Science Fellowship of $30,000 + tuition per year. This is basically double the typical grad student salary. My first year, I decided to accept a university fellowship instead (might as well save the funding for the next three years…silly me, there were only two more years since a Ph.D. wasn’t in the cards, there’s $15,000 I’ll never get back).

Mr. Kiwi and I had been dating for 3.5 years at this point, and decided to move in together, for the relationship, but also a frugal win. We are both naturally frugal and chose the cheapest apartment that was an easy bike ride and walking distance from our classes and lab (2 miles each way).

The key to saving money was not letting lifestyle inflation take effect. I think graduate school really helped form us into the intrepid savers we are today. We were both used to scraping by in undergrad, and even though we now actually had incomes we didn’t see the need to change our approach to spending. Honestly for us, it was all pretty natural. We didn’t have a formal conversation about budgets. We did start blending our money (not recommended, but it worked out for us in the end) since I’m really the only one with interests in all things financial.

We, unintentionally, saved half our money during this time. To us this meant that half of our money would go towards rent, utilities, food, fun (aka cheap alcohol), clothing, gifts and small purchases. We viewed the other half as “savings,” but used our savings to pay off student loans, purchase cars (only once we moved into our super sweet rent free house…more details to come), the down payment on our current house, and any trips we wanted to take. We always had access to this savings, since we just kept it in a checking/savings account at our credit union, so it felt like we could travel and spend this whenever we wanted. Our approximate monthly expenses (year one was only Mr. Kiwi, I joined for years two and three):


Year Item Monthly Cost
1 (Total = $590) Rent, Internet, and Utilities (Super cheap sublease, living with some questionable sophomores) $300
Food $150
Gas for trips to visit me! $40
Misc. $100
2 (Total = $1205) Rent and Utilities $550
Internet (Shared with friends in same building) $25
Food $250
Gas $ give to friends for road trips (we didn’t ownthe car, but we sure tagged along for a lot of trips) $20
Entertainment/Dates $30
Bars $30
Misc. $100
Medical (Ugh, chronic pain) $200
3 (Total = $1517) Rent (6 months free! 6 months at $500/month) $250
Utilities $100
Internet (we are the people who call all the time, negotiate, and hold firm) $17
Groceries (we started liking fancy beer and switched to paleo) $350
Dogs (The pack was made!) $80
Student loans (Mr. Kiwi started working and stopped school) $250
Entertainment/Dates/Bars $50
Medical $200
Gas $100
Car Insurance $100


Once we had a decent amount stockpiled ($5kish), we would throw the money at our student loans (which were still in deferrment, yay subsidized loans and grad school!), knowing we didn’t want to be bogged down with debt. We had heard about Roth IRAs and started to invest in them as graduate students, but we cautious about the stock market, and took the secure route of investing in CDs at our handy credit union. Until this year when they matured they were getting only a ~2% return, which is deflating to me since the stock market has climbed substantially since we opened our first Roth IRAs! Looking back at our tentativeness I shutter at the opportunity missed, but I’m grateful for our conservative approach since we could have lost it all by trying to predict the market. So hey, engineering for the win, adding a few safety factors really won’t hurt our dreams too much in the long run.

Here’s a breakdown of our income/spending/savings over that time (Mr. Kiwi, started working full time during year 3):


Year Income ($) Annual Spending ($) Annual Saved ($) Savings Rate
1 22,100 7,080 15,020 68%
2 34,200 14,460 19,740 58%
3 46,720 17,964 28,756 62%


Looking for my Future

Some big expenses over those three years (which came out of those savings):

Car 1 = $6,000

Student Loans = $18,000 (Almost all of Mr. Kiwi’s in preparation for buying a house)

Roth IRAs = $14,000 (Did these in years 2 and 3, after we learned that we can save for retirement during grad school, cool concept right!?)

The rest of the savings went towards our down payment on our house in year four!


Wow, I’d never done the math before. Although you can see that I’m more spendy than Mr. Kiwi, the lifestyle inflation over those three years was fairly reasonable. We really set our path to FI up well those first years. Thankfully (?) our personal issues with money have made us both scared to spend it. Had our parents taught us about money I probably wouldn’t have found this awesome community of FIRE. But I’ll save that monologue for another time!

More UP Beauty

What’s missing from this summary? Well, not much really, some of the awkwardness of year 1, since it was mostly just the Mr. Also, at the end of year three we bought our second car, I included the insurance costs, but not the monthly payment, since the insurance cost calculated over the whole year makes up for that gap. We travelled mostly to conferences that were paid for by our professors. Otherwise we camped in state, which is covered in the misc./entertainment budgets. I’m sure I missed some random expenses, but I know the incomes and amounts saved, so this is pretty darn close to accurate. (I’m going back about seven years, pre-spending tracking! Give me a break!)

Grad school is supposed to be a time of squeeking by or even going into debt, but we managed to save >50% of our incomes! Has anyone else beat the odds and saved when the world told them they should be going broke?


Also, obviously I’m no financial professional. Just an Internet stranger with a blog.

1 comments on “How to Save 50% of your Income on a Grad Student Salary”

  1. Pingback: How I Paid Off My $40K Student Loans Before Graduating - 99to1percent

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