Managing Finances as a Graduate Student
Managing finances can be stressful for graduate students who have many responsibilities and limited income. The costs of graduate school—including tuition, housing, books, transportation, and basic necessities—can overwhelm students and affect their academic and work duties. Fortunately, graduate students can successfully manage their expenses by improving their financial literacy and developing an informed budget.
Financial literacy is the ability to make effective and informed money management decisions. It can help you decide whether a potential purchase is a need or a "want," reduce the amount of student debt you take on, and help you build wealth over your lifespan. Financial literacy can help inform decisions such as how much money you should spend on groceries for the week or how much money you should save for the upcoming academic year.
Graduate school is a significant investment of your time and money. Every graduate student has a distinct set of financial circumstances to manage while they work toward completing their program. However, there are some strategies that can help prevent money matters from overwhelming you. Living within your means is critical to avoiding overspending as you pursue your degree. Reflect honestly on how you spend your money and create a budget that balances your needs (e.g., rent, utilities, groceries) and wants (e.g., travel, concerts); online banking can help with this process by itemizing your transactions for you. This exercise may feel unpleasant, but the benefits are greater perspective and self-awareness about your spending.
Paying for your Graduate Education
CSULB offers a number of resources for graduate students to finance their education, including scholarships, grants, graduate student assistantships, federal student loans, and federal work study. Graduate students should keep in mind the following:
- Student loans are still a major option for most students pursuing graduate study. This fact is especially true at the MA level, since many MA programs, unlike most PhDs programs, are unfunded. It is recommended that students become familiar with the difference between federal and private student loans prior to taking on debt. Federal student loans are funded by the federal government. Private student loans are funded by private entities like banks, credit unions, state agencies, schools, and more. If you need student loans to pay for your education, consider federal student loans first since they tend to have lower interest rates, and more flexible repayment options, than private loans. Student Loan Heroes offers information on how graduates can repay their student loans quickly.
- Ask your department if it offers graduate student assistantships.
- Financing your graduate program will likely mean cutting back on some luxuries. Some graduate students choose to live with family members or with roommates to offset rent costs, or use public transportation instead of a personal vehicle. Whatever adjustments you choose to make, do so after weighing individual costs and benefits.
In addition to the resources linked above, there are several on-campus offices and centers that can help graduate students finance their education:
- Financial Aid & Scholarships Office
- Graduate Studies Resource Center (helps students identify on-campus and external sources of funding)
- Career Development Center
- Office of Research and Sponsored Programs
How to Track Your Spending with a Personal Budget
One tool for tracking your finances is developing a personal budget. You can manage a personal budget by creating a spreadsheet to track your income and expenses—spreadsheets are particularly useful because you can customize the formulas to fit your budget as needed. To create a budget with spreadsheet software, make a list of your sources of income (e.g., paycheck, financial aid awards, etc.) and expenses by month; your budget should include everything from your rent payment to your Netflix subscription. This is where the fun begins: add up your total monthly expenses, and then subtract this sum from your total monthly income. The remainder is typically how much you have available to spend (or save) for the rest of the month.
Learning how to budget well is a process that requires mistakes, big and small, to master. If you have money remaining after subtracting your total monthly expenses from your income, consider saving a portion of it in an emergency fund. Many experts recommend building such a fund in any amount between 3-12 months of your total monthly expenses. If you find that your expenses exceed your monthly income, consider cutting back on purchases that could be considered more of a “want” than a “need.”
Tips for managing your finances
Below are general tips for staying within your budget during graduate school:
- Understand CSULB’s loan policies and borrow only to cover your needs. You will have to pay your student loans with interest, so consider scaling back on satisfying your “wants” while you are in school.
- If possible, set an emergency fund aside in a savings account that covers at least three months of core expenses.
- Strive to pay off your credit card and other high-interest balances every month. Never be late on a payment, since late payments usually incur fees or other penalties. Pay the minimum fee, if you must, but never be late with a payment.
- Avoid overspending on restaurants, coffee, and other “small” expenses; over time, these expenses add up quickly. Meal planning and cooking at home can be a budget-friendly alternative; many online resources exist that cater to specific diets.
- Shop online to get the best deals on textbooks. The CSULB University Bookstore has some helpful suggestions on its Textbook Options page. Many online retailers (like Amazon, Chegg, Abebooks, and Ebay) offer substantial savings on textbooks. Also, online book aggregator sites (like BIGWORDS and DealOZ) allow you to compare the prices offered by different retailers, and the CSULB BeachBookCompare service allows you to customize such comparisons by the exact course you’re enrolled in. Finally, the CSULB University Bookstore, along with many online retailers, also allows you to rent textbooks.
- Carpool or use public transportation to get to campus. CSULB offers free Long Beach Transit TAP (Transit Access Pass) cards to all currently enrolled students. You can use the extra time to catch up on your reading!
- Use the Student Wellness and Recreation Center (SWRC) on campus for your exercise and wellness needs. The membership fee is included in your semester tuition.
- Take advantage of student discounts at on- and off-campus stores.
CSULB offers an excellent series of online, self-guided workshops called "Financial Literacy 101." They are available free to the entire CSULB community (students, faculty, and staff). To get started, visit the Financial Literacy 101 website here: https://csulb.financialliteracy101.org/students.cfm