Advice for Creating Good Financial Habits While in Graduate School

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Financial Advice for Graduate Students

Money is a major issue for graduate students, and good financial habits are essential to cutting costs, managing money and making the funds last. More than a few grad students enter postgraduate education with undergraduate debt, and financial management becomes of paramount importance. Tuition alone is expensive, but it's the other costs that are involved in attending graduate school that empties bank accounts.

Count among these additional expenses books to buy for classes and transportation fees. Not to mention expenses such as child care for students with families. It can be overwhelming, but before you let it drive you mad, glance through this article to learn about ways to stretch your dollar further.

The Necessities

Good financial habits in grad school depend upon the student's ability to identify which costs are necessary and which can be avoided, put off or rationalized away. While you will definitely need that textbook for your biology course, you may be able to avoid paying full price by getting it at a used bookstore or searching on a site like Half.com. And see if you can't find a way to rationalize why buying the newest video game or DVD may not be the wisest choice.

It's helpful to make a list of direct and indirect graduate school expenses. Direct expenses include tuition, fees, transportation, books, supplies and loans. Indirect expenses include living expenses, personal expenses and child care. While many of the indirect expenses may prove to be necessities, it is some of the living and personal expenses that may be on the frivolous side.

Graduate students need to gauge how much they really need just about anything they're tempted to purchase. When standing in the aisle of the store, ask yourself questions about the product in your hand, such as: Do I need to buy this now? Can I find less-expensive options? Can I live without this? Much of cutting grad school costs has to do with having the ability to differentiate between what you need and what you want. You may feel like you really want something, but if you don't purchase it, will you seriously miss it a few weeks down the road?

Budgeting in Graduate School

If you want to establish good financial habits while in school, you must create an expense budget. Maybe you've never been the budget-type-of-person, but you need to change that. Write down a list of the necessities and figure out what you will need on a weekly and monthly basis. Factor in rent, bills, school supplies, meals, transportation, entertainment (from cable costs to movie tickets to concerts or anything else) and any other expenses that you will incur. It can also be helpful to set dollar limits for your expenses, so if you're having an expensive month, you know that you just cannot afford to get pretzel bites and a large Coke to see the next "Die Hard" film.

You must think ahead and come to grasps with the fact that you may experience a loss of income while you're a graduate student. Budgeting can be made easier if you can pre-pay for things like rent and utilities. Consult your landlord and contact utility companies to see if this is possible. Set up a plan to pay bills, and dedicate yourself to following that plan.You can also purchase pre-paid phone cards that can aid you in keeping your phone bills under control.

Effective budgeting involves a great deal of organization when it comes to record-keeping and financial documents. It also involves planning to some extent for the unexpected. Having a little room in your budget each month, if possible, can really reduce your financial worries.

Banking in Graduate School

Good financial habits in graduate school also depend on establishing excellent banking practices. It is advisable to transfer your financial aid from your savings to a checking account in monthly increments. Managing your bank account responsibly involves opting for low- and no-fee checking accounts, as well as recording all transactions.

Graduate students should plan out ATM withdrawals by taking out what they need for a specific period of time and putting the ATM card away. Direct deposit for paychecks can be of great help and students should look into direct deposit for their bills. Each month, compare your checkbook with your monthly bank statement to ensure you are balanced, as well as to spot the occasional banking mistake.

Credit cards are the source of many graduate students' money troubles, as well as their debt. These cards should be used with extreme care. Students should be sure to make their monthly payments on time, as well as to pay more than the minimum required payment. Choose a credit card with a low or no-annual fee plan and do not neglect to read all the fine print. Students should also beware of the traps set by special credit card offers. Don't choose a card based on that free cell phone - you will pay for it in the end through poor credit card rates.

Cutting Costs in Graduate School

Any chance graduate students get to cut costs should be examined and taken. Students can obtain part-time jobs, work-study assignments or perhaps tutoring jobs to bring in more money. They should shop around for the best deals when buying just about anything, but particularly textbooks. Most college bookstores offer a certain number of used texts, and websites such as Amazon.com provide customers with discounts as well as used texts. Many college towns have bookstores that specialize in relatively cheap used textbooks that they have purchased from students at the close of previous semesters.

Graduate students should take advantage of all resources and freebies provided through their school. If you are really having trouble with living expenses, consider taking in a roommate. Students can also choose to live at home with their parents if possible - and if they think they can handle it!

However, you don't have to move back in with Mom and Dad in order to reduce the amount of money you spend as a graduate student. Instead of eating out, stay home and cook. Rather than buying a new car, buy a used one or opt for public transportation. Clipping coupons and finding student discounts are great ways of getting more for less. If you pay for your own utilities, turn lights off when you leave a room and turn your thermostat down when you're going to be away for hours. It is estimated that, for every degree you lower your thermostat, you save about 5 percent off your electric bill. You might also share home-cooked meals with your graduate student friends, as a way for all of you to save some money.

The bottom line is that graduate school can be expensive. But students are committed to graduate school because they know that in the long run they will enjoy a higher quality of life. Your days as a graduate student may not be the most financially prosperous ones - and you may get devastatingly sick of Ramen Noodles - but it is only for a few years. The last thing you want to do is incur more debt, as you may face repaying student loans after graduation. And in that case, every dollar counts.

Remember, graduate school is supposed to ultimately increase your earning potential. Don't jeopardize that. Even if you have to budget, even if you have to slum it for a while, in the long run, it's worth it.

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