iJOBS Workshops: Financial Planning for Graduate Students and Postdocs

By Sonal Garg

Graduate school is a long-term investment, but it should not affect your long-term financial security. As graduate students, we are trained in many skills, but how to live on a stipend is not one of them. Between rent, groceries, student loans, and unexpected expenses, financial planning can seem unattainable. Additionally, the demands of graduate school and personal life can make it difficult to focus on financial planning and budgeting. Students often postpone financial planning by assuming they will begin once they have a "real job," but improving your financial literacy helps build financial wealth, self-confidence, and independence. As a result, it allows for a better balance between academic work and personal life.

Rutgers iJOBS recently held a "Financial Planning and Cash Management" workshop to help graduate students develop financial skills, including managing personal finances and navigating unpredictable futures. Timothy A. Knotts and Joe Conklin, certified financial planners (CFPs) from the Financial Planning Association of New Jersey, led this workshop, providing advice on balancing finances on a graduate student stipend. This blog explains how to manage cash flow, develop savings habits, make smart investments, and navigate taxes, and also provides resources to help you get started.

Understanding your cash flow

The first and most important step in financial planning is to understand how much you earn and how much you spend:

• Track your monthly expenses: Start by keeping a record of the amount of your daily expenses. Tracking your daily expenses helps bring unconscious spending habits into conscious awareness. You can use financial tracking apps such as Rocket Money, Monarch Money, Quicken, and YNAB, or more advanced AI-driven tools to help you build smarter budgets and plan for the future. If you’re a bit old school like me, manual tracking in an Excel sheet is still a great choice. I’ve included an example of my budgeting sheet below (Image 2) to give you a glimpse of how I monitor my expenses.
• Separate your accounts: Keep your regular income and daily expenses in a checking account and your savings in a separate savings account. This helps you keep track of how much money you are spending and reduces the temptation to spend it. Always check for any fees or minimum balance requirements before choosing a bank for your savings account.

Saving is a necessity

A pivotal step towards increasing financial confidence is saving money. Persistence matters more than the amount in the beginning—even saving $50 a month counts! One useful foundation is the 50/30/20 rule (Image 3), which divides after-tax income into three categories:

• 50% for needs (rent, groceries, utilities)
• 30% for wants (lifestyle, dining out, entertainment)
• 20% for savings and debt repayment 

Once you start saving, it's important to organize where your money goes. Different accounts can serve different purposes:

• Short-term savings should go into checking accounts, savings accounts, high-yield savings accounts, money market accounts, or CDs
• Medium to long-term savings should be in brokerage accounts, 529 plans (education), and retirement accounts like 401(k), 403(b), or IRAs

When your savings are kept in multiple accounts, you can track your expenses and avoid urges to spend. A simple way to think about your savings strategy is to build it in tiers:

• Tier 1: Keep 1–2 months of expenses in your checking account. During this stage, focus on paying off high-interest debt and, if applicable, contribute to employer retirement plans up to the company match.
• Tier 2: Build an emergency fund covering about 6 months of expenses. Once this is in place, aim to contribute up to 15% of your income toward retirement savings.
• Tier 3: Start saving for short-term goals (expenses within the next 3 years).
• Tier 4: Save for intermediate-term goals (more than 3 years, but before retirement).
• Tier 5: Focus on long-term retirement planning.

Saving supports both short-term and long-term goals, such as planning a vacation, buying a house, or preparing for retirement, but most importantly, savings provide a sense of security. Some of your savings will serve as an emergency fund for uncertainties in life, such as medical emergencies, car breakdowns, or unexpected family needs. This emergency fund will not only help financially but also give you peace of mind. Keep this in mind when you start your savings plan.

Thinking long-term (Even on a stipend)

Apart from saving, it’s important to start thinking about investing, even as a graduate student. Investing may seem intimidating at first, but you don’t need a Wall Street background to get started. When it comes to investing, one simple idea matters most: time in the market is more important than timing the market. Opening an account on an investment platform and investing in broad options like S&P 500 index funds, NASDAQ funds, ETFs, or low-risk mutual funds is a common starting point. Pay attention to the expense ratio, which indicates the fees the fund charges. The lower it is, the better.

Another important part of long-term financial health is your credit score. A good credit score (>670) can save you large sums of money in interest over time and can affect opportunities like renting an apartment or employment background checks.

• A credit score is a number between 300 and 850 that determines your creditworthiness. A higher score means lower risk to lenders.
• A credit report is a record of your payment history and financial behavior, maintained by the three major bureaus: Equifax, Experian, and TransUnion.

Building a good credit score requires patience. It depends on various factors such as the timing of your bill payments, maintaining low credit card balances, and the length of your credit history. It’s also normal to see small fluctuations; for example, paying off certain loans or closing accounts can temporarily affect your score.

Student loans are another important part of financial planning for graduate students. Many federal student loan repayment options are based on your income. These are called income-driven repayment (IDR) plans, such as Income-Based Repayment (IBR) or PAYE / REPAYE (or the newer SAVE plan). These plans adjust payments based on your annual income, calculate them as a percentage of your discretionary income, and, in some cases, can result in very low or even $0 payments if income is low. There is also the Public Service Loan Forgiveness (PSLF) program. If you work for a qualifying non-profit or public service organization and make 120 qualifying monthly payments (10 years), then the remaining loan balance may be forgiven. If you’re unsure about your options, it’s always a good idea to check with your loan servicer or your institution’s financial office.

Navigate taxes with confidence

Taxes can feel intimidating, but understanding the basics can make the process much less stressful. If your income is below a certain level, you may qualify for free tax filing assistance, which makes things much easier.

Here are several tax credits that graduate students should be aware of:

• Lifetime Learning Credit
• American Opportunity Credit
• Child Tax Credit
• Earned Income Tax Credit (EITC) that depends on income, number of qualifying children, and other factors

Keeping an eye on these credits can help reduce your overall tax burden. Before starting your tax return, make sure to gather all necessary forms and review your previous year’s tax return. The following forms depend on your employment status:

• W-2 → If you get paid as an employee (some stipends or jobs)
• 1099 → If you have side incomes (e.g., Uber, DoorDash, freelance work)

It is important to note that the IRS also receives a copy of your tax forms, so accurate reporting is essential. If you do not receive physical copies of your investment history, be sure to download appropriate tax documents (like 1099 forms) directly from your investment account. Of note, some graduate students receive stipends reported on forms like 1098-T or fellowship statements, depending on how the income is classified.

This may seem like a lot of information to consider—I certainly felt that way—but if you work on each component piece by piece, you will begin to see how it all fits together. Even small changes in how we think about and manage money can have a lasting impact.

Key takeaways

Financial management is not only about the numbers. It is about taking control, reducing stress, and creating long-term stability in our lives. I often feel limited by my stipend, but the workshop made me realize that it's not about how much money you make, but rather how you manage what you have. Even with a small income, we can still live a happy, balanced, and financially secure life.

Resources

If you’re unsure where to begin, these resources offer a great starting point that can support you in budgeting, investing, and overall financial planning.

Free Tax Assistance (VITA Locations - New Jersey)

If you prefer in-person help, these locations offer Volunteer Income Tax Assistance (VITA) services:

• UWCJ – New Brunswick Free Public Library
  60 Livingston Avenue, New Brunswick, NJ 08901
• HOPES CAP, Inc. (Somerset / Plainfield area)
  900 Hamilton Street, Somerset, NJ 08873
• UWCJ – Highland Park Senior Center
  220 S 6th Avenue, Highland Park, NJ 08904
• UWCJ – United Way of Central Jersey (Milltown)
  32 Ford Avenue, Milltown, NJ 08850
• United Way of Northern New Jersey (Online tax assistance available)
  222 Ridgedale Ave #301, Cedar Knolls, NJ 07927

Free Tax & Financial Planning Resources

• IRS Free Tax Prep (irs.treasury.gov): Offers free filing options and guidance for eligible individuals
• Savvy Ladies (savvyladies.org): Free financial planning support; they connect you with the professionals
• Personal Finance for PhDs: A great platform to learn finance for graduate students (I personally follow this for useful and relatable insights)

Investing Resources (Beginner-Friendly)

Books:

• The Elements of Investing by Burton Malkiel & Charles D. Ellis
• FIRE for Dummies by Jackie Cummings Koski
• The Only Investment Guide You’ll Ever Need by Andrew Tobias

Websites & Platforms:

• Fidelity and Robinhood: Both provide free beginner-friendly investing resources

Content Creator:

• Steve Chen (Call to Leap): Shares practical advice on personal finance and investing
  (I personally follow this for investing tips)

This article was edited by Junior editor Joshua Stuckey and Senior editor Antonia Kaz.