PhD Money Diaries: Living on $3950 a month in Palo Alto, California
The nitty gritty and the big picture.
Everyone jokes that doing a Ph.D. is one of the worst financial decisions you can make. Most of us make a point never to divide our stipend by the number of hours we work; some calculations are better avoided. As Stanford Ph.D. students, we have some of the highest stipends in the country but also live in one of the most expensive areas in the country ($174,000 median household income). For the most part, my stipend covers all my needs and also some wants. Being a part of a rich and powerful institution affords us many privileges (gym, wifi, laundry). Growing up relatively poor, I feel like I can live quite comfortably on a Stanford Ph.D. stipend. Even though money is difficult to talk about, I’ll try my best in this post to share candidly. While there are likely ways I can better optimize my spending habits, I am sharing what my real monthly budget is like to give those considering a Ph.D. a sense of what things might look like financially. I encourage other Ph.D. students to do the same!
Before I start, a few caveats:
I cannot make any additional income because I am on a student visa (my Ph.D. stipend is my only source of income),
I do not have any children or dependents,
I do not have any student loans (thanks to going to uni in Canada and summer tech internships),
I do not support my parents financially on a regular basis,
Computer Science Ph.D. Students can do summer internships which can make a big difference in yearly income but can be tricky to navigate depending on whether your advisor supports you going on internships and visa restrictions. Some CS Ph.D. students also have their stipends doubled during the summer quarter (depending on advisor support).
The Monthly Budget (From Jan 2022)
Federal and State Taxes: $450 (~11%)
Health Insurance (Mandatory Cardinal Care): $430
Rent (incl. utilities, activities fees, etc): $1500
Let’s begin with the costs Stanford directly deducts from your salary. Stanford housing costs vary widely from the cheapest at around $1100 a month (a room in a two-bedroom apartment with no living room) to $2600 a month (a studio with air conditioning and a dishwasher). I live in one of the older, cheaper two-bedroom units and I pay about $1395 before fees per month. The unit features a nostalgic twin bed, many friendly spiders, sustainable living (a.k.a. no AC), and a short 6-minute walk to the laundry room. Overall I am happy with the cute little townhouse unit I get live in. So far, getting a concussion from the unit is probably the most notable downside of picking a cheaper housing option (but that is a story for another post). Stanford also charges health insurance and health access fees that amount to about $1300 per quarter. This is an amount you must pay if you are not on your parent's or spouses’ health insurance. Fortunately, Stanford will cover some of these costs next year! Yay!
Getting Around ($400):
Car: $120 (insurance), $50 (parking), $100 (gas), $50 (maintenance & fees), $50 (ride share)
Public Transit: $30 (Cal Train/BART, 1 round trip into SF)
Having a car in South Bay makes your life a lot easier. I am fortunate to have bought my car while working full time so I do not have a loan on it. Maintenance and insurance for my car are areas I am willing to splurge on since being as protected as possible gives me a sense of safety. I also take public transit to SF sometimes to meet friends. The weekend CalTrain is once an hour so wise planning and a little Ubering/Lyfting might be needed to get to things on time.
$4 (NYTimes) + $8 (Audible) + $8 (Netflix) + $5 (Spotify) + $5 (Adum)
I pay for Netflix for my family billed in Canada so I save a few dollars. I also try to support the New York Times by having a student subscription. Having a subscription lets me read the more niche sections like the Obituaries, for when I am looking for perspective. I listen to many audiobooks and podcasts so Audible and Adum are both really awesome for me on top of getting free audiobooks from the library.
Groceries ($200), Restaurants ($150), Coffee Shops/Boba ($50)
One cost-saving benefit of being a small Asian girl is that I don’t eat very much. I get full from a small salad every evening for dinner. In Palo Alto, I can buy a fresh bunch of kale for $2 at the farmers market and it will last me a week. For lunch, there is a lot of free food on campus to take advantage of. I am eternally grateful for the professors who help fund lunches for us hungry grad students. I only get coffee or go to restaurants (dine in or take out) in social settings. Even though many finance YouTubers swear against paying for expensive coffee, it is hard to avoid in social settings when you are meeting a friend at a coffee or boba place. I try to budget this in and save money by getting a small-sized drink or not adding boba/toppings to my milk tea.
$160 (Shopping), $120 (Health & Beauty), $20 (Gifts/Donations), $100 (Therapy)
One of the reasons I feel quite comfortable living on the Ph.D. stipend is because I can afford to order not just minimum necessities but also get things I want. There are certain recurring costs like moisturizer, hair products, feminine products, face wash, hand soap, sunscreen, and contact lenses that add up. But I can also have some excess shopping budget a month that I can spend on buying books, thrifting for clothes, getting resistance bands, buying more books, or trying fake lashes. To some, this might sound materialistic. But at my current income, buying small things is a much more viable route to happiness than traveling or other expensive experience-based things.
The Big Picture
The tougher part:
While the Ph.D. stipend covers my monthly costs, sudden expenses like booking flights for visa reasons, getting your first parking ticket, and needing cavities filled can be quite terrifying. I read a parking sign wrong recently and got a $300 fine and cried for an hour. As a grown woman, crying about a parking ticket is likely immature and not productive. But when your monthly savings suddenly evaporate in a few seconds, it can feel very crushing. Even though $300 is just pocket change for your Mountain View neighbors, it is an astronomical amount for you (and many other people living in the US). All you can really do is read the sign more closely next time and hope nothing else pops up.
My current day-to-day is wonderful: I love doing research and I love being around brilliant people. I can’t imagine a job that I would prefer more than doing research in such a wonderful place. Although my salary is low for Palo Alto, living on a Ph.D. stipend feels much less stressful than racking up student loans during undergrad. I am sure there are families around me that make do with much less. I have the freedom to see friends in SF and can even afford to buy little things that make me happy! In many ways, I feel like I am living the dream!
Looking ahead, my financial goals revolved around providing for people around me. I know that I want to be able to take care of my parents as they get older. My parents moved across the world so I could have better opportunities than they did. I want them to not just have the bare minimum but to maybe also have nice things, like flying them economy plus to see me.
When I first got accepted to Ph.D. programs, my biggest hesitation was the opportunity cost of not being able to build a financial safety net for my family. I will likely land a stable job even in the worst-case scenario of not graduating. But even worst-case analysis here seems too optimistic when financial anxiety is your learned mental state. In the end, I decided in favor of graduate school after assuring myself that:
I had paid off my undergrad student loans,
My parents are still relatively young (in their 50’s) and currently doing alright supporting themselves, and
I had some savings from working for a year in Tech to fall back on if needed.
I reasoned that I had a few years to flop around before getting serious about financial stability. This decision is likely very different for other students with a different set of constraints. I feel really fortunate to have the luxury to try something risky and fun like a Ph.D.!
I also want to be financially prepared to have my own family. I have no idea what it looks like to raise a child on a Ph.D. or postdoc salary. The industry path seems like a much easier road in this aspect. At some point, I’ll have to weigh whether wanting to do more research is a valid enough reason to delay knitting together a financial safety net for my family. It can be hard to talk about this aspect of career planning with professors or other Ph.D. students; many of whom may come from affluent backgrounds or academic families. But I hope this post can serve as encouragement for students considering or currently in Ph.D. programs facing financial uncertainty. I am always happy to chat if I can be helpful to you with more advice/details.
For now, I am doing my best to dodge my, hopefully irrational, fears of not being able to find a job and not being able to support my parents post-graduation. At the end of the day, I recognize that I am in an extremely privileged position to be at Stanford. This Ph.D. will wrap up in a few years (knocks on wood), and I trust that my future self will figure out a way to carve out a reasonable path somehow.
Thanks for reading :)
Thanks to Kaylee Burns, Jennifer Leung, Elle Michelle Yang, and Kaitlyn Zhou, and Jesse Mu for their thoughts and input :)
Thanks for reading Convex Optimist! Subscribe for free to receive new posts and support my work.
Appendix: Anonymous responses from Ph.D. students to the question “What do you want but cannot afford”?
“I guess one thing is ... therapy sessions, even with co-pays, it adds up”
“Living with fewer people.”
“Nice skin care products, like nice vitamin C serum.”
“Fitness classes in Palo Alto”
“A dog, it is technically possible but probably not wise”
“Car” (walking really limits you in Palo Alto)
What is your answer?