Finances can be tricky when you’re a student. Certainly for undergraduates the hallmark of financial success is often escaping your overdraft and returning your balance to zero.
Yet for funded postgraduates with a healthy stipend I don’t believe it needs to be gloomy. In fact I believe that for those of us with no major financial burdens, it not only makes sense to start saving for the future but it should be entirely possible.
I’ve been able to save money every year of my PhD while paying rent in central London and if I can do it you can too!
If you enjoy this post I’ve also written a report for 2020 which includes the completion of my PhD and starting as a postdoc.
Why I save money
- As a safety net to reduce stress. I never have to get stressed about paying bills or being able to afford to buy or do things I want. In the future it will also save me from worrying about the risk of redundancy.
- The bank of Mum and Dad (or any other family member) won’t be saving the day to provide a housing deposit for me and I’d at least like the option to buy somewhere.
- It buys me financial freedom so that I can take career breaks or go to any job I want to, no matter the salary. Eventually it may also allow me to go part time if I so choose.
How I did in 2019
Now that 2019 has come to a close I’m happy to say that I saved over £10,000 this year whilst living in an expensive part of London. To be clear: I mention this not to gloat, but to show what is possible for a pretty typical person.
I have some other small sources of income besides my stipend, but there is absolutely no reason that most students on a stipend (excluding those with children or similar financial commitments) can’t be saving a few thousand pounds a year. And to any young professionals reading this: you’re almost certainly earning more than us students so have even less of an excuse!
For the clarity, the goal isn’t to be a recluse and never spend any money. I’ve written about wanting to make sure PhD students make the most of opportunities, yet I believe capitalising on these experiences and saving money should both be very possible.
Sources of Income
PhD stipend
My PhD scholarship was the main source of income in 2019 supplemented with smaller contributions from a variety of other sources I’ll explore in further detail below.
Selling online (eBay, Gumtree & forums)
I’m absolutely loving having a more minimalist lifestyle, both in terms of buying less stuff and selling off the stuff I don’t use. I made over £2500 this past year decluttering, whilst also giving loads of stuff of value to charity too. Not everyone will have boxes of things of value to sell, yet I can almost guarantee you have stuff sitting around which you don’t care about and could be worth more than you think. I sold a 50p coin for £160, read more about my experiences here.
Investing & savings performance
The beauty of having built up some savings already is that if carefully invested this itself can provide some income. This past year I made over £2000 from:
- Stock performance including dividends*
- Compound interest on cash mostly in cash ISAs
- Returns from peer to peer lending accounts again some of which is in ISAs.
*Please note that I’m including share performance of stocks (% Change in Value), which isn’t ideal because despite doing well in 2019 they could just as easily fall in value. I recommend using the dollar cost average investing technique where you regularly invest a set amount no matter what the markets are doing.
I try to minimise how much money I have sat in bank accounts earning little or no interest, unless it’s doing good things.
Banking offers
This is one that’s super easy and I highly recommend everyone to get in on it.
New account offers
Firstly banks entice new customers by handing out cold hard cash. This year I opened new accounts with First Direct and HSBC giving me £300 cash. MoneySavingExpert keeps an up to date list of all offers here:
Nationwide have accounts offering a great 5% interest and also have a nice refer a friend scheme which allows you to earn £100 by opening an account, then an additional £100 for each friend you recommend (up to 5 per tax year). As of April 2021 this offer isn’t currently running but if you ‘re interested in switching then please send me a message. My policy for affiliate schemes is detailed here.
Lifetime ISA: 25% bonus
The second banking offer I recommend is to open a Lifetime ISA (LISA) which is ideal for saving for a house deposit. The magic happens because however much money you add to it (up to £4000 a year) the government adds an extra 25% for free! This means that if you max it out and add £4000 you get £1000 added for free! This would be a perfect thing to save in to once you have a small safety net if you’re just starting out saving and have aspirations of owning a home.
Other income
Finally I’ve bunched together other small ways I made money in 2019, mostly GTA work at uni, matched betting and market research sessions, all of which I consciously kept to a minimum. Read here about what I recommend for making extra money on the side. It also includes a few cheeky academic prizes I was awarded throughout the year, such as:
Jeff won the best ‘lightening presentation’ at @ToScAConference for his work on 3D imaging of cartilage using micro CT. He can image chondrocyte patterns that enable strain measurement! With @NHM_London @RoyalVetCollege pic.twitter.com/iEHXQMbNax
— ImperialBiomechanics (@ICBiomechanics) September 19, 2019
My expenses
I’ve separately documented my monthly expenses including tips for cutting costs. A great example of a way I’ve begun saving money whilst having wider benefits has been cycling. I’ve said it before and I’ll say it again that the number one way I’ve found to cut costs has been to cook all of my own meals, saving thousands of pounds a year and making me more healthy and conscientious whilst learning a useful life skill: what’s not to love?!
My goals for 2020
The end of my PhD is rapidly approaching and my PhD funding actually runs out at the end of February, eek! I’ve chosen to not stay on with my current group to instead try things elsewhere: a perk of having financial freedom is that I feel under no pressure to support myself in the short term. However, this does mean that I’ll have no main source of income which wouldn’t be ideal whilst paying to live in London.
My solution is to stay in London until the end of March which is when I expect my viva will take place. I’ll use this month to finish writing up papers and explore a few non-academic side-projects I’ve not had time to focus on recently.
And after that? I’m going travelling! Now seems like the perfect time to take a break and see some more of the world. It does mean I’ll more than likely end the year with less money than I started, but it’s opportunities like this which are exactly what saving money allows you to go and do.
So in one year’s time I fully expect to have a smaller bank balance but hopefully I’ll have some great memories to make up for it instead. After many years of saving I’m quite looking forward to enjoying some of the money I’ve been setting aside!
Whether or not you’re currently saving money it’s never too late to start. Read why saving money could help you to find a career you love along with some tips on how to get started.
If you’ve enjoyed this post also check out my 2020 personal finance post.
