Before I started budgeting, I was horrible with money. I had a minimum wage, part-time job, and was living paycheck to paycheck. I also got help from my parents with tuition and some living expenses. But, I still wasn’t making any progress in my financial situation, as my checking accounts always dwindled back down to zero at the end of the month. I couldn’t build up any savings or emergency fund, which was horrible since I couldn’t come up with the funds for an emergency root canal.

In 2014, I started to learn about personal finance and budgeting, and tried YNAB. I credit the YNAB method on getting out of the paycheck to paycheck cycle. Here, I want to go over how I got out of the paycheck to paycheck cycle and was able to save for emergencies and future large purchases.

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I’ve been thinking more and more about financial independence and retirement, even in my early career as a postdoc. It’s important to think about retirement while you still have time at your advantage. Time in the market beats timing the market, because of the magic of compounding. It’s even more important to take investing in your retirement in your own hands as a grad student as there are several things working against us when it comes to retirement savings and investing. You’re not earning a lot in your “prime” working years Most grad students enter grad school at the young age of 21. PhD programs typically take 5-6 years to finish. That means you will be graduating at 26-27. Compared to students who graduated with a bachelors or masters and started working, you will have lost 5 or more years of earning potential. Not only that, the working people will

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If you are a postdoc or newly minted faculty working in academia, or if you’re working for a non-profit, you may be able to contribute to a retirement savings account known as a 403(b). It is similar to the 401(k) in terms of contribution limits and benefits. You can contribute to it using pre-tax income, lowering your taxable income. You pay taxes when you withdraw the money after retirement age (59.5 years). Or, if the institution offers it, you can contribute after-tax money to a Roth 403(b). When you withdraw after you turn 59.5, and as long as the account has existed for at least 5 years, you can withdraw the money tax-free. Benefits of a 403(b) The benefits are similar to contributing to a 401(k). Your employer can also provide a match to motivate you to save for retirement. If that’s the case, contribute up to the match. You

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I have two brokerage accounts with Fidelity. One is for a future car purchase, and the other is for house down payment. I don’t plan on drawing from these investments for a few years. But, I still want to be able to access them before the traditional retirement age. Plus, I didn’t want to use a high yield savings account, which currently pays out 0.5% at Ally. That money needs to work harder than that. Brokerage accounts make sense … … if you want to invest your extra cash and you don’t need them for a couple of years. If you sell the investment within a year, you will be subject to short term capital gains tax. This is equal to your ordinary income tax. If you hold your investments for longer than a year, they will be subject to long term capital gains tax. Long term capital gains tax

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You recently graduated and got a job, congrats! You start to go through your benefits package and you stumble upon the 401(k) account. You read things like matching, vesting period, and contribution limits, and you’re getting more and more confused. Should you even bother contributing? Here’s some information on the 401(k) basics and some advice. 401(k) basic terms Let’s clear up some terminology. contribution: the percentage of your salary you put into the 401(k), usually pre-tax. contribution limit: limit set by the IRS how much you could contribute per year. match: the percentage your employer will contribute to your 401(k), usually based on how much you contribute to it. For example, the employer will match 100% up to 5% of your salary, which means they will match you dollar for dollar if you contribute 5% to the 401(k). This is free money! vesting period: the amount of time it takes for

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