Personal Finance of a PhD Student

The worst side of aiming to doctorate is the insecurity of funding. In a seminar of the doctoral school of Vaasa, we were encouraged to start to save. The dissertation is only the start if you're going to stay in academia and you should prepare for that, check for e.g. the Professor is In. The blog convinced me to buy the book and that was a money well spend. 


The unknown future, photo credits: Jan Gustafsson.

However, another strategy that I apply, is simply saving when I receive salary. 

I have automated a part of that saving by purchasing two different index funds in three parts. That is  9 - 10 % of my net wage. However, that is far from enough because in addition to preparing for possible period of funding I doubt the pension system that we have in Finland. And yes, my salary is not very high at the moment (and the taxation in Finland is high)! Thus, the amount that I automatically save is  too small. Given the current situation in the markets, it is good to allocate cash so that you can buy when the stock prices drop. 

I recommend to automate a part of savings for several reasons. 
1) you don't need to think about it = guaranteed action. You may forget the whole thing after calculating your budget. I have calculated my average spending on food per week and fixed costs (housing, internet, phone, gym and so on) to see how much I can use for cloths and fun extra stuff per month. This month I have bought photo books for my mom, a book about international relations for me and I am thinking about buying a certificate from online classes on Edx and Coursera. I hope I don't buy much else "extra" in this month :) Of course I have budgeted some extras for weekends.  
2) the costs are low (in my banks (note plural), 0€ per purchase).

Why index fund? 
1) cheap!
2) do you think you can beat the index? I don't believe you (in the long run at least). 
3) minimize the risk by an asset that is buying multiple stocks
4) easy to understand what the fund has bought. Always know where you invest in. 
5) additionally it is cheap way to invest abroad

My index funds:
Fist one was investing in Finland, I saved to that one year. With that money I'll finance my graduation party when the time comes.
Now I'm saving an Europe  and a World index funds. The last mentioned has value less than  I have paid for it, but I hope that changes. This also means that I can now get it with lower price! 

What I should develop: 
saving in bank account for short term funding risks. 



It is always easier to say how things should have been done. (c)  Jan Gustafsson


How are preparing for the unwanted outcomes in funding applications or pension system? 

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