I am just starting out with my PhD after a relatively inexpensive BS. I have no loans or any other outstanding dues. My stipend (as is for thousands of US graduate students) is ~$1500 per month from which I need to pay my rent and living expenses AND make some savings.

Currently, I am living in a really expensive place at $900 per month and my living expenses (food, booze etc.) can vary from anything between $200 to $600 per month. I can't really find a cheaper place and thus can't save on that. Clearly, living expense is the only segment where I can try to be thrifty and save.

Considering my salary and my wish to make myself an emergency fund, what should be a good amount I should save? Ideally, I want a number so that I can set that amount aside per month and then brainlessly spend the rest on Tacos and Booze without worrying.

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    I'd be pretty happy surviving school at break-even, no loans. You'll be ahead of most people that way. And once a real income kicks in, saving should be easy for you. Jul 30, 2012 at 19:57
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    Agree with @JoeTaxpayer . Get through the grad school semesters break-even, get a summer internship (if you're in a field where they pay interns) and save money there. Or don't drink unless it's free (like at a conference party). I was in a similar situation as a Master's student.
    – Jay
    Jul 31, 2012 at 18:33

4 Answers 4


First, don't save anything in a tax sheltered vehicle. You will be paying so little tax that there will be essentially no benefit to making the contributions, and you'll pay tax when they come out. Tax free compounding for 40 years is terrific, but start that after you're earning more than a stipend.

Second, most people recommend having a month's expenses readily available for emergencies. For you, that would be $1500. If you put $100 a month aside, it will take over a year to have your emergency fund. It's easy to argue that you should pick a higher pace, so as to have your emergency money in place sooner. However, the "emergencies" usually cited are things like home repair, car repair, needing to replace your car, and so on. Since you are renting your home and don't have a car, these emergencies aren't going to happen to you. Ask yourself, if your home was destroyed, and you had to replace all your clothes and possessions (including furniture), how much would you need? (Keep in mind any insurance you have.) The only emergency expense I can't guess about is health costs, because I live in Canada. I would be tempted to tell you to get a credit card with a $2000 limit and consider that your emergency fund, just because grad student living is so tight to the bone (been there, and 25 years ago I had $1200 a month, so it must be harder for you now.)

If you do manage to save up $1500, and you've really been pinching to do that (walking instead of taking the bus, staying on campus hungry instead of popping out to buy food) let up on yourself when you hit the target. Delaying your graduation by a few months because you're not mentally sharp due to hunger or tiredness will be a far bigger economic hit than not having saved $200 a month for 2 or 3 years. The former is 3-6 months of your new salary, the latter 5-7K. You know what you're likely to earn when you graduate, right?

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    To your first points - That's what makes a Roth ideal. Low-to-no tax currently, yet tax free growth and withdrawal. It's why my 15yr old has a Roth worth over $10K. Apr 30, 2014 at 19:29
  • Saving in a tax-sheltered vehicle such as an IRA (including the Roth IRA touted by @JTP-ApologisetoMonica) requires that the saver have compensation (wages, self-employment income, commissions on sales. etc, simply put, money earned) by the sweat of one's brow. Many graduate student stipends fail to meet this requirement because they are scholarahips , fellowships etc that don't require services, and many _are wages (e.g. teaching assistantships, research assistantships, etc) that allow for saving in a tax-sheltered plan. Apr 28, 2021 at 21:05

While I haven't experienced being "grad student poor" myself (I went to grad school at night and worked full-time), I would shoot for 10-20% per month ($150-$300). This depends of course on how much you currently have in savings. If it isn't much, you might want to attempt a higher savings percentage (30-40%).

If you can move to a less-expensive place, do that as soon as you can. It's your largest expense; any place you can spend less on than $900 creates instance savings without having to sacrifice what you categorize as living expenses.

  • He already said the $900 'can't' be cut. So not sure there's much real advice to offer a guy trying to live on $600/mo. Nice try, though. +1 Jul 30, 2012 at 19:56
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    How can those "NOT" be cut? That's nonsense. He's living in "really expensive place". Surely not EVERY place in town is "really expensive".
    – Lagerbaer
    Jul 30, 2012 at 20:02
  • Well, my school is located in an expensive neighborhood and the public transport isn't the best (especially in Winter) so, I have little choice but to succumb.
    – user6865
    Jul 30, 2012 at 20:27
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    @Lagerbaer - as I read his question, I saw he edited in "I can't really find a cheaper place and thus can't save on that." When such a detail is presented as a given, disputing it seems bad form. Jul 31, 2012 at 1:07
  • @JoeTaxpayer that edit occurred after my answer. Jul 31, 2012 at 13:12

Get an internship and bank as much of it as possible

Based on your 200 to 600 number, it looks like you'll save between 400 and 0 dollars a month. It sounds like you'll be able to live on the stipend, but only just.

Find an internship over the summer and save as much as possible.

Considering my salary and my wish to make myself an emergency fund, what should be a good amount I should save?

Your savings shouldn't be based on salary, but on expected emergency needs. In my case, my largest foreseeable emergency need was to replace my car, so I decided I needed $5,000 in emergency savings as that is what I could replace my car for.

Even at max savings 5000/400 = 12.5 months, and you can't assume you'll be able to save 400 each month.

The best thing to do is get a 3 month internship and bank as much as possible. This is what I did to up my savings right before grad-school. During grad-school I was able to replenish my savings with small project work, and sometimes another internship.

I also found that having a large savings account was much better for my mental health during grad school.


It's really up to you and what you are comfortable with. Cutting back too far on your budget to save every penny possible can cause a lot of stress and could slow down progress on your research. On the other hand, not having an emergency fund causes stress as well. I would suggest reflecting on which gives you more anxiety and using that as a guide to find a good balance between two extremes.

I am in a somewhat similar situation as you. First year PhD student, stipend just under 1800, but my rent is only 300. I am able to save as much as 1100/mo, but most months I save between 900-1000. Biggest savings opportunity comes from food. I'm sober, never eat out, and love to cook simple meals like rice and beans or pasta.

There's no right answer, just find balance for yourself and know that if you are saving anything at all you're doing absolutely fantastic.

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