Now that I'm coming to the end of my studies and telling people that my 'plan' is to travel until I run out of money, I'm starting to get asked where on earth I got that money from, and I thought: well, that's a great question!
Coming to the end of my degree sets me up perfectly for an overview of my finances. Previously, all I had were some rough estimates of how much I've been spending and saving, getting some concrete numbers to ground me has been incredibly productive. I highly recommend you try the same.
I'll start by including some relevant details about myself, followed by a summary of my income and expenses over my four years of tertiary education, finally I'll reflect on what I've learnt, what I'd do differently, and some of the ethical questions that should be raised when considering my 'financial strategy'.
In England, the government manages tuition fee loans and 'maintenance fee' loans (and grants) separately; 'maintenance fees' loans cover living expenses and are distributed such that students from low-income households receive more support. The loans are only paid back if one earns more than a certain wage. You can find an easy to digest summary on moneysavingexpert.com.
I can't rely on my family for financial support. Luckily, the government places my family in the lowest bracket of household income and thus my maintenance loan is the smallest and grant the highest. The university that I studied at (University of Nottingham) also provide a non-repayable bursary for low-income students.
Extra things to consider are my multiple Study Abroad experiences; this less-than-standard academic track has additional expenses associated with it, not to mention the effect it had uprooting me from my weekend job.
My first two years of university reflect a 'fairly standard' student budget. Though I hadn't heard of early retirement, I didn't spend much on expensive food, go to restaurants, or even drink much alcohol. The last two years of my degree (when I discovered early retirement I learnt how to penny pinch, in my most extreme case I've spent NZ$30 on food per month. Even spending a quarter of my demographics income seems excessive at this point. My flatmates would joke about when I'll be joining them for my next monthly shopping trip. Not that it wasn't hard work to develop this kind of mentality, the reality is I've just kind of normalised this level of frugalness.
All in GBP unless otherwise stated.
Childhood Savings ~ 400
Student Halls - 4938.40
Catered accommodation on campus.
University of Nottingham Core (low-income) Bursary - 2000
University of Nottingham Global Travel Bursary - 750
Korea University U21 Scholarship - 500000 WON
Korea University International Summer School - Not tracked but I was not frugal while here.
Grant - 3387
Loan - 3862
Tuition - 9000
Carry Through ~ 2200
Rent - 290.40/pppm
University of Nottingham Core Bursary - 1000
2:1 Scholarship - 200
An incentive for Physicists to get good grades in their first year.
Weekend Job - 911.17
Grant - 3167
Loan - 4157
Tuition - 9000
Carry through ~ 6000
With 1000 of that in a 'Help to Buy ISA', something I recommend to anyone in the UK. Also, note the shorter academic year due to study abroad starting early.
For a more precise breakdown see my Study Abroad Expenses.
University of Nottingham Core (low-income) Bursary - 3000
University of Nottingham Global Travel Bursary - 500
Grant - 3387 + (1536.76 travel bonus)
Loan - 5314
Tuition - 1350
Carry Through ~ 6800 (Jul)
Due to (perceived) uncertainty in my finances (due to being abroad) I stopped regularly adding to the ISA, this was not a good idea.
Rent - 240pppm
I have yet to pay bills for Year 4 (Aug)
University of Nottingham Core (low-income) Bursary - 3000
Crypto - 500
Thought I'd try my hand at cryptocurrency/tokens.
Grant - 3482
Loan - 3879
Tuition - 9000
(Kinda) At the time of graduating.
Current Account ~11000
Help to Buy ISA ~2700
Not including interest over the years.
Maybe I shouldn't even categorise my student loans under debt, a more accurate description is "graduate contribution system" (in the UK).
Maintenance Loan ~17212
Tuition Loan ~28350
What I've Learnt
Gratitude! I hadn't realised just how much support I've been given until I added it all up:
- Total Scholarships: 10500
- Total Grant: 14959.76
this is honestly a jaw-dropping amount of money to see that's been invested into you.
As a bachelor, with an average income of 17750 (over the past four years) I am more than able to cover my already very comfortable lifestyle. This has helped put career goals into context and how much I value a high wage versus a satisfying/motivating job.
With average savings of 3615 per year, I have massively overestimated my savings rate. At this rate (~20%) it will take me 37 years to retire! All else being equal, I'd have to be earning just around 70000 per year to achieve my goal of an 80% savings rate! ...Since I can only think of ways I'd like to start increasing my spending, I'm not quite sure how realistic that goal is anymore!
What I'd Change
It's so embarrassing to admit that most of those 'savings' are in a current account. I should have been "making my money work" by using a savings account or contributing to a cash ISA.
If money was my primary motivation, it's honestly worth bringing up whether getting a degree (especially a masters) is worth it. Not only have I accrued debt, but I've also missed out on four years of opportunity costs! Luckily, money isn't my only motivation, and I'm thankful for what I've had the privilege to experience, even if it did get stressful!
One of the most substantial expenses as a student is one's accommodation, having experienced catered halls, room share, and flatting I can say I don't regret going into campus accommodation in my first year. It is quite excessive though and I firmly believe you can get the same social environment in self-catered or room share accommodation. Another option is living with family while studying which is an incredibly financially sound choice, for those who have it, especially if your family are the type not to charge rent. However, from what I hear, one must make a proactive effort to socialise.
Investment in oneself, especially while young, has compounding value. I would even go as far as saying both literally and figuratively. I became too cheap with health and self-education.
As I've said, making this summary has been eye-opening. Firstly, it's simmered down my ego regarding my savings. If it weren't for the grants/bursaries over the years, I would have been forced to drop out and get a job.
Over the last four years, I've been developing a deep specialisation in Physics, giving me a unique skill set. Although I'm confident that I will always use the broader, 'scientific problem-solving traits' that I've learnt, I'm uncertain about how much I'll apply the knowledge that my professors have taught me. Society has invested in me gaining this knowledge. If I decide to move out of the country, or not use these skills (by going into a different profession), whose fault is it if I turn out to be a bad investment?
Similarly, I took this opportunity and these resources in place of someone else, someone who may or may not have been a better investment, someone who could have made more use of it.
Do I have a responsibility to maximise the states return on investment on me?
One of the first things in my notes on The Richest Man in Babylon is:
"A wealthy person will quickly become poor if they do not have a stream of income to keep their purse full."
Having savings means having the ability to "make your money grow", should I lose my advantage by travelling? It's conceivable that even in just a few years I'd be able to invest in real estate. Instead, I'm just letting my money dry up. On the other hand, one could view travel as a risky investment, a gamble that the experiences and character development I gain from travelling will pay off in the long run. Not to mention the inspiration it may yield for business plans.
Most people in the UK don't pay back their student finances in full. However, they don't usually take steps that lead to not paying it back at all (choosing a lower income path, or moving abroad). If everyone did what I may do, government support would dissapear, and people who need it would find it harder to get an education. The repayment method is agreed upon by the student loans company; if I don't meet the criteria, then I don't pay - simple as that. I don't feel bad for the loans company, but for the people taxed and didn't get a choice in how their money was spent...
The bursaries are entirely different; they're essentially donations from alumni intended to help those in difficult circumstances. How would they feel if they found out they are paying for me to go travelling? Having said that, because of them, having a summer/weekend job has been optional which has been a tremendous help. I have less weight on my conscious with these grants as there is no agreement on how it gets spent, a stoic person would know that as soon as it leaves their hands, they have no control on how it gets spent.
Related: The Enchiridion - Epictetus
I am at a crucial juncture in my life, I'm still young; and although one way of interpreting that is that each decision I make now will send ripples throughout my life, I instead prefer to think that means I should be considering whether or not I can make that decision! While I'm young, I don't have as much weight holding me back, and it is still easy to change course if I believe I'm going in the wrong direction!
Tied to my doubts about wasting my financial position is the fear that, after a long of being away, finding employment will be more difficult. Not only that but the motivation for how hard I've been working so far has been from the structure and deadlines of the university. I wonder how my work ethic will change without that - I suppose this is perfect practice to see if I am ready for the early retirement lifestyle!
My mind has been all over the place with these topics, as you might tell from my writing! If there are any comments, questions, or criticisms don't hesitate to post in the comments!