How much should a graduate student attempt to save?
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 ~00 per month) in which I need to finance my rent and living expenses AND make some savings.
Currently, I am living in a really expensive place at 0 per month and my living expenses (food, booze etc.) can vary from anything between 0 to 0 per month. 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.
EDIT: I can't really find a cheaper place and thus can't save on that.
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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 (0-0). 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 0 creates instance savings without having to sacrifice what you categorize as living expenses.
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 00. If you put 0 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 00 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 00 a month, so it must be harder for you now.)
If you do manage to save up 00, 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 0 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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