By Rosalyn Leban
Getting ready for a fellowship can be exciting, but it can also be stressful trying to budget on a limited stipend. Budgeting on a fellowship follows the same principles as budgeting normally, but there are some differences. The biggest is that, in many cases, you’ll be living in your host city or country for a short period of time. You may not have the support systems you’re used to. Your transportation needs may be different. For example, if you’re used to taking public transportation, that may not be an option; if you’re used to having a car, you may not be able to bring it.
There are many factors to consider when you’re planning a budget for your fellowship period, but these six points will get you on the right track.
1. Start planning early.
The unfortunate truth is that, depending on the amount of your stipend and where you’ll be living, you might need to supplement your stipend with savings or additional income, so budgeting on your stipend needs to start before your fellowship begins.
Research your new city to find out the average cost of housing, transportation, food, etc. and determine if your stipend will be enough to live off of. If it is not, do your best to save up in the months preceding your fellowship. Remember that the fellowship is temporary and that you’ll be gaining crucial experience. If it’s something you’re passionate about, it may be worth it to save up beforehand and live on a minimal stipend for a few months for the benefits it will bring in the future.
2. Figure out your total income per month.
Once you know how much your stipend will be, you’ll need to figure out how much you’ll receive per month. Some fellowships distribute stipends for more than one month at a time, so it’s important to know how much you can allocate for your expenses every month. That way, you won’t run out of money before the next time you get paid.
An important thing to note is that most fellowship stipends are taxable. However, unlike with a regular job, your income won’t be withheld to account for those taxes. There are exceptions to this – if your fellowship is a scholarship used for qualifying educational expenses, for example – but it’s an important consideration when you’re calculating the money you’ll be able to use for expenses. Ideally, you should try to calculate estimated tax and pay quarterly. If not, you’ll get hit with a big bill at the end of the year and you may be fined.
So, to calculate your monthly income, take your total stipend and subtract the estimated taxes you’ll owe based on your income for that tax year. Then, divide your stipend by the number of months your fellowship lasts.
3. Supplement your income.
If your fellowship allows it and you need it, consider taking on a part-time job to supplement your stipend. Many fellows abroad teach English in their off-hours. I know some U.S.-based fellows who work service industry jobs on the weekends to make ends meet. This is sustainable for them because the fellowship is for a limited time and revolves around their passion!
However, be careful about getting a second job. Fulbright fellowships, for example, may be reduced if the committee is made aware of your having a second job. Check with your fellowship administrators to see if your fellowship allows you to supplement your income with outside work.
4. Look for low-cost housing.
If your fellowship doesn’t include housing, rent can eat up much of your stipend. Finding affordable housing is crucial. Living with roommates, your family, or a host family and living further out can be cost-saving ways to make the most of your housing budget.
If you’re completing a fellowship in another country, a host family can be a cost-effective way to be immersed in language and culture! Even if you’re not, consider reaching out to alumni of your college to see if anyone can host you for all or part of your fellowship.
Another effective option can be living in a less convenient location. If you choose to do so, make sure to take transportation into consideration. Living further out can mean less access to public transit and more money spent on taxis or gas. Make sure to research different areas in your city to see what your best options are. If you’ll be abroad, consider reaching out to the embassy or consulate in your area.
5. Take advantage of social programs, if you need them.
Many fellowships based in the US (for example, AmeriCorps) advise their participants on how to sign up for SNAP benefits (or food stamps) and other essential social programs. If you’re living on a limited income, it’s important to take advantage of these programs to ensure you’re getting the healthcare you need and eating enough. Talk to your fellowship administrators to see if your fellowship can help.
6. Don’t forget to have fun!
Just because you don’t have much disposable income doesn’t mean you can’t take advantage of fun things in your host city! If you’re living in an expensive area on a limited stipend, make sure you’re tuned in to free and low-cost activities like free museum days and events in the parks. Buying local produce is a great way to save money and you’ll also get to experience the culture of your host region!
If you’re abroad, careful budgeting can make a big difference when it comes to getting the most out of your fellowship experience. There are many budget-friendly ways to get to know your host city or region and make the most out of your fellowship! Just remember that when you’re following a strict budget, you’re doing so in order to use that money to have a little fun.
© Victoria Johnson, all rights reserved