Rule #1: Know Thyself, and Know Thy Numbers.

Are you just starting to think about this stuff and have no idea how to start getting your financial life together? Start here.

Lots of smart academics are dumb with their money.

If you’re here, you probably already agree. Maybe it’s you, maybe it’s your colleague, or maybe it’s your advisor. But someone in your personal or professional life freezes up when someone is so impudent as to introduce the topic of personal finance. “I don’t know anything about that!” they quickly stammer. Or if you mention something slightly jargon-y about personal finance, they’ll look at you with a mix of admiration and bewilderment, and mutter, “I could never learn all of that.”

They can. You can. Every single person with a Ph.D. or professional degree has mastered a body of knowledge or practice orders of magnitude more complex than that required to get competent at personal finance. I argue below, echoing many personal finance would-be gurus before me, that what you need to do to get on the right track is fairly easy, conceptually.

The biggest barrier for many is starting. If that’s the barrier you’re facing, read on.

Know thyself.

The key to just getting started is starting with the first step. Below I sketch out an order that I think makes sense to proceed in for most people, but the best first step is the one that you feel rewarded by and motivates you to keep going.

So ask yourself: Why do you want to get better with money? After all, wealth can be great, but the numbers on your bank account themselves won’t make you any happier. In the end it has to affect key aspects of your life. So, consider.

  • What daily problems and stressors are you fighting due to your finances?
  • How have your finances impacted your family in ways you want to avoid?
  • What experiences and activities have you had to forgo that you don’t want to put off forever (or what haven’t you put off, but now you’re paying dearly for it)?

It’s ok if you don’t have these answers yet. I’m still figuring them out myself. But in the end, we academics are goal-oriented people. To stick it through with this journey — even when you’re stressed about your course evaluations or your grant’s impact score and can’t be bothered, even when you have setbacks — you need to know why you’re taking it.

Now that you have a rough idea of your goals, you need to think about how your money can help you achieve them. Those problems, stressors, family impacts, and foregone experiences can to varying degrees be solved with money in the form of income or wealth. So to know what you need to do to address these issues and build the life you want, you need to know your numbers.

Know thy numbers.

The easiest and most important step you can start with is just looking at your money. The simplest way is to break into four main parts:

  1. Total monthly income
  2. Total monthly spending
  3. Total asset value
  4. Total debt (and interest rates)

You’ll need to assign a number or range to each of those components to really know where you stand today. Let’s find this information and write them down in a spreadsheet or on a pad of paper, one at a time.

1. Total monthly income

You’ll never get ahead if you spend more than you earn, so the first thing you need to know is how much you earn. For many likely readers of this blog, that’s simple — it’s your graduate stipend, or the prevailing postdoc salary, or your 9-month contract salary plus any expected summer salary. Of course if you do outside consulting, have a second job, or are adjuncting for multiple universities, it can obviously be more complicated.

In the simpler one-job situation, go find your pay stub from December of last year. It should be available online through your university’s HR portal — at my university, it’s Workday. After you login, the splash page should prominently feature ‘My Paystubs’ button or something similar. When I click through, I see a list of my last 66 paystubs. I click on December of last year, look for the “Gross Pay” column, and find the YTD (Year to Date) row. I put that down in one row of my spreadsheet. I also note my take home pay under the “Net Pay” column. I write this down too (because I’m seeing where my money is going right now), but remember that this is affected by your retirement, health savings, and other pre-tax contributions and can thus be changed. If your take home pay changes significantly through the year (e.g., if you take summer salary or major consulting gigs), note that too and work with the lower end of that range for now.

If you have multiple jobs as an adjunct, you’ll have to gather all of your W2s from last year for your Gross Pay (look at the Social Security Wages column as this doesn’t exclude your deductions), or else search through your bank’s transactions for all your payments.

Through one means or another, by now you should have your gross annual pay and monthly take home pay written down. Now, we need to find out how that compares to your spending.

2. Total monthly spending

This is obviously more complicated since you probably have a lot more individual transactions than paychecks, but thankfully the internet has your back here. In the simplest case, if you have just one checking account and make all your purchases on a debit card or cash, then you can just tally up the negative numbers. If you use a single credit card for all your payments, you could look there too. If you sometimes use cash/check debit and sometimes use multiple credit cards, if you always pay those credit cards off in full out of your checking account, then just count those payments as your expenses using your checking account’s data.

If you use multiple accounts, including credit cards, and don’t always pay them off in full, then it’s more complicated (but even more important to do). Thankfully, there are now several well-established services out there that will aggregate all your financial data into one place. Mint is the most well-known, buty favorite free option for this purpose is Empower Personal Dashboard (previously Just setup an account, setup your account linkages, then go to Banking > Budgeting. This will show you all your transactions for any month that you’ve given them access to. Look at the last several whole months and tally it up into your average total spending per month. If you have big annual expenditures like a tuition bill, membership/credit card fees, or something else predictable but irregular, be sure and include those months in the sample you look at. Enter each month’s total expenditures into the spreadsheet and calculate the mean.

Since many universities force their employees to pay upfront to do their jobs and then lackadaisically get around to eventually paying them back, remove any expenses that were reimbursed (and make sure you remove the reimbursements from your earnings too). We’re focusing on your spending, not your university’s.

Net Income

You now know how much you earn and spend in a given month. Now, you need to compare one to the other to get your net income (or the total amount your net worth increases or decreases due to income/spending in each month). If your take home pay is the same or bigger than your spending, you’re doing ok! If not, your finances are trending in the wrong direction, and we have some work to do. But first, we need the last two numbers to get the full picture.

You can pause here if you want because these are the two most important numbers in personal finance. Knowing them is the beginning of getting your finances under control. So great job! But, we still need to calculate two more numbers to get a complete picture of your finances today.

3. Total asset value

Luckily this might be easier, unless you’re so wealthy that you probably don’t need to read this post. If you’re like the rest of us, any financial assets you own will be bound up in some combination of four assets:

  1. Home equity
  2. Car equity
  3. Cash savings
  4. Investments

If all your accounts are digitized, you can give Empower Personal Capital the logins to your mortgage, investment, and savings accounts and it will calculate your net worth for you. That probably won’t work for your car loan, but you can enter that manually. If you want or need to do it by hand, though, keep reading this section.

Home equity

This is the total amount you would get back (ignoring agent fees and taxes) if you sold your house today. Obviously you don’t know exactly what it would sell for, but you can make a reasonable guess using two sources. First, look at your last mortgage statement, which will tell you how much of your home’s principal you’ve paid off and the total principal. Second, look up your house on and look at the Zestimate — their best guess of your home’s present value.

For simplicity, let’s assume the Zestimate exactly equals the original principal on your mortgage plus your down payment. Then, your home equity equals the total mortgage principal paid off to date plus your down payment. If the Zestimate is higher than the original principal on the mortgage plus the down payment, congratulations — your home is worth more than when you started. Just take the difference between the Zestimate and the original value of your home and add it to your down payment and principal paid off to date. If your Zestimate is lower than the value of the home when you purchased it, then you need to subtract that difference instead.

Car equity

This is a little trickier. In my experience, very few used cars sell for their Kelly Blue Book value, so the best way to get an estimate here is to solicit a sale quote from or a similar site. (Carmax in my experience honors these quotes, whereas local dealerships may not, so this is a solid source.) This will give you a pretty good idea of what you could sell the car for. Next, if you owe money on your vehicle, see how much you’ve paid off and how much you still owe. Then you calculate your car equity the same way you did for your mortgage — add up how much you’ve paid off in principal and down payment, then compare that to the total loan and how much you could sell it for.

Cash savings

This is easier. Look at any savings accounts (plus more exotic cash-like accounts you may have like money market accounts). Tally them up. That’s your cash savings. If you keep your excess cash in your checking account, you probably shouldn’t, but how much is left there at the end of each month should give you an idea of how much of that amount is actual savings unless you recently got a significant, temporary cash windfall.


This is also pretty easy for most. Just log in to TIAA or whatever brokerage(s) you use and it will tell you on the first page how much your total holdings are currently worth. Put that number in the spreadsheet.

Sum those four numbers together, and you have your total assets. That means you’re halfway to knowing your net worth. To get the other half, we need to look at your debts.

4. Total debt (and interest rates)

This is the total of all the money you’ve promised to pay someone else. Unless it’s an interpersonal loan from a family member or friend, this typically comes with an interest rate, or the amount you pay on top of the amount you owe from the principal for each year you still owe the money. You need both of these numbers to have a clear sense of your debt situation.

Before I go on, I want to remind you that we’re just looking at numbers on a page right now, not subjecting ourselves to judgments or recriminations. If these debt numbers are big, there’s always a path forward. You just need to know what the numbers are before you can chart it, so you need to fight the temptation to look away and put this off for another day. You’re reading this page for a reason — take a breath and keep going. You can do this!

First, make a list of all the people and corporations you may owe money to. Common debts include:

  • Credit card debt
  • Student loan debt
  • Mortgage debt
  • Car loan debt
  • Interpersonal loans
  • Margin loans in your investment accounts

Next, go find the most recent statements for each of these accounts and note how much you owe and the interest rate on the debt. Write them all down. Then tally up the debts.

To go a little further, you could also pull up the same statements from a year ago. Is the total bigger or smaller today than it was a year ago?

Net worth

Your net worth is the total worth of what you own minus your total debts. Again, you would rather this number be positive and large, but for many people it’s low or negative, especially for the young and the structurally disadvantaged. However you got there, it’s important to know.

Next steps

If you’ve followed along this far, congratulations! You now have a clear picture of your current financial situation. You know if you’re earning more than you’re spending, and you know whether selling all your assets could cover all of your debts. Knowing this information will position you to make all of your other decisions from a place of confidence.

If you’re earning more than you’re spending, you should be thinking about how to use the balance to either increase your wealth or improve your life in the present. If you’re spending more than you’re earning, you should be thinking about how to increase your income or decrease your spending. If your assets are worth more than your debts, you want to focus on how to keep increasing that difference, and if your net worth is below 0, you’ll want to know the interest rates on your debt so you can prioritize how to pay them off (generally, highest interest first) and how to decide when to pay off more debt versus adding to your investments (generally, invest if expected returns exceed the debt interest rate, and pay off debt first if not). Lots more on this to come in future posts!

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