Things for grant applicants to remember about living expenses
Some grant applicants don’t have much experience estimating how much money they’ll need to live on, so it can be difficult to work out how much grant money to ask for.
Different people need different advice here. Some people are prone to asking for more money than makes sense, while others will be too frugal. Do your best to calibrate.
Some things to remember to factor in:
You will likely be responsible for paying taxes on your grant / stipend, and this will probably be significantly higher than taxes you would pay as an employee (because a self-employed worker makes both the employer and the employee contributions.) This may be due quarterly. Check the website of the tax agency in your country—“self employment tax” may be a useful search term.
If you live in the US or another country without national healthcare, will you need to get your own health insurance? If you are on your parents’ insurance in the US, remember that ends when you turn 26.
Might you need additional private care not covered by your insurance or national healthcare system?
Will you need to make payments on student loans or other loans?
Will you have enough to cover not just basic living costs, but some amount of unplanned expenses like medical bills or car repair?
Will you need work equipment like a laptop or a standing desk?
Will your project involve travel?
Consider getting short-term disability insurance. (You might search for “self employed short term disability.”) This would provide income for around 1-6 months if you can’t work because of illness, surgery, mental illness, or giving birth. Importantly, most policies only cover pregnancy if you start the policy before you are pregnant. Many employers also don’t provide paid leave if you started the job recently. So for example if you plan to have a baby in about a year and don’t expect to get paid parental leave from an employer, you might want to get short-term disability insurance early, because most policies won’t cover pregnancy-related leave for the first 9 or 12 months.
If you know other grantees in your country, you might chat with them about any taxes / insurances they’re aware of relevant to your country.
Other resources:
advice in the comments on this post.
edited to add: more info on grants from Anti Entropy.
A hot take I heard recently that I like but am not yet sure I buy is that asking for more rather than less can make you feel more like an employee and less like a volunteer, and therefore more likely to actually take your work seriously.
There are a lot of great resources for grantees that people posted in the responses to my question a few months ago, “Grantees: how do you structure your finances & career?” (The answers with the most detail are about taxation and other expenses-related stuff. I am still curious to hear more about how being an EA grantee intersects with long-term career planning and other life considerations about things like family, location, etc.)
Thanks, adding to the post!
I recently applied for funding and found it helpful to look at my month to month spending over the last few months. I guessed at a rough mean monthly spending over 6 months but I might have been better off picking a median. I also forgot to account for tax!
Julia—excellent advice.
Also budget for a car and car insurance if you’re planning to live in the US.
The US generally has very bad public transportation, and a very car-centered culture, so you’ll need to buy a used car. Only a few cities in the US are feasible to live without a car (e.g. New York, San Francisco), and most are way too dangerous to use a bicycle for a daily commute.
You can get a decent used car for something around USD $5k to $10k, but bear in mind used car prices are quite high at the moment—about 50% higher than just 2 years ago.
In most areas of the US, I’d recommend something substantially bigger and heavier than UK or European people are used to driving, given the safety concerns. We have a lot of bad drivers, and if you’re into longtermism and longevity, you’ll want to minimize risk of death/disability from car crashes. My heuristic would be, get a vehicle with at least 4,000 pounds mass, 6 airbags, and some active safety features. Bear in mind that gas is much cheaper in the US than in many other countries, so the extra mass doesn’t matter very much in terms of running costs.
This doesn’t seem obvious enough to me to include—I eventually co-owned a car at age 36 but never had one before that (living in suburbs of Philadelphia and Boston). It does seem worth talking to people in the area you plan to live about whether they find it feasible to not own a car.