How to Stay Under Your Business School Budget

You’ve done the hard part of getting into your dream school and as you are eagerly pouring through all the information from your school and the countless google groups that you might be asked to join, there’s probably a question looming over your head – how to keep your MBA within budget.  A quick survey of the 2016 MBA cost is at a jaw dropping $196,102, with ~34% of that going toward non tuition expenses. This already takes into consideration that schools are known to be giving more conservative estimates (i.e., living modest lifestyle) and likely does not include budgets for you to do any sort of country hopping with your classmates.

Why is staying within budget important? While it’s no secret that you are about to make one of the biggest investments of your life, there are some things to keep in mind to help you stay on track and to minimize your post graduate debt load.  Knowing when and if you can spend can help you maximize your business school experience while avoiding any unnecessary anxiety about your financial future.

In short, you know that you are likely going to be inching close to the $200K mark (yikes!), here are a few helpful tips that we’ve learned from our good old days as MBA students to make sure you’re keeping your expenses below the ~34% of non-tuition spend:

  1. Know your budget: I knew it was important that I draw a line for myself so I don’t get carried away. The 34% is about $66k stretched over 18 months for the 2 school calendar years, which is more than enough if you manage it wisely. I personally would recommend checking your spending against your budget on a biweekly basis as a way to stay on track without taking the fun out of your experience and this leads to my next tip…
  2. Know your priorities: knowing why you want to come to business school would help you prioritize where your money should be spent. For example, if your priority is to get a highly coveted internship, then signing up for a trek that gets you time to network with the necessary folks would make a lot of sense. On the flip side, if your priority is to be learning about particularly niche topics that your school excels at, then maybe that extra trip to a different country wouldn’t help further that skill
  3. Don’t fall for FOMO: this is going to be a rampant phenomenon you’re going to experience as soon as you get on campus. Everything from joining clubs, attending social events, signing up for the cross continent treks will cost money and time. Which is why it’s important to map out your calendar for the next 2 years. Figure out early on what it is that you want to focus on.
  4. Look for grants, fellowships, or loan forgiveness: this is especially true if you are going into government or nonprofit, and if you are indeed interested in pursuing these opportunities upon graduation, then you are in luck! Look for opportunities like this here or here.
  5. Seek out Teaching Assistant Opportunities: Many schools offer tuition credits in return for a bit of extra help from you. When I was in school, I took up a TAship for a graduate class but I also looked for opportunities within the broader MIT community and was able to get a 10 hour / week job working for a different department. MIT Sloan happens to offer lots of teaching assistant opportunities which are great ways to reduce the price tag
  6. Make eating in fun again: If you happen to be living close to a Trader Joe’s then you are in luck when it comes to affordable groceries and wine. My roommate and I would make biweekly trips there to stock up on everything from the $3 bottles of wine to staples like orange chicken and frozen vegetables.
  7. Airbnb out your apartment or rent out your parking spot: Definitely consider this option if you can convince your roommate as this was a huge income booster for us since my roommate was also a classmate. We also rented out our spare parking spot which is a bit of extra money for us.

In summary, the positive of this article is that there are many ways to keep your business school experience under your budget and there are also lots of opportunities to generate some excess cash. What’s most important is planning and anticipating where you would need to spend and being intentional about how you spend it.

Last but not least, have fun!

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