Earning your graduate degree could be a necessary step toward reaching your career goal, or you could be doing it to further your opportunities. A master’s degree benefits you in many ways, both personally and professionally. But the thought of taking on a massive debt on top of what you already owe from your undergraduate can make even the most dedicated professional hesitant. To help you get the most out of your degree without going broke, here are five things to consider while coming up with your grad school budget.
Make a Personal Budget
Most budgets don’t work because they fail to actually reflect the lifestyle of the person keeping it. Rather than offering insight and helping you both save and spend better; your budget becomes a senseless spreadsheet of arbitrary expenses and rules you put in place that have no real consequence. Using a personal finance app to build a budget is one way to begin gaining greater clarity with your finances. Before that, though, you need to ask yourself a few questions:
- Is money important to me?
- How does money help and hinder me in reaching my goals or living how I would like?
- How can I prepare to live with money I need but don’t have?
Your responses will help you build money values that guide your budgeting. Some people are intense savers while others are more interested in reducing their overall spending. Living expenses should always be your top priority, but there is a lot of room for flexibility that many grad students fail to take advantage of when they’re trying to stick to a budget for the first time in their lives.
Look at Different Loan Options
There are an overwhelming number of people who choose federal loans because they feel the safest. It’s easy to apply for them, you get a hefty lump sum every few months and there’s a cut-and-dry repayment process that generally leaves you in debt anywhere between 10 to 20 years. But what if there was a way to save money while still gaining plenty to cover the cost of tuition, supplies and the cost of living? Borrowing student loans from a private lender to cover the cost of your MBA or other graduate degree makes all of that possible. Exploring your loan options with different lenders gives you greater control over your financial future, and it can give you greater long-term value than a federal student loan.
Reduce Waste, Not Enjoyment
Rather than cutting yourself off from everything you like that has a price tag, ask yourself where money is being wasted rather than invested. Do you get anything out of your daily convenience store runs? Probably not. But you could gain something out of a weekly brunch date with your close friends or family. Looking for ways to cut back means consuming the things you like in a more productive, prosperous way; it’s not just about going without to see how much you can save if you stretch your willpower far enough.
You need to limit rather than restrict your free spending. Going out with friends on the weekends might keep you sane, but that doesn’t mean it’s okay to dip into your credit card and savings because you’re having fun. Limits allow you to scale your budget according to your current wants, needs and ability. When there’s more cash flowing, you can scale up, but with good boundaries in check, you’ll never be at risk of going over how much you’re comfortable giving away.
Think About Your Goals
Do you want to buy a house in a few years, or maybe just move out of your parents’ place for the first time? You could be thinking about getting a roommate, buying a new car or even getting a cat. There are plenty of financial goals to consider that can make budgeting as a grad student feel more purposeful. Rather than looking for all the reasons why you shouldn’t spend now, think of reasons why it would be better to save up instead. You should have a mix of both big and small goals that keep you inspired and motivated on the day-to-day. When you feel like you are reaching toward something that’s both possible and tangible, you’ll be less likely to cave when temptation rises.