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By Kathryn Pins
After working for a few years, you are ready to take your career to the next level. Many adults go back to school to earn more, change industries, or simply better themselves through education. Whatever your goals, graduate school is a big financial investment. Let’s look at some ways you can financially prepare yourself for your advanced degree.
Research is important in understanding your potential expenses. First, know the actual cost of tuition each year. Many websites share an estimated cost of tuition. If you cannot find an exact number, call the university. Ask for the past semester’s tuition including fees and remember that tuition only goes up. So, consider that when you take a look at the yearly cost of your education.
In addition to tuition, consider added expenses such as books, any additional living expenses, and your income. Ask yourself, will I be working while in school? If you’re not planning on working, your loss of income should also be included in your calculation. For example, you currently make $90,000 a year and your plan is to work toward an MBA for two years. If you go to school full-time, you will lose $180,000 in income.
Don’t let all the expenses scare you. Now that you know what you need, you can create your plan. Set a timeline for when you would like to start your advanced degree. During that time, start saving.
You will need to cut some costs. Evaluate some of the expenses that have made their way into your daily routine, such as music subscriptions, eating out, and shopping. There may also be some big expenses that you will need to evaluate. For example, if you are renting, consider getting a roommate or switching to something smaller to cut costs. Find ways to stick to this new financial goal.
You may already have some money saved. If you have a year or more until you need the cash, put it in a certificate so that it earns more interest.
Finally, start researching your student loan options. Since you are putting together a savvy budget already, pick a plan that won’t penalize you for paying off the loan early. It’s also helpful if your student loan gives you an option to defer payments. This option will let you get your feet on the ground after graduation. If you will not be working while in school, find a loan that can be used for other expenses. The expenses associated with a graduate degree are more than just tuition. There are also costs related to travel, rent, books, and meals.
So now you’ve determined how you will pay for it. Next, answer “Is an advanced degree worth the cost?” Once you feel confident in getting your degree, you can jump right in! Graduate school can be a very rewarding experience. Get excited about it and find the program that is right for you.
Kathryn Pins is a marketing content specialist at Alliant. She’s passionate about finding and communicating meaningful financial information with Money Mentor readers. Kathryn is a saver who gets more excited about certificates and her Roth IRA than shopping. When she does spend her earnings, it’s on furthering her education, travel, unique experiences, and loved ones.