The MBA is becoming an increasingly ubiquitous component of the business landscape, and as it does so, more and more students are confronting the astronomical costs of the degree. Between all the costs of education itself, plus the costs of living (often for the student and his or her family) and the costs of business school’s extracurriculars (conferences, retreats, banquets, dinners upon dinners, clothes to wear to all of them, etc.), many students spend £40-60,000 per year.
The costs of admission seem prohibitive to many—especially those who haven’t had the good fortune to save a lot of money before starting their business education. We hate the idea that anyone meant for a career in business would give up on their educational dreams because they couldn’t make the numbers work. So we’ve come up with a list of things you should start doing and thinking about before you start your MBA to help afford the education you’re meant to have.
Save Save Save
Seriously, we’ll say it again: save. Save whatever you can before the degree. If you know today you’ll be getting an MBA at any point in your life, the right time to start saving is yesterday. If you go to school full-time, you will probably be giving up most if not all of the time and labor you would otherwise be using to earn an income. Spending a little extra money to order dinner instead of making something at home seems justifiable now if you have money coming in—but once you go to school and lose that income, you’ll regret most of the money you’ve ever spent.
Learn to cook
This is another important lesson that most people don’t take seriously enough. Learning to prepare food for yourself (as opposed to buying prepared or overly processed food) will help keep you healthier—but it will also work to keep your budget as lean and healthy as your midsection. Making food fresh can make a huge financial difference. This will help you save money now—and when you’re in school, potentially taking on debt, and earning no money, you’ll be grateful for all the money-saving skills you learned ahead of time.
Learn to budget
Study your own finances—and not only because it will be good practice for the work you’ll be doing in b-school and the business world outside that. But also because you will be running much tighter margins with your personal finances when you go to b-school, and you’ll want to do everything you can to minimize expenses and maximize savings. This is especially important if you are currently earning more income than you need—it becomes very easy to spend much more money than you realize.
Secure and multiply your income streams
You likely won’t have much time to work for pay while you’re enrolled in b-school. So any kind of investment of labor or capital you can make now that will provide you continued (and passive) income while you’re in school will make a big difference in your finances during school (and afterward).
Real estate investments are one common way people put savings toward future income streams. Even if you can’t afford to buy property, you still might be able to take on some version of this idea. You can rent out extra couches, beds, and rooms in your place on Airbnb, for instance (and as you prepare to move to a new place for business school, you might consider looking for a place with an extra bedroom for this reason).
Owning a car is another way to generate extra marginal income. You can always drive for Lyft in your spare hours—before and during your MBA. You can also rent your car out to others on an app like Getaround for more passive income.
And finally, investigate other ways you can provide yourself with a flexible income stream that you can tap into as soon as you go to school. If you have a job you’ll be leaving in order to attend school, maybe there’s remote work you can continue to do part-time. Or maybe you can build other skills to monetize—anything from freelance grant writing to making & selling artisanal jewelry to delivering food on your bicycle (which combines exercise and labor for double efficiency). Or you can even pay extra attention during your GMAT prep and tutor other prospective b-school students in your spare time.
GMAT prep essential – but it doesn’t have to break the bank
For many pre-MBA students, preparing for the GMAT consumes much if not most of their intellectual resources. We think that’s great, but that doesn’t mean it should consume most of their financial resources. There are plenty of expensive options available for those willing to spend the money—there are virtually limitless test prep materials on the market, in addition to high-end personal tutors and group GMAT classes. These are all great things to do, but for many students the expense is prohibitive—and even students who can afford expensive GMAT prep before their MBA might come to regret the expense once their tuition bills come due.
This is one area where you can and should take advantage of technology. Human tutors were a great alternative to learning by yourself from a book—but new kinds of software like examPAL can provide a free GMAT course, and bring you the personalized education of one-on-one tutoring, plus the intellectual resources of larger test-prep suppliers, for not much more than the cost of studying by yourself out of a textbook.
Investigate every possible scholarship and fellowship
B-school doesn’t necessarily offer the best financing in the academic landscape—many business schools are very much aware that they are providing premium education to potential top earners, and charge students as much as they can in accordance with this. But there are certainly some scholarships and fellowships available and tools for finding them.
Many of these funding opportunities are specific to each school you apply to. To that end, we highly recommend building a positive relationship with admissions officials and members of the b-school’s administration during the application process. The admissions committee has all the information and has some significant influence on the allocation of different kinds of funding.
Get to know the admissions staff at the institutions you’re interested in, and find out what information you can on the different ways students at each particular school manage to fund their costs of education. Also be sure to find out what you can about the kinds of applicants that tend to receive available funding, so you can cultivate your application accordingly.
Become the best possible applicant
To some extent, financing your education (and planning your life in general) involves the not-fully-resolvable tension between the things you can and can’t control. You might not be able to do a great deal to secure ongoing income while you earn your degree. If that’s the case, then you should put more effort into the things you have some ability to influence.
Making yourself the best possible applicant will help maximize your chances of securing funding for your education—it will also help you get into the possible school and secure the best possible options for your career (and financial situation) after graduation.
To that end, your greatest personal resources are your time, your attention, and your (willingness/ability to put in) effort. One obvious thing you can do is try everything possible to maximize your score on the GMAT (that is, the Graduate Management Admission Test, the exam virtually all MBA programs use to evaluate applicants. You can also try to secure the kinds of experiences admissions committees find valuable—including personal, professional, and educational experiences. These will vary somewhat by institution and industry, which is another reason why it helps to research schools and funding opportunities in as much detail as possible.
Consider Online Degree
If you’re set on getting an MBA, another option to consider to save money may be an online MBA program. While online colleges and universities are not always cheaper, most universities that offer online degree programs tend to be cheaper than a traditional college education. Online-only schools for instance have fewer expenses. Without property, educational buildings, and in-person faculty and support staff, they’re able to offer more affordable tuition rates. The average student can spend hundreds of dollars less per college credit with an online program. However, online MBA programs aren’t always cheater than their brick-and-mortar competitors. Even so, if you opt to get your MBA online you’re still saving travel costs and possibly costs of living depending on where you attend school.
Remember, being cheap doesn’t have to be boring. You’ll be surprised how easily you can make a game out of spending as little and saving as much as possible. And very often, prioritizing this will force you into new and potentially creative opportunities. Follow your grandmother’s advice and never say no to a free meal—this will lead to meeting and learning from people you never would have otherwise (this is an especially easy thing to do if you’re already on a college campus, where the opportunities for free food are abundant).
If you’re out of school and in the trenches of adult life already, make team up with friends to make a shared project of saving. Consider starting a meal-prep group with other budget-minded friends (everyone makes five-to-seven days worth of some meal and exchanges their meals with the other people in the group, so people have a different homemade meal for every day of the week.
And don’t be afraid to try your hand at selling your old things! You’d be surprised how many things there are around the house that you never think about and that could fetch you an extra £5-20. Plus–and if you only take one lesson away from this article, let this be it–when it comes time to move, you’ll be grateful for everything you’ve ever gotten rid of.