The decision to go to graduate school is not an easy one, especially if you have been out of school for some time. While there are numerous decisions to make, such as what to study and what schools best fit your needs, the financial burden of a graduate degree such as an MBA, has been estimated to add up to $200,000 according to Forbes. Given the fact that graduate school is a big financial commitment, once you have made the decision to attend, it is important to set yourself up financially for success. Otherwise your financial failures could spill over to your academics.
Build Your Rainy Day Fund
Remember when you were a young undergrad surviving on Ramen noodles? Well, graduate school is quite similar to those times, especially if you are deciding to return full-time. Graduate school is a commitment in which you are expected to devote quite a bit of time and energy to acquiring new material. This is great, but it means you will spend less time gainfully employed, making money. While many graduate students live off of student loans or grants, it is necessary to also have savings.
By now you should know the importance of a rainy day fund, and this fund becomes extremely important when returning to graduate school. A savings of at least 3-to-6 months will help you get through when you are running low on cash and the rent is due, the car needs repairing, or groceries and textbooks need to be purchased. Even if you have a rainy day fund, it would be wise to pay down or off any credit card debt. Not only will this decrease bills you have to pay while in school, but in case of an emergency your credit card can be a financial resource to draw on.
Never be Afraid to Ask
When it comes to graduate schools, there are far less scholarships and grants than for undergraduate students. However, they are available if you are willing to put in the time to look and apply. The first place to start is your place of employment. Many employers have tuition reimbursement programs for employees who are returning to graduate school part-time. Human resources would be a good place to start in search of these opportunities. For those of you who do not have that option or are returning to school full-time make sure you complete a FAFSA form, and think of your initial financial aid package as a starting point for negotiations.
According to US News, it is important to contact the person who signed your admissions letter, instead of the financial aid office, for good-faith negotiating. You can ask for a reconsideration of your financial aid reward and be willing to provide any material the office may need. Lastly, research, research, research! There are different scholarships and grants that are available for graduate school. You will need to put in the time and effort, but the savings may be worth it.
Do NOT Touch Retirement Savings
This is for those of you who have been working for a period of time years and have set up a retirement fund and 401k. No matter how long you have invested in your retirement fund, the compound interest has already begun to do its job, continue to let it work for you. Even though you may be tempted, DO NOT withdraw money from your 401k or IRA. You will regret it. If you feel there is no other alternative, then it is best to wait another year or you until you have more savings to live off of while in school.
Making the decision to go to grad school is not only a commitment time wise, but also a large financial investment. Sufficient planning ahead, working with admissions personnel to get the right financial aid package, researching grant and scholarship opportunities, and creating enough savings should be enough to get you through the lean years of graduate school. Rest assured in the fact that graduate school is not usually as long as undergrad and you have a better chance of finding employment or getting a raise once you have completed your degree.
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