Life as an MBA student isn’t easy.
Between keeping up with your studies and classes, trying to plan for a career and carving out a little space for your social life, there often isn’t much time left to go around. It’s easy to fall into the trap of neglecting some of your other responsibilities, including managing your personal finances. However, spending time now to get your financial house in order will pay off greatly down the road, especially when it comes to your personal credit and student debts. Follow the six simple tips below to make sure you’re staying on the right track while you work toward your degree.
1. Mind Your Credit
You probably already know the importance of keeping tabs on your credit score, but regularly monitoring your full credit report is even more essential. This is especially true for new MBA students, as deciding to attend business school often comes with a number of significant life changes. Many of these, such as taking out loans, opening and closing bank accounts and changing jobs, could leave you more vulnerable to identity theft. Regularly checking your credit reports allows you to not only stay on top of any suspicious activity but also spot any mistakes that could potentially damage your credit.
2. Budget With Purpose
Creating and sticking to a budget is central to maintaining good finances, but as an aspiring MBA, you can take it to the next level. When you craft your personal budget, do so with clear goals in mind. Target a specific date by which you’d like to pay off your student loans. Set realistic goals for how much money you’d like to save each month. By being as precise as possible about your earnings, your expenses and your goals, you’ll give yourself the best opportunity to make the most of every cent you earn. Not to mention it’s good practice for your career!
3. Refinance Your Student Loans
Pursuing an MBA doesn’t come cheap. If you’ve got significant student debts hanging over your head, consider checking into your options for refinancing at lower interest. A refinanced loan could reduce your monthly payments and allow you to pay down your debts more quickly, and you may not even need to wait until after graduation. If you can snag an offer from an employer at a verified income level, some institutions will allow you to refinance even if you haven’t begun working.
4. Cash in on Student Discounts
No student can afford to pass up savings, and an MBA is no exception. Fortunately, your student identification also serves as one of your most powerful money-saving tools. From movies and sporting events to car insurance and plane tickets, you might be surprised at how many things you can get at a discount simply by flashing your student ID. Many subscription services, from Spotify to various news outlets, also offer better rates to students. Even if no discount is advertised, it doesn’t hurt to ask before you commit to a purchase.
5. Use Credit Cards Selectively
With often sky-high interest rates and harsh penalties, credit cards have earned a bit of a bad rap in recent years. It’s not entirely unearned, but the truth is credit cards are great financial tools – if used properly. A card is a good fallback option to cover small expenses until your next payday, and it can be used to quickly build up your credit history if you use it responsibly by paying your balance in full every month. If you’re planning to do any traveling in the near future, consider shopping around for a card with no foreign transaction fees. Otherwise, those charges can really add up over the course of even a short trip.
6. Build a Safety Net
The best-laid plans, as they say, often go awry. No matter how well you plan and stick to your budget, there’s always a chance that unforeseen circumstances—whether it’s an illness or accident, a vehicle breakdown, a job loss or something else entirely—can quickly leave you in a financial bind. Do yourself a favor and factor some extra savings into your budget each month with the aim of building a decent financial safety net, but be sure not to touch the money unless you absolutely must.
The average cost of an MBA ranges from $75,000 to $100,000 for tuition alone. Factor in secondary expenses, possible lost wages and other considerations and that figure could potentially balloon to a quarter of a million dollars or more. That’s a lot for anyone to handle without even considering the stress and work associated with pursuing the degree. However, by implementing the tips above and practicing good financial habits, you can keep your house in order and position yourself to succeed both during school and after graduation.
Maricel Tabalba is a freelance contributor for Credit.com who is interested in writing about personal finance for millennials and college students. She earned her Bachelor of Arts in English with a minor in Communication from the University of Illinois at Chicago.