The New Year is drawing nigh, and we’re brimming with resolutions. One of the New Year’s resolutions that we’ve heard most frequently is the desire to go back to school. Oh man, you murmur, grad school is expensive.
The current economy has inspired many of our friends to hit the books once more. Whether they’re running away from the job market or trying to gain a competitive edge in a cutthroat world, their resolutions are visible enough in their piles of GRE, GMAT, and LSAT books.
“Everyone’s doing it!” isn’t enough reason to run back through the ivory gates. Grad school is a pricey undertaking, and it might not be right for everyone.
We spoke with Stuart Ritter, a certified financial planner for T. Rowe Price. He told us reassuringly, “The process is surprisingly straightforward.”
Okay, Stuart, so what do we do?
He suggests we sit down with a piece of paper, a pen and a solid idea of our finances. Make two columns, he says. Label one “income” and the other “expenses.” Write down every single expense you have, from transportation costs to pet care to sports leagues. Fill out each column, add each one up, and make sure that “expenses” is not higher than “income.” Ritter says, “If they don’t match, you can’t go.”
When writing out your income, remember that it’s more than simply the salary that you may or may not be earning at work. It will also include any loans that you will take out, and any scholarships you may receive.
At the same time, the expense column must be filled with more than just the cost of tuition. Consider where you will live, the money that you will spend on food, books and extra-curricular activities. Also, don’t forget to budget for unexpected expenses like car troubles, broken laptops, trips home or even friends’ weddings that you must attend.
“You must plan for something unexpected to happen every month that will cost you a couple hundred dollars,” says Ritter. “If you build it into your budget, you’re covered.”
There are ways that people can manipulate their finances to make graduate school a reality. For instance, it may be necessary to choose an apartment with lower rent.