Well Heeled Blog > 2011 > September

We Saved $2,000 On Our Honeymoon Airfare

Written by on · 19 Comments

Credit cards and I have always had an amicable relationship bound by mutual expectations: I pay on time, they give me rewards. Recently, though I’ve realized that I really have not been taking advantage of all the great things that can happen with credit cards.

In this case, a good thing is my honeymoon airfare. For two round-trip flights from Los Angeles to Buenos Aires, business class on the outbound flight and economy class on the return flight, I paid $418.20. Per Kayak.com, the cheapest flights on those dates would be $1,205 per person, economy class. For a mixed flight like ours (business class one-way and economy the other), the cost was $1,800 per person.

For airfare that would cost at least $2,400 for the both of us, we paid just over $400. A $2,000 saving does wonders for our honeymoon budget. All thanks to British Airways Chase credit card and the 100,000 miles sign-on bonus I picked up in May. Even if I include the $95 annual credit card fee in the airfare, it would still be just over $500 for two people, an incredible deal.

I’ve had my first taste of points experience and I think I’m hooked! I never really signed up for credit cards for the bonuses before, but I think I am a changed women. My Blog Reader is now filled with points and miles blogs such as The Points Guy, Million Mile Secrets, Mommy Points, Help Me Travel Cheap, and Frugal Travel Guy.

The Points Guy’s guide on British Airways miles helped me figure out how to book an award (and convinced me to do so before November 12, which is when a big devaluation on British Airways miles is supposedly due). After 2 hours of playing with dates on the British Airways website, I finally found this deal…. with the departure date a full week-and-a-half after our wedding date. A small hiccup, but for less than $250 per person I can wait a few days to go on our honeymoon.

Change of Plans for Honeymoon

Written by on · 7 Comments

buenos aires Change of Plans for Honeymoon

We finally, absolutely, unequivocally decided on our honeymoon destination. Originally, we planned on Turkey. I had visions of flying in hot air balloons over the lunar landscape of Cappadocia, but ultimately we decided it would cost a little bit more than we are comfortable with at this point. I definitely plan to go in the future when we have a bit more time (and, er, money). Instead, we are going somewhere where our dollars will stretch a little farther.

The Plan

We are spending 9 days and nights in Argentina, with the majority of the trip spent in Buenos Aires – the “Paris of the South” and a couple of days in Iguazu Falls – “Big Water.” We will also spend a day at an estancia – a ranch where guests can go horseback riding and feast on steaks and empanadas.

I spent several months in Buenos Aires when I was in college, so I have extremely fond memories of how good great increíble the cuisine is. Which is one of the reasons we chose Argentina as our honeymoon destination. From buttery croissants and creamy gelato to melt-in-your-mouth osso buco and grilled meats of all types and stripes, all at very inexpensive prices when compared to comparable restaurants in the U.S., Buenos Aires is an eater’s dream.

The Budget

I still have to write out a budget for the trip, but thanks to a very favorable airfare, I think we will be able to keep this entire trip at $4,000, with 1/4 of that budget going to the Iguazu Falls excursion. Domestic flights in Argentina is killer for foreign tourists.

The Argentine peso to the dollar is at 4 to 1 right now, so even though Buenos Aires is not the bargain it once was, it’s still a pretty good deal!

The Feeling

The flights are booked. The dates are marked on my calendar. I can already taste the sizzling steak… just 8 more months until I am married and living la vida sabrosa!

photo credit: David Berkowitz via Flickr

How Much To Spend on Wedding Gifts?

Written by on · 20 Comments

They say that your 20s and 30s are the “wedding season” because of all your friends getting married! With weddings come not only celebration and merriment, but also the question of how much to spend on wedding gifts? 

In a few weeks CB and I will be attending a wedding of his coworker and friend (the one who has a honeymoon registry), and we have to decide on how much we should spend as a gift. Do we take into consideration what it would cost to feed and entertain us at the wedding, the groom’s relationship with CB, the fact that I don’t really know the couple, or all of the above? Here are some questions that we asked ourselves when it comes to wedding gift budget.

  • How close are we to the bride and groom? Are we siblings, cousins, close friends, casual friends, coworkers, strangers we bumped into on the street? (just kidding about the last one!) The closer we are, the more I’d be inclined to give as a gift. Also , are we both close to the bride and groom? Or would one of us be more like a “plus one”?
  • What’s my budget? The gifts I gave as a college student were very different than what I am giving as a working professional. The gifts I will give after I have a mountain of student debt from graduate school will probably be less expensive than what I can give after I’ve paid off that debt.
  • Are we attending the wedding? If we can’t make the event, we’ll still send something, but most likely it wouldn’t be as much as if we were to attend the wedding. Unless we are family members, then I would probably give the same amount regardless.
  • Is it a destination wedding? If we were to go to a destination wedding, we’d likely give a lower amount because of the increased travel expenses. Most brides and grooms will understand that a destination wedding means fewer gifts.
  • What’s the cost per plate? Cost per plate won’t dictate how much I spend, but I obviously do think about it. On the one hand, weddings are not an admissions event and guests shouldn’t be expected to pony up more cash/gifts if the couple decide to have an expensive affair. On the other hand, if I am a beneficiary of the great food, live music, dancing, etc. that a wedding provides, I do feel an obligation to give a certain amount.

The etiquette guru Emily Post says, “There is no rule, so it is entirely up to you. Let your affection for the bride and groom and your budget be your guide,” which to me sounds like a lovely thought. I think it’s important to be generous with others, but no one should go into debt or jeopardize his or her financial situation for a gift.

In the end, we decided to give the bride & groom $100. If we cannot go to the wedding, we would have sent a card with a check for a lower amount. If we were both closer friends with the couple, we would have given more. If we were going to the wedding of a family member, we would have given much more.

How do you decide how much to spend on wedding gifts? What have you spent on wedding gifts in the past?

Wedding Flowers: I Dream of Peony

Written by on · 17 Comments

When I first got engaged, I was completely cool and collected and budget-savvy about wedding flowers. After all, why pay a load of cash for something that will look pretty for a few hours before drying and browning as flowers are wont to do?

Perhaps I was a touch over-confident. While scrolling through some wedding websites today, I happened upon pictures of pink peonies. Just look at this beautiful bouquet (via The Knot).

pink peonies with white ribbon Wedding Flowers: I Dream of Peony

All of a sudden, I went from “don’t care about flowers” to “must have peonies – fields of peonies.” Lush, romantic, and fragrant, the peony is an important flower in my country of origin. We are not incorporating any of my heritage into the wedding (no tea ceremony, for example), so peonies would be a nice touch, even if no one else sees anything but pretty blooms. Everything I’ve read about the flower makes me love it more.

Everything, that is, except the price. As I’ve learned in my crash course into peonies, this flower only blooms from late April to early June, and can cost up to $12 per stem because of its limited supply and popularity with brides. I am getting married in early June, so I should be at the tail end of the peony season. If I’m lucky, Trader Joe will sell a bouquet of 5 stems for $7 or $8.

So the plan is this: I am trekking to the LA Flower District the day before the wedding. I am going to have with me $200 in cash, a couple of friends, several buckets, and a cart. And I am going to pick out cabbage roses and peonies in shades of pink, dusty rose, and mauve. At the very least, I’m going to get enough peonies to make the bridal bouquet!

Get the Best Deal: Ask for Price Adjustment

Written by on · 16 Comments

Do you ever make a purchase and a day or two later, realize that the item is on sale for cheaper than you had bought it for? That has happened to me more than once. Fortunately, most retailers have a price adjustment policy, so getting a lower price might be as easy as making a phone call or sending an email.

How to get a price adjustment

  • Check the policies. Some places allow a price adjustment within 7 days of purchase, others give you 2 weeks or more. Sometimes price adjustments can only occur on non-sale items or non-final sale items.
  • Request the adjustment. Companies won’t do it unless you ask. Many stores will accept a request via email. If not, I find that a quick call to the customer service department works wonders. Be sure to have the order number on hand for a quick resolution
  • If you are not sure of the policy (or even if the company doesn’t have a policy), it never hurts to ask. Reiterate how much you enjoy buying from the company, and that you’d like to receive a price adjustment.
  • If all else fails, see if you can make a purchase at the new lower price and return the item purchased at the higher price. Make sure that the item you ordered can be returned for a refund if you decide to go this route.

Just yesterday evening, I realized that a little black dress I ordered from Gap last weekend has dropped in price from $59.99 to $44.99. Plus, there was a new 30% off coupon to boot! Of course, I immediately called to request a price adjustment. The customer representative couldn’t match the new price with the coupon, so she ordered me a new dress and told me I can return the previous order for a refund. It will take a little extra legwork on my end, but I don’t mind. That extra savings immediately went to a delicious Chinese dinner last night!

Savers (This One Included!) Frustrated By Low Interest Rates

Written by on · 13 Comments

Remember the good ol’ days of 2006 and 2007, when interest rates climbed to 5% and banks were falling over one another to provide the highest rates to savers? With every little effort, my cash were earning 4%+ in saving accounts, and I had a few CDs that earned 5%.

With interest rates barely at 1% now, today’s savers are facing a very different reality. According to the Los Angeles Times:

The Federal Reserve has dropped interest rates to historically low levels in hopes of resuscitating the ailing economy. That’s been a boon for borrowers taking out auto or home loans, and a salve for banks still trying to recover from the global financial crisis three years ago.

But for savers, the microscopic yields are the equivalent of a migraine. They’re especially hard on the elderly, many of whom rely on steady interest income to pay routine living expenses.

And the lack of interest income will ultimately take its toll on the sputtering economy: Americans will hold back spending because they aren’t making as much money off their low-rate accounts. Consumer spending accounts for about 70% of the U.S. economy.

So what’s a frustrated saver to do? The same LA Times article mentioned some folks who have cashed out to purchase gold, or to make other alternative investments in search of a higher yield. In my case, the answer is “what can I do?”

It’s too risky to put my short-term savings anywhere but money market funds and savings accounts. At this point, my first priority is capital preservation and liquidity. My non-retirement savings are in a prime money market fund, while the rest are with a big bank’s saving account, earning a paltry 0.95%. Even online banks’ rates aren’t much better. I believe ING is currently offering 1% on their Orange Saving Accounts.

Compared to the folks in retirement who depend on their saving accounts for living expenses, I’m lucky. A decrease from 5% to 1% interest rate didn’t affect my standard of living. It is still frustrating that my cash is losing value with every passing moment – after all, the inflation rate is almost 4% right now. But I have to hold on to the cash. So I suppose all I can do is to sit tight.

Savers, are you doing anything about the low interest rates? Has it affected your spending or retirement plans?

Honeymoon Registries – Brilliant or Tacky?

Written by on · 45 Comments

In the past few years, honeymoon registries have become more and more popular. The wedding registry has been historically a way for guests to send off the newly-married couple with items to set up their household. But with more couples living together before marriage, some would rather their guests send them to China than give them a set of china.

Honeymoon registries – the basics

In a honeymoon registry, the bride and groom can list what activities or travel components they’d like to have paid for (hotel stays, romantic dinners for two, flights to the destination, etc.) and guests can contribute money for the couple to spend on these activities. Although some registries run by specific travel agencies or resorts allow guests to directly purchase a package or a room, most honeymoon registries are essentially cash registries.

The guest gives the bride and groom cash (perhaps with a nice note on what it’s intended for), with the understanding that this cash gift will go towards an experience listed on the registry. A slew of websites offer honeymoon registry services. Some of the biggest ones include Honeyfund, Honeymoon Wishes, Traveler’s Joy, and HoneyLuna. Some sites charge fees to the guests, others to the bride and groom.

Honeymoon registries – brilliant or tacky?

Some people think that honeymoon registries are a breach of etiquette, because the couple is basically asking for cash for a vacation. I understand that position, but I don’t feel that way.

  • I don’t see a difference between a traditional registry vs. a honeymoon registry. In both cases, the couple is making a suggestion to guests on what they’d like as gifts. A a guest, I don’t care if I spend my money on a physical present or a gift of experience – I just want to get something that the couple will enjoy. If they would rather have money for a brunch than a toaster, I am perfectly fine with that. (Also, I grew up in a culture where cash gifts are the standard for weddings).
  • Some couples specifically plan to return gifts for refunds, which strikes me as just a roundabout way of getting cash without asking for it.

In fact, CB’s coworker registered at Honeyfund for his upcoming wedding. We will be giving them money for a travel experience. I don’t even particularly care if they use the money for something other than the stated registry item – I know the gift will be appreciated no matter what they use it on.

The ease of using the HoneyFund has made me think about setting up a honeymoon registry for my wedding. I think most of my family and friends would be fine with that. But just in case, CB and I will also add a registry at Target or Bed Bath & Beyond for folks who would prefer a something more traditional. I do think that as time goes on, a honeymoon registry will become more and more accepted. As a guest and as a bride-to-be, my vote on honeymoon registries is definitely for Brilliant!

What do you think of honeymoon registries? Did you/would you have one? As a guest, would you be offended by a honeymoon registry?

X-Ray Your Investment Portfolio

Written by on · 3 Comments

What does a retirement investment portfolio and mystery meat have in common?

I’m not sure what animal products mystery meat is made of (and not sure I want to know…), and I wasn’t clear on what investments make up my retirement portfolio. When I first started investing in 2006, I had one retirement vehicle – a Roth IRA – and one fund in that vehicle – a 2050 Target Retirement Fund.

Since then, I’ve added different funds. With a 401K (stock and bond funds via American Funds), a Roth IRA (international stock index, U.S. stock index, U.S. bond fund), a Rollover IRA (international stock index and U.S. stock index), and a SEP IRA (Vanguard STAR Fund), it’s a little confusing to me what my portfolio actually composes of. Do I have enough stocks? Bonds? What is the split between my international and domestic equities? What sectors am I invested in? Who knows!

Figuring out what’s in my portfolio

Fortunately, Morningstar has an easy and free tool made for folks like me. It’s called the Instant X-Ray, which, as the name implies, “x-rays” your portfolio to show you what’s really in there. All I had to do was to input the ticker symbols of my funds and my current balance, and voila! The website spits out a set of handy graphs and charts with details on different characteristic of my funds (stock vs bond, geography, growth vs. value, etc.)

This tool would be even more helpful for folks who have portfolios of greater complexity. Say you have individual stock funds, or Treasuries, or are part of a couple with several funds between the two partners. The Instant X-Ray would help you see what you actually have in your portfolio.

investment asset allocation X Ray Your Investment Portfolio

Armed with this information, I can re-balance to my desired asset allocation. I thought I was at 80% stock / 20% bond mix, but as you can see, I am actually at 70% stock / 30% bond. Now, when I make new Roth IRA contributions, I only contribute to my stock funds. That way I can slowly bring up my equities portion until I read the 80/20 split. If I didn’t have the Instant X-Ray, I probably would have gone on dividing my contributions between stock and bonds.

On the whole, I am comfortable with my investments. Nothing too exotic, nothing wildly out of sync with the broader market (which would make sense as I invest mostly in index funds). I plan on checking my investments every 12 months or so so I can make sure they are appropriately balanced. As my portfolio grows, I plan to add in a REIT fund and a small cap fund.

Do you know what’s in your retirement portfolio? Did your findings surprise you?

Wedding Shoes

Written by on · 14 Comments

The wedding expenses keep growing… slowly but steadily! With my purchase of a pair of pink satin shoes, I can now check one more item off my list. And the best part is, these shoes were marked down to just $20 plus tax because they were on clearance.steve madden gramicy pink heels 2 Wedding ShoesI had originally planned to spend $50-$100 on shoes for the wedding, so I came way under budget. Now, my wedding expenses stand at $1,253. After reading several bridal magazines sent to me courtesy of friends and family, I am becoming influenced by all the beautiful things I am seeing! Even though bridal magazines (ahem hello Martha Stewart Weddings) are full of dresses, flowers, and venues that I cannot afford, I do like the pretty pictures inspiration.

Travel Planning – the costs add up!

Written by on · 20 Comments

coins 300x199 Travel Planning the costs add up!Do you ever think that you are doing a great job keeping costs down on an upcoming trip, but once you’ve added up everything, you think – wow that’s a lot of money! CB and I are planning a trip to Boston area for me to interview at a business school and then to spend a few days playing tourist. We first went to Boston almost exactly a year ago to visit CB’s prospective graduate program, so I am really excited to come back to the city.

Here is our budget for Boston:

Total estimated cost of trip: ~$1,500

*Eye pop*

When I look at the elements of the trip individually, they don’t look unreasonable. In fact, I was almost patting myself on the shoulder for managing to (a) find a red-eye from the West Coast to Boston so that we wouldn’t have to pay for a hotel Thursday night, (b) buy tickets that were less than $350 per person, (c) use points to get a free night at a hotel, (4) resist the nice $200+ hotels and instead stay in a small guest house with shared baths.

I love to visit different places, but no matter how carefully I budget individual pieces, somehow the sum of trip just seem so much higher than the costs of its parts. Do you ever get sticker shock once you get to the total cost of a trip?

photo credit: rachel titiriga via Flickr

 

Buying Used Car vs. Long-Term Rental

Written by on · Leave a Comment

This is a paid post.

One of my friends has recently gotten an internship in a distant city. She needs a car to get around – public transportation is woefully lacking for daily travel – and she doesn’t have a car to bring to this new city. So, her choices are to check out used cars for sale, buy a car for the duration of the internship, and then sell it later, or use a long term van hire rental.

I encountered a similar situation when I went on an internship in college. In that case, I rented a car because I didn’t want to deal with the hassles of buying and then selling a used car. But the a coworker bought a used car, which he later successfully resold at the end of the internship.

Rent a car if: you want a no-commitment vehicle. Many rental agencies will also offer you insurance, which may be in addition to or supplement coverage provided on your credit card / current car insurance (if you have it).

Buy a used car if: you can find a good deal on a reliable used car and expect to be in the area for a longer period of time. You might be able to sell the car for the same price you purchased it for, but you have to be prepared for the possibility that you can’t sell the car in a timely manner.

Rebecca Minkoff Beau Clutch: Yay or Nay?

Written by on · 15 Comments

Remember these previous Yay or Nays when you guys talked me out of unnecessary / unflattering items? Well, this time I am in need of your advice again. I see this Rebecca Minkoff Beau Clutch for $150 at a local Nordstrom Rack. In real life, the bag is a little bit more orange-toned than it appears in the picture. I like the size and the length of the strap (it’s a bit shorter, good for petite gals), and the leather seems to be very nice quality.

Do I need it? Of course not. Do I want it? Well, yes, yes I do. I love red purses and clutches, and I’ve heard good things about Rebecca Minkoff.

Yay or Nay, what says you?

rebecca minkoff beau clutch 300x225 Rebecca Minkoff Beau Clutch: Yay or Nay?rebecca minkoff beau clutch front 300x225 Rebecca Minkoff Beau Clutch: Yay or Nay?

 photo credit: Zappos.com

Fit Your Credit Card to Your Lifestyle

Written by on · 12 Comments

Credit cards can be an incredible tool in managing one’s finances (if used responsibly). Ever since I’ve gotten my first credit card my senior year of college, I’ve appreciated these little slips of plastic. I get great rewards, fraud protection, and additional insurance / warranties on purchases and car rentals.

When I am in the market for a new credit card, I try to take the time to find the best credit cards for my lifestyle and spending patterns. A consultant who travels every week for business should get a frequent flier card that will provide the best perks and most upgrades. A big family may do best with a card that provides a high cash back ratio at grocery stores. Someone who keeps a balance on their card should look for one with low interest rates.

Right now, I have two credit cards that I use the most frequently – a Citi Visa that gives me great rewards (namely, Sephora gift cards), and a British Airways card that I got when a 100,000 miles sign-on bonus was promoted earlier this year. I get my year’s makeup with the Sephora gift cards, and I am looking for free airfare with the BA card.

What do you look for when getting a new credit card?

How Far Would You Go to Cut Your Housing Costs?

Written by on · 18 Comments

In real estate, we are often deciding between Price, Location, and Space. You can have a big, well-priced apartment or home in a less-than desirable location. Or, you can get a cheaper, tiny place in a great part of town. Of course, if your budget is stretchy enough, you can get the biggest place in the best area!

Imagine that you can cut your rent by 70%-80%. Imagine what you can do with all the money you save. Now imagine what you have to sacrifice to get that rent.

Felice Cohen, a professional organizer in Manhattan, chose Price and Location. She has managed to live in a 90 sq. ft apartment where she sleeps less than 2 feet from the ceiling. She pays $700/month for the privilege, whereas her neighbors pay $3,000+/month for normal-sized apartments. Her “living room” is a chair with a reading lamp. Her “ktichen” consists of a hotplate, a toaster, and a tiny refrigerator. Her “bedroom” is a loft bed so close to the ceiling that when Felice is lying down, her face is 23 inches from the ceiling.

Talk. About. Dedication…. or a stunning ability to cope with claustrophobic spaces… I can’t decide.

Reading about Felice’s extreme sacrifices to get into the location she wants at the price she wants has made me think about what I’d be willing to give up for cheaper housing costs. Right now CB and I pay $1,100 for a big 1-bedroom apartment in a very convenient part of town – close to freeways, shopping, restaurants. The best part is that we have 2 parking spaces. Here’s what we’d be willing to do to drop the rent:

  • Live in a studio if we can drop our rent by 25% or more (savings = $275)
  • Trade down to a smaller apartment if we can save 10% (savings = $110).
  • Give up our 2nd parking space if there is a substantial break in the price (i.e. $250 or more). Two parking spaces are a real sanity saver when it’s raining or when street parking is unavailable.
  • Share a 2-bedroom apartment or house with roommates if we can save 30%+ (savings = $300+).

What WOULD you do to decrease your rent by 70%-80%? Would you move back home? Live with roommates? Live with a roommate in a studio?

How Engagement Changed Our Finances

Written by on · 14 Comments

Engagement is that strange, twilight period where you are still single in the eyes of the law, but that you have made promises to each other to become something more – a legally sanctioned partnership with all the rights and obligations accorded to you by the state. I am not sure how much impact an engagement has on most couples’ finances, but even though CB and I won’t be getting married until next June, the act of getting engaged, I feel, have already changed the way we look at our finances:

  • I usually carry a small life insurance policy provided through my employer. In years past, I have always designated my mom as my beneficiary. During the most recent open enrollment, however, I put down CB’s name. I don’t know when CB started putting my name down as his beneficiary, but that apparently happened before my enrollment period.
  • CB has a few thousand dollars in student loans from undergraduate years. I feel much more motivated now to figure out how we can pay off this debt before we go to graduate school, even though it’s not technically my loan. I know that whatever debt we have, even though they are individual loans, will affect our financial resources as a couple.
  • We have stopped keeping very close track of who pays for what or how proportionally split our expenditures are. If I feel that he has been picking up a lot of the tabs lately, I’ll pay for our flights for a get away or the next Costco run.
  • I’ve never thought I’d want a 100% combined finances set-up, but I am beginning to change my mind. The sense of partnership – of being in this together, with someone whom you do not have to calculate with or account for – is very appealing indeed. So I suppose being engaged, and really appreciating the feeling of shared resources, shared opportunities, shared goals makes me seriously think about combining finances once we are married.

Has engagement changed (or do you think it will change) your finances and attitudes toward shared finances?

My Guest Post on Krystal’s Give Me Back My Five Bucks

Written by on · Leave a Comment

If you just came over via my guest post: “Don’t Let Other People Tell You How to Spend” on Give Me Back My Five Bucks, welcome! Krystal was one of the first bloggers I’ve started reading, so I am extra excited that I got the chance to guest post on her blog.

One of the biggest budget adjustments I’ve done for my wedding is to lower my photography budget. That was also the hardest adjustment, because it seems that “wedding photography” is in that sacrosanct category of spending that you cut at risk of great regret. Head on to Krystal’s blog to read more.

For new readers… here’s a little bit about me.

I am a 20-something business professionl who is planning to get her full-time MBA, after graduation I am planning a career in marketing management. My mother is my greatest personal finance hero, having shown me the effects of interest amortization when I was just in middle school. She also instilled in me a healthy fear of growing old and poor, a fear which I have parlayed into maxing out my Roth IRA every year since 2006, and maxing out my 401K for the first time this year!

In April, I got engaged to the man I’ve been dating since I was in high school (affectionately referred to as CB in this blog), and though it might not be politic to admit, the fact that we – clueless high school sweethearts - somehow grew up into two adults planning a life together is one of my greatest achievements and deepest joys. I love Argentine tango. I love travel. I love food (and fights a never-ending / frequently-losing battle with too much take-out). I believe that personal finance shouldn’t make you miserable.

I’d love it if you stuck around. You can subscribe to my feed and tweet me.

How Much Is That MBA In the Window?

Written by on · 32 Comments

How much is that MBA in the window?
That two-year three-lettered degree?
How much is that MBA in the window?
The loans will be the death of me!

The MBA application season has started (cue resume updates, essay writing, interview prep, cross-country campus visits, and lots and lots of $$$). Even though the application process and travel is costing a pretty penny, I know the REAL big expenses will come once I am accepted into the hallowed halls of graduate education.

The cost of a 2-year MBA program usually runs $160,000+ including tuition, books, and room and board. Wharton, in fact, suggests a $180,000 budget for two years for new incoming students. To say that number is intimidating would be putting it lightly. With 12 months until I hopefully start my MBA journey, I’ve decided to look at my finances and see how I can meet that cost. No Debt MBA is an MBA student who plans to graduate without any debt. I may not be as ambitious as she is, but I would like to keep my total debt under $50,000 and I’d like to pay off, not capitalize, accrued interest during my 2 years in school. Here is how I plan on paying for my business education while minimizing student loans.

$80,000.

That’s how much I have right now, around $40,000 in personal savings and $40,000 in promised family contributions. To stretch this money as far as possible, I plan on living with roommates, getting by without a car, and limiting my purchases. Baaaack to student living! The family contributions will come from the sale of my grandmother’s apartment. My grandmother, despite never having gone to college, was a great proponent of education. So, my mother has decided that this will be her gift to me. I think she would be happy I’m using the money to go to school.

The rest?

I am crossing my fingers that I get some grants (i.e., “free money”). If I could get the $30,000+ a year that No Debt MBA did, I would be over the moon. If I can get even $10,000 a year, that would help tremendously. My 401K and Roth IRA hover around ~$70,000 (give or take $5,000 depending on which way the Dow blows), but I’m leaving those funds alone. Aside from the penalties and fees, I’d like to think that that money isn’t even mine – they belong to a nice old lady 60  years from now who will be mighty glad I didn’t raid her retirement kitty. icon smile How Much Is That MBA In the Window?

After graduation, I’d like to go into a marketing or marketing consulting role. While I should be able to make a good living from these jobs, they are not the $200K+ salary and bonus figures that finance types boast of in their first year out of school. So I want to be very careful about how I take on student loans. (A new blogger I just found, No More Harvard Debt, is a 2009 Harvard MBA who is blogging about paying off $90K in debt in 8 months). In any case, I don’t want to make too rosy a projection of my post-MBA finances. You get in trouble that way. Making $100,000 when you thought you’d only get $80,000 = Wundebar! Making $200,000 when you planned for a $250,000 lifestyle? No bueno.

Furthermore, getting married means that I am no longer just concerned about “my” finances. CB is also going to a masters program. He will also take on loans, although I am hopeful that he will receive many more grants than I will. The more we minimize our educational debt, the more flexibility we will have down the road.