Many readers suggested that I can save money by “living like a student” when I am in school and after I graduate from my MBA program. This might be harder for MBA students than other professional students who have gone straight from college to graduate school, and who haven’t had the chance to “inflate” their lifestyle. In fact, Cornell University’s financial website specifically extols MBA students to live frugally while earning their degree.
Pursuit of an MBA is an investment in your future. It will most likely require you to take on some educational debt. There are ways to limit the amount of education debt you accumulate as a student. The easiest way to reduce your overall debt is to reduce your discretionary expenses. It is much easier to live like a student when you are a student than to live like a student when you are earning $90,000 annually.
So what does “live like a student” mean? Is it strictly a diet of ramen and eggs? Or driving an old beater? Or living with 3-4 roommates? Or working a part-time or even full-time job while going to school at the same time? My cousin, who is in medical school right now, lives with a roommate in an apartment very close to the school and leads a frugal lifestyle, but otherwise drives a paid-off car courtesy of his parents and doesn’t work. My other cousin is a junior in a liberal arts college much like mine and while she holds down a few part-time jobs on campus, she doesn’t worry about paying for tuition or books. Her room and board are all covered, and so any money she makes is her spending money.
Another friend of mine who recently graduated from law school lived in a cramped apartment which she described as “on the outskirts of drive-by territory”, close enough to hear the gunshots sometimes, but far away enough that your friends aren’t afraid to come by during the daytime. When my dad was in graduate school, my parents lived on his teaching assistant stipend (meant for ONE person), renting a room in a basement. The only time they enjoyed fish was when they could buy discarded fishheads from the market. At the liberal arts college where I graduated from, you can see BMW M-6s and even a Maserati dotting the parking lot. Obviously, “live like a student” can run quite a spectrum depending on your expectations, resources, and background.
Here’s what I think of as living like a student:
1. Cooking at home most nights. It might be hard to do, but I am going to make a concerted effort to put together meals that are nutrious and cheap. Think canned beans, omelets, and peanut butter & jelly sandwiches. What I will not do, however, is eat ramen every night.
2. Have a wardrobe that fits and flatters for what I need… going to class, networking, interviews, etc. What I will not do is over-buy in quality or quanity, especially not both. For example, I’d need a nice leather purse to carry resumes and folders, but I do not need that purse to be Prada or Chanel (or even Longchamp!).
3. Live with roommate(s). Housing expense is probably the biggest fixed expense most students have, and living with a roommate is a sure way to save the budget. I am going to embrace shared living… every $100 I can save is another $100 in debt that I don’t have to take out and that I don’t have to repay (with interest).
4. Get by without a car. I am going to make a concerted effort to not own a car while I am in school. No car means no insurance fees, no car payments (as my 16-year-old Honda cannot survive a cross-country move, I’d have to lease or purchase another car), no gas money, and no danger of getting tickets. Outside of getting a roommate, this move will probably save me the most money.