NEWS | How to Save Money on Business Schools and Budget for Your MBA
Published On: Thursday, 22nd Jun 2023
Gaining an MBA can make a big difference to your future career options, but it does come at a price. In this article, we will highlight some of the ways you can look to save money while choosing your business school and the importance of budgeting once you get there. We will also suggest money-saving tips to keep your costs down.
When thinking about your MBA you will need to factor in additional costs on top of your tuition fee. Accommodation, food, travel, and other expenses can double or even triple your annual living costs while studying.
Although you can expect your schooling outlay to provide a strong return on investment in the future, in the present your degree will require careful financial planning. There are funding sources you can research to help pay for your studies. For example, you can combine personal savings with partial or full-tuition scholarships, corporate sponsorship, and loans, or, pay for the whole period of study from your savings. It is important to have some idea of how you will fund your MBA with or without a scholarship.
One popular way for students to save money on business school is to find a company with education reimbursement. Many companies value the skills the MBA brings so highly that they are prepared to pay for it by partially or fully sponsoring their employees.
The GMAT will not only determine whether you get into business school; it could also determine your eligibility for scholarships. If you do well on your GMAT and are accepted at business school, you can consider merit scholarships, sometimes called fellowships. You can read more about our Sainsbury Management Fellows scholarship here.
Many MBA students fund their studies in part, or fully, via a verified student loan provider. These include banks and finance companies. If you need to look for a loan, be aware of the terms and conditions available across the board as repayment terms and interest rates can vary considerably.
Some MBA students will be able to use their personal savings or family funds to cover the cost of their MBA studies. Self-funding students have the added option of either paying the annual tuition fee at the start of each year or paying in instalments which can help with budgeting.
Of course, Business schools have different tuition fees so you could save money by choosing a less expensive school than you originally had in mind. It will be helpful to be open-minded about this when you are researching your MBA journey - weigh up the investment in your studies versus future income gains.
Shorter Courses Cost
Less Another thing to consider is the possibility of graduating earlier. If you stay in school longer it is obvious that it will cost you more in terms of tuition, food, and accommodation. Although most MBA courses run over two years, some offer a one-year option which, if suitable, may immediately cut your costs in half.
Having made the right choices for you about funding and business school, to work within your means, detailed budgeting during your study time will keep your finances in control and avoid money worries which could detract from your studies.
Expenses and incomes will change throughout your career, but the principles learned during your time as a student can be used for the rest of your life. The discipline of tracking your incoming money and outgoings will help you to keep control of your spending so that you are less likely to come out of business school over your planned budget.
Before creating a personal budget, you will need to get a sense of how much you spend on average per month. Most banks now make personal budgeting possible through their mobile banking apps so this should be quite simple. Once you have established a record of your spending you can start to mark your expenses as either essential or non-essential. Rent, insurance, and student loan repayments would fall into the essential section while entertainment subscriptions or takeaway coffees would not!
Once you have determined the cost of your essentials, take this away from your set monthly income and you will have the amount you have left to spend. Also, bear in mind, you may have books to buy that are not regular monthly expenses, but they still need to be bought.
As careful as you are with your plans there are bound to be unexpected expenses, or you might just find that things are more expensive than you bargained for. There is no issue about amending your budget as your term time goes on. At least you are in control of your money and can choose to do something about it if you wish. Essential costs are harder to cut down but can still be looked at while you have more leeway with the non-essential. They are called non-essential for a reason!
Many digital budgeting tools are available to make the task less onerous so even if you are not used to looking at your expenditure in a granular way, they will make it less daunting.
Working while doing an MBA?
This is a big question and will depend on so many factors. If you are doing a full-time MBA, especially at an elite business school, you would need to ask yourself whether dividing your time between study and work, gives you the focus you need for your MBA especially if it is a one year course. Will working diminish or enhance your business school experience? If you do decide to generate income during your full-time MBA, you could ask your professors if they have any research assistant jobs available or investigate part-time work with a local company to gain relevant business experience.
If you are doing a part-time MBA, you will be engaged in part-time employment already (your employer may even be contributing to the cost of your MBA) and that will help with your overall study costs.
Once you have your budgeting worked out there are many ways to minimise costs. For example, being aware of your eating habits and saying no to convenience and restaurant food. Buy your groceries and cook meals. The cost of eating out is much greater than that of cooking at home. This does not mean that you can never have a meal delivery ever again, but it should be the exception rather than the rule.
The business school will probably offer meal plans which you can buy or simply use the campus canteen. Canteens will be much cheaper than buying lunch at cafes, especially if your school is in an expensive area.
Textbooks can be expensive. If you are looking to save money on books, see if your business school operates a textbook renting scheme, or research online to see if former students are selling textbooks. Try the obvious places, such as Facebook and eBay. There is also the online bookstore, mypustak, to which former students can donate textbooks and the store, in turn, provides books to current students in need, free of charge.
Explore student-friendly banks to see if you can open an account that accrues small or no fees while you are studying. Online research should reveal what is available and you may find banks that give extra rewards for students.
Clubs, Associations & Events: No matter how carefully you try to control your expenditure there are likely to be hidden costs during your study period as well as unwanted ones. Again, you will need to weigh up the value of say, an organised student trip, where you will potentially gain friends and contacts for life, but the experience could put a dent in your bank balance. Joining clubs is often viewed as a necessary expense as they help you learn how to make yourself more attractive to recruiters and offer valuable networking opportunities. However, joining fees can be high and this can become expensive if you would like to join multiple clubs. Again, it is a question of balancing costs with potential benefits and enjoyment, of course.
Find out if your school has any grants to help with the cost of items like laptops and other essential equipment. Sometimes funds set aside to help students go unused because not enough students apply for them.
You may already be aware but downloading readily available and legal freeware to help you with your study can help with your budgeting. Popular software tends to be expensive so some research should point you to lower-cost or free alternatives for word processing, antivirus, image editing, and audio editing software. There are also creative platforms such as Canva and Lumen5 that provide free entry-level use.
Retailer Discounts: Some companies offer student discounts, especially in big campus towns and cities. Make yourself aware of those that do and factor these places into your spending plans if possible. Showing your student ID could get you useful savings.
You may have taken out subscriptions that you have forgotten about or barely use – these can be a drain on resources. Keep on top of what you use and unsubscribe from anything that is not essential. It is normally simple to unsubscribe. Explore this during your initial planning in case there is a subscription cancellation notice period.
Here are our final cost-cutting tips:
- Consider living with one or more roommates and sharing rent and bills.
- Prepare your own coffee – a daily morning coffee bought from a high street coffee shop will take a toll on your wallet. Instead, buy a low-cost coffeemaker, pour your homemade coffee into a travel mug, and take your coffee with you.
- Make value purchases. Shop for store brands instead of name brands as they will be cheaper than their well-known, name-brand equivalents and tests have shown many own-label products taste just as good as brands. Go food shopping later in the day as certain supermarkets discount some products later in the day/evening. You may think this is a lot of effort for small savings, but you will be surprised how much of a difference it can make especially when food prices rise.
Although attending business school may have a reputation for being highly priced, if you plan and learn money saving tricks you will be able to live well on less during your study period. Prudent budgeting will also make you more aware of where you stand financially and help you start your business career in the best possible financial position.