Avoid 3 Mistakes When Building Your MBA Budget

by Stacy Blackman Consulting, Sep 28, 2014

This post originally appeared on Stacys Strictly Business MBA Blog on U.S.News.com.

The MBA admissions process requires determination, dedication and hard work. But dont let the effort required to gain admission stop you from tackling another important aspect of business school success: your budget.

Given the rising cost of a top business degree, even a small budgeting mistake can cost you a fair amount. Here are three mistakes to avoid as you create your plan to pay for business school.

1. Not starting early enough:

Ideally, you wouldhaveconsidered the cost of an MBA when deciding whether to attend business school or in the first place. This includes thinking about tuition along with external costs such as wages lost by leaving your job.

Either way, as soon as you have any financing questions at all, you should contact your prospectiveschools financial aid office. You can also get advice through admissions events. Financial aid officers are an amazing resource. Theyve seen it all before, and they want to ensure qualified candidates can pay for a degree.

[Check out 10 ways to make the most of business school.]

Starting earlyabout three months before applyingis also important if youre pursuing scholarships, fellowships or grants. Since scholarships are free money, competition can be fierce, and youll benefit from having the time to create strong scholarship applications and from knowing the key deadlines so that opportunities dont pass you by.

2. Not thinking beyond your cost of attendance:

The advantage youll get from early budgetingis only as good as the numbers youre starting with. While the schools published cost of attendance is a clear starting pointthat factors in tuition as well as cost of living estimates, you mayneed to cover additional costs before, during and after your program.

To address the before costs, youll want toassess your personal financial situation carefully to see what your cost of attendance really entails.For example, it might cost you money to relocate to a new city or commute to campus.

You also might still haverecurring bills that cant be changed, such as an installment loan on a largepurchase. Even updating your business wardrobe to prepare for interview season can amount to several hundred dollars if youre not planning carefully.

[Uncover the hidden costs of paying for an MBA program.]

To understand what added costs you might incur during and after school, brainstorm all the opportunities youre interested in that require extra spending: dues for your target clubs, study abroad expenses, and attendance fees for conferences are three great starting points. (One student lending company, CommonBond, has a calculator that allows you to factor once in a lifetime trips into your business school budget.) If youre planning to intern in a new city during the summer, youll need to budget for the upfront cost of moving in as well.

If youre planning to intern in a new city during the summer, youll need to budget for the upfront cost of moving as well.

3. Not investigating all your options:

Once youve gotten a head start and pinned down the amount youll need to budget, make sure you dont leave any funding options on the table. It might seem daunting to call up student loan companies and interview these potential lenders, but finding the best student loan option out there will save you thousands of dollars and avoid hours of logistical headaches.

Dont be afraid to get creative either or even to ask for money. If you know your post-MBA plans, you may be able to negotiate with your employer for sponsorship during your MBA. Finally, review your existing assets and whether youll benefit from tapping into retirement accounts or other investments to fund your MBA.

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If you are looking for guidance on your MBA application, Stacy Blackman Consulting can help with hourly and comprehensive consulting services. Contact us to learn more.