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Tips for your MBA budget (from students that know)

Katie Schenk - September 13, 2016

Budget calculation

Are you sitting with an acceptance letter? (And by sitting, we do mean dancing around the room.) Or, are you slaving over your admissions essay? Either way, you’ll need to think about your MBA budget sooner or later (and usually sooner rather than later).

Sure, you played with numbers recently (all that GMAT study), but making a budget may be a little more tricky than you think. It’s easy to forget essential expenses and neglect financing options that aren’t in front of your face.

Fortunately, our Prodigy investors are ready to share a few tips for creating your MBA budget.

What goes into an MBA budget?

Tuition is the easiest line item to add to your budget, so you may as well tuck it onto the top of your list. Many schools also provide an estimate for books and living expenses. You should take a close look at the latter as figures will vary based on where you live (on or off campus) and whether you’re prepared to adopt a frugal lifestyle while you study.

Fernando, a Prodigy Ambassador at IESE in Spain, recommends you spend time considering all the softer aspects of your education. “It is important to include the costs for business treks, international modules, sports trips and cultural treks that you may want to join.” Those expenses can be tough to estimate as you don’t yet know what opportunities you will choose, but factor in as many as you believe are realistic. (And maybe add a little more as a contingency!)

And, if you come from a country whose currency isn’t tied to your host country’s money, make sure you factor in currency conversions. Fernando has had first-hand experience with this as “the variation has been more than 30 percent since beginning [his] course.”

Getting accurate information

As suggested, it’s difficult to work out actual costs for many of the items that should be in your budget. You can’t guarantee what your rent will be until you’ve signed a lease or received a campus housing assignment.

But, you don’t need to rely on guesswork or the figures on your university’s website. Fernando advises that “the best way to get this information is talking to current students of your school.” Contact the international student office to see if you can be put in touch with someone whose interests or region are similar to get the most accurate estimate.

How much money do you have and where will you find the rest?

Dan Edoma, a Prodigy Ambassador from Ghana (currently studying in Spain) recommends looking at as many financing sources as possible.

No matter where you are from or how much money you need, taking a student loan is a big decision. Dan suggests looking closely at the “various options before you; scholarships, personal savings, and family support. If, after exhausting all these possibilities, if there is still a deficit in your budget then you can apply for a student loan.”

Many students require financing outside of savings and scholarships, and universities are adept at working with financing companies. As Dan points out, often “student loans can be used both for tuition and cost of living, but schools have a cap in terms of the total loan that one can apply for.”

You’ll need to pay attention to that as you look at the APR, duration, grace period, and repayment options. Skip it and you may just find yourself short of cash at the last minute.

Finally, remember that your budget will be unique. Speaking to other students and following the advice of our Prodigy Ambassadors can only take you so far. It’s important to be realistic when finalising your budget… and when sticking to it during your studies.

And, if you're an international student in need of a student loan to fund your MBA, why not see whether your school accepts Prodigy finances? You can take a look at Prodigy-supported programmes here.

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