We all know that getting an MBA isn’t cheap. Although it can get you ahead in your career (and lead you to a more lucrative salary in the long run), there’s no denying the significant financial component of grad school.
So before you decide to embark on the business school journey, and as you consider payment options including loans, it’s crucial to have a sense of how much the whole experience is really going to cost. The more complete picture you have of your expenses, the more equipped you’ll be to decide if it is for you—and if so, how you can you best plan for and enjoy the experience.
In addition to the obvious—tuition, rent, and living expenses—there are a number of hidden costs (not advertised in your acceptance letter) that can add up over the course of the program. As someone who just finished grad school, I (for better or worse) have a first-hand understanding of this. Here is my list of the top grad-school activities that made an unexpected dent in my wallet:
1. Applying to Programs
Spending money on grad school starts before you even get your acceptance letters. Consider the application fee, usually $100 to $250 per application for MBA programs, and test fees: $160 for the GRE or $250 for the GMAT each time you take it. If you opt to hire an admissions consultant or sign up for a test-prep service, you’re looking at several hundred or even thousands of dollars. And even if you just invest in a recommended study-prep book, you’re looking at close to another $100. Plus, unless you’re ultra-confident that you’ll get into your dream school, you’re probably going to want to apply to multiple programs.
Oh, and depending on your programs of choice, you could be required to travel for interviews, which you will have to pay for out of your own pocket. That said, some schools and testing programs will waive fees if you can demonstrate financial need, so make sure to look into this option if you think you qualify.
2. Purchasing School Supplies
I love buying school supplies (I’m a paper-and-pen person, so I always have a notebook handy), but purchasing these items can add up quickly. I’d recommend buying pens, Post-it notes, legal pads, and anything else you might need on Amazon because, personally, I found the school bookstore and local office supply shops far more expensive, especially at the beginning of the semester.
And here’s the big one: You’ll want to check on the computer requirements of your program. Some schools require software that only works on a PC, for example, so you’ll need to make sure that you have a laptop that is compatible with the everyday programs you’ll be accessing.
Finally, you may end up needing to purchase clothes as well. Many of my friends at business school had previously worked in formal offices, where they wore suits everyday, and their casual collection was nonexistent. They ended up needing to buy comfortable stuff they could wear to class, not a corporate environment.
3. Making New Friends
I found myself going out to eat and getting together over coffee much more than I did when I was working full-time. Despite the cost, I felt that it was important to put myself out there and meet people, so I decided to keep accepting invitations even though it meant adjusting my spending plan a bit.
The reality is that in addition to being fun, meeting people at business school is also a crucial part of the professional experience: You need to get to know your classmates in order to build a strong professional network.
How much you spend in these early stages of networking depends, in part, on where you live. I got my MBA in Boston, which definitely isn’t cheap. On average, I’d spend $20 to $30 on a dinner with classmates. If you really don’t have a budget for extracurricular activities, you can get in touch with your frugal side. Eat before you get to the restaurant, and stick to an appetizer or drink, host classmates for a potluck instead of meeting up at a restaurant, or suggest a pizza night.
4. Interviewing for a Job
Similar to applying for school, looking for a post-grad job can also be a major expense. You’ll likely need to travel for meetings and interviews and purchase at least one nice interview outfit. You may wish to print your resume on nice paper and carry it in a decent-looking vessel, not the worn messenger bag you dragged around school for the past two years.
Each school handles interviews differently, so I’d recommend talking with the career office before you go to learn more about what the process looks like at the programs you’re considering. For example, my school hosted consulting firm interviews and recruiting events on campus, so there was no travel cost at all for people looking at that sector. We just had to make sure we had a freshly pressed suit and polished pair of shoes—the cost was minimal.
I had colleagues, however, who found themselves flying across the country to interview at tech companies in San Francisco. Some crashed with friends or family and spared themselves the accommodation expense, but others had to factor in food, flight, and bed.
Yes, I know this list makes getting your MBA seem even more expensive than you already thought, but I promise you that not all the students are loaded. I’ve always found it helpful to be prepared and aware of unexpected costs in advance. It might mean cutting back on things you’ve never thought twice about before the journey begins, but if this is something you feel strongly about pursuing, it’ll be worth it. Plus, remember that after you graduate, you’re likely to be in a position to command a higher salary as you set yourself up for a thriving, long-term career.