Graduate education is an investment that requires financial sacrifice along the way. Even students with generous funding often find that some expenses are not covered, and their general standard of living is not as high as they might like. Many gifted students fail to accomplish their dreams because the reality of tuition, housing and living expenses keeps them from completing their degree.
While student loans and some living expenses (house mortgage) seem to require the accumulation of debt, many graduate students have made poor decisions and allowed credit card debt and foolish spending take over their lives.
Debt reduction begins with a decision to change your lifestyle. Reducing debt includes selling assets, doubling payments to decrease interest costs, reducing living expenses, reducing tax withholdings and credit counseling. A renewed commitment to personal spending discipline can move you toward a financial foundation from which you can begin planning for a more stable personal budget, without the anxiety of personal debt.
Some Concrete Suggestions
Keep track of expenses – get a realistic view of where your money is going.
Make a rational budget.- list all fixed expenses, basic living costs, entertainment and savings.
Pay down debts as soon as possible – begin with short-term high interest credit cards.
Take into account variations in cost-of-living – it costs more to live in Austin than Oklahoma City. Location of a graduate school will definitely affect your future finances.
Develop a contingency plan – Set aside one month’s living expenses in an interest-bearing checking account. Set aside 6 months of funds for unexpected emergencies in a money market account.
Financial guru Ron Blue says in his book “Money Matters” that: “changing your financial direction is a four step process: spend less than you earn, avoid debt, build liquidity, and set long-term goals.”