Post undergrad mistakes to avoid when starting business school
Undergrads are a time for making mistakes and learning from them. By the time of gradution, most people will have probably made a handful of money missteps. While this is common for the typical college undergraduate, for those starting the process of exploring business school, it’s important to learn from those mistakes. It’s time to take inventory of finances and prepare for the upcoming addition of taking out private student loans in order to pay for an extended education. A couple lifestyle tweaks can go a long way in adjusting a budget to prepare for the impending repayment period that will follow graduation.
Credit score confusion
Before starting an undergrad, most people probably do not even have a credit score. After graduating and establishing a financial reputation, everyone will have one and it will play a big part with lenders when applying for a private graduate student loan. A major mistake is not knowing your credit score, at least annually and additionally not knowing what will impact it both positively and negatively. This is not the only thing that will be considered when applying for a business school loan, but it is a majority piece of the puzzle. While working and making money in anticipation of beginning an MBA program, be hyper aware of staying on top of bills, especially existing private student loans to get in good standing ahead of time.
Disregarding your budget
Post undergrad is most people’s first taste of real money and that can be a thrill. It can also cripple and enforce bad habits that if followed to grad school can bring most people underwater. Budgets do not have to be overly complex, in fact, for those who cannot stick to the budget created, this is generally a sign it is not the right fit for your habits and lifestyle. Implement a budget that’s easy to stick to and use tools like student loan refi calculators to help forecast for the future. Being able to compare the two budgets even in general terms before starting business school prepares for the shift in finances that will accompany this new endeavour.
Putting off retirement savings
It might seem unnatural to graduate undergrad and right away jump to a retirement focused mindset, but it is important to do so. Saving for retirement is a gradual process and the earlier it’s added to a budget, the better off you will be long term. Especially as adult life takes off to include major financial commitments like a mortgage, MBA student loans, children, etc. 401(k)s and IRAs are like personal finance extra credit, so contributing to them can occasionally be moved up and down the list of priorities, but should always be near the top of the list. When approaching a start date for grad school, take into account both what opportunities for financial growth having an MBA will offer upon graduation as well as how using a private student loan to pay for it will impact contributions to retirement goals moving forward.
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