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Budgeting for grad school

Date posted:  8/25/16 09:00:00 AM Establish budgeting for grad school

Investing in grad school can be a great way to bolster your résumé and increase your understanding of a specific subject. Whether you want to pursue a law degree or obtain your master's degree, financial planning is critical part of furthering your education.

Follow these tips for staying on a budget for every stage of your life as a grad student:

Application and test fees
Depending on the school or program you want to apply for, there may be varying expenses associated with the application process. From the GRE or LSAT test fees, to paying application fees to multiple schools, you'll want to stash away some money to cover these costs.

While fees vary from school to school, Idealist emphasized that this shouldn't discourage you from applying to a program. Plan ahead and work toward a savings goal. If you want to apply to three different programs and each one has a $50 application fee, set up automatic transfers to your savings account of $50 every month until your reach that goal..

In some instances, there may be fee waivers available. Reach out to the admissions office and ask what criteria you must meet to have an application fee waived.

Before applying for a program, you might also find you need to set aside money for tests. While there may be some fee waivers available, typically you have to pay full price, and in 2016 the GRE costs $160, the LSAT costs $175 and the GMAT is $250. These fees don't include the cost of books, preparation materials or any courses you might want to take to prepare yourself for the exam. These costs should be factored into your grad school budget as well.

Be aware of  all the expenses
The Muse emphasized the importance of planning your budget. Determine your annual and monthly expenses for everything from groceries to vehicle maintenance. Books and tuition will only be addressed and planned out once a year while utilities, housing, transportation, debt, food and health care are monthly expenses.

Determining what you need to spend on each item will help you figure out how much you'll need to save. In some instances, this may require you to take out a loan or apply for an additional job.

Honor other financial responsibilities
While grad school is a notable expense, it's important that you don't lose track of other financial obligations. Make sure you stay on top of credit card bills, student loans, savings and retirement. These are very important for your financial future.

"You can take loans for grad school," said Greg McBride, Bankrate's chief financial analyst, according to U.S. News & World Report. "You can't take loans out for retirement."

If you can't make it work, you'll want to find another way to fund your educational expenses.

Ask your employer
Your company may be able to help cover some of the costs associated with going to grad school, suggested U.S. News & World Report. However, you may need to demonstrate how they will get a return on their investment.

"From an employer's perspective, they don't want to fork over a bunch of money only to see you move to a competitor," noted McBride.

Employers may offer tuition reimbursement programs if your degree aligns with the company's industry or your specific position. Research and ask questions to ensure you are aware of all of your options.

Use a 529 plan
While 529 plans are typically used for undergraduate programs, after graduation you can potentially use savings leftover in that account to help finance grad school. And if you don't already have one, open a new one to use toward furthering your education.

"Even if your time horizon is short, even a year or two years from now, you're sheltering whatever returns you get from taxation," added McBride.

Find ways to save
There are many different ways you can save money while going to grad school. Whether you decide to get a roommate or cut out unnecessary spending in your monthly budget, like buying a coffee every day, there are plenty of places you can trim your budget to meet your new needs.

Some schools might also have research projects you can be paid for participating in or you can find out about teaching assistant positions within your program. These jobs can increase your cash inflow and alleviate some financial stress.

In addition, make sure you take advantage of student discounts. Many stores offer great deals if you show a valid student ID. It doesn't hurt to ask, so remember to inquire about available student discounts in stores where you shop.

Ask for assistance
If family members or friends ask what you want for your birthday or for a holiday, ask for practical items or gift cards to use at grocery stores or gyms. A little help from others can go a long way when you're stretching a budget during grad school.

Save during school
While it might be difficult to think about saving money while attending grad school, try to put as much into your savings account as you can. If an emergency arises and you need cash fast, you'll be grateful you put money away for a rainy day.

In addition, some grad schools require you to take an exam upon completion of the program. These tests can be quite expensive and may require a preparation course as well. You'll want to have funds on hand when these fees roll around.

Grad school is a great investment in your professional growth. However, it can be a financial burden. Rework your budget to accommodate your new lifestyle and you'll be better equipped for this new chapter in your life.