I’ve decided that even though my potential graduate education will likely cost me $150k+, I’m going to focus on saving $100k and take out loans for the additional $50k. That will be more reasonable to pay back AFTER grad school, even though the interest will cost me. I may be able to convince my parents to let me borrow from them, that extra $50k, which I will pay back.
My question is, how long would it REALLY take me to save $100k? That’s a lot of mula.
Or, I guess my real question is, how much can I save before applying to school for fall 2012. That’s two years away.
I’ll say I have 24 months to save. At $2000 / month that’s only $48,000. Sheesh.
I think, if I went totally frugal, I might be able to sock away $2k / month. But what’s the point when it wouldn’t even cover one year of grad school?
Current Income: $3418 / month + $100 medical + approx $350 post-tax in freelance income (which is my “fun” spend)
= $3868 / month (income)
Currently that goes to…
(scroll down for budget table, something is wonky with my HTML causing a huge gap below but I don’t know what. Brownie points if you can tell me why there’s a huge white gap here.)
|item||cost||type||total||remainder||12mnth savings||5 year savings at 5% interest|
|Laser Hair Removal Loan||$250||fixed||$1070||$2798|
|Voice Lessons (2x)||$190||?||$1755||$2112||$25,344||$179,389|
|Group Therapy (4x)||$250||?||$2005||$1863||$22,356||$158,240|
|Career Counseling (2x)||$200||?||$2205||$1763||$21,156||$149,746|
|Class at Community College||$50||?||$2255||$1613||$19,356||$137,005|
|Clothes & Beauty||$300||?||$2355||$1313||$15,756||$111,524|
|Medical & Dental||$200||medical||$2555||$1013||$12,156||$86,043|
|Stocks & ETF||$300||savings||$3155||$1013||$12,156||$86,043|
So basically, if I keep saving the way I’m saving now, in five years, when I’m 31, I’ll have an additional $86k in savings (assuming 5% growth rate, not sure that’s fair to assume over 5 years).
With my current 30k savings added to just $12,156 / year at 5% growth I will have:
$108,817 (5 years savings)
If I could save the most possible (getting rid of all non-fixed spending) I could hypothetically save $198,630 in 5 years.
This is assuming my job and income stays the same, which is unlikely. I will likely be unemployed or see a decrease in salary over those five years. There is also a chance I may see an increase in salary.
However, if I see a large increase in salary, the value of going to graduate school, from a financial standpoint, becomes less appealing. If I get to the point where I’m a billionaire (yea, right) I’d go back to school in a second, because then cost wouldn’t be prohibitive.
Well, at this this has proven that if I keep saving like I am saving, in 5 years I can afford to go to grad school, take out only about $50k in loans, and leave grad school only $50k indebted with no emergency funds. Uhhh… do I really want that?