How Much Can I REALLY Save Per Month?

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
Rent $635 fixed $635 $3233
Home Bills $50 fixed $685 $3183
Cell Phone $55 fixed $740 $3128
Car Insurance $80 fixed $820 $3048
Laser Hair Removal Loan $250 fixed $1070 $2798
Food $300 fixed $1370 $2498
Gas $100 fixed $1470 $2398
Gym $35 fixed $1505 $2363
Dance Class $60 ? $1565 $2303 $27,636 $195,613
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
Travel $100 ? $2355 $1213 $14,556 $103,030
Medical & Dental $200 medical $2555 $1013 $12,156 $86,043
Retirement $400 savings $2955 $1013 $12,156 $86,043
Stocks & ETF $300 savings $3155 $1013 $12,156 $86,043
529 Plan $100 savings $3255 $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?

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5 thoughts on “How Much Can I REALLY Save Per Month?”

  1. You said that the schools you were looking at were in the 100k-150k range. Why is that? Are you only looking at private schools? I am glad you are not going to law school. Take it from someone in law school, you don't want to be in that much debt coming out of law school. 🙂

  2. @SeeJaneGetRich yea, I'm definitely not going to be a lawyer! I'm looking at both public and private schools, but mostly private just due to the limited options in the field I want to get my MA in. However, I recently found a masters program at a state school that may offer a more diverse curriculum that's a lot less expensive ($50k or less for 2 years). I'm actually leaning towards that now… what I'd like to do is get a masters of design and product development from a state school and later go back and get my MBA maybe in an evenings and weekends program. Or perhaps I will decide I don't need an MBA. The other program I'm looking at is a 3 year design program at a private school that's going to be about $70k per year(!) taking into account tuition, housing, supplies, etc. Yikes. How does anyone who isn't on a trust fund afford that?

  3. Graduate and professional school's can be very pricey! I am so thankful tobe graduating from law school in this without debt. My winning combination was saving before going to law school + scholarships + mom's help + summer job + frugal living = debt free graduation.

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