Money Talk with a 2nd Year MBA Student Who Thinks That Studying Abroad Isn't All that It's Cracked Up to Be

Photo Credit: Screenshot from the movie "St Elmo's Fire"

Who are you and how old are you?

I am a male in my late 20s attending a MBA program (2nd year student) in the South.

Tell me about your background.

I grew up in the Midwest to a middle class family. I stayed in the area to go to college and then worked at a very famous nonprofit after graduating. I spent two years with this nonprofit, worked as an independent consultant for a year, and then spent the next three years at another nonprofit. During my last few years at the nonprofit, I decided to go to business school because I wanted to make more money. Right before I started business school, I married my girlfriend who is currently an elementary school teacher. I had a tech internship on the West Coast over the summer and will be returning to this job after graduation.

What does your financial situation look like? If you don’t earn money through a “normal job”, how do you support yourself?

I don’t earn money right now because I am in school and am supporting myself by taking on student loans. I had some savings when I started business school but those savings have been completely wiped out. My wife works as a teacher but her salary barely covers our monthly bills.

How do you define rich?

Rich means never having to worry about anything. I will only work on things and at places I find interesting, my wife and I can have kids without worrying about childcare costs, I can make large donations to charities without breaking a sweat, etc.

Did you grow up with money? How did your childhood conditions about money affect how you behave?

I grew up in a middle class household. We weren’t wealthy but we weren’t poor either. We were just normal people. My parents are both government employees and never really aspired to make a lot of money. They weren’t lazy but were happy to work at their 9-5 jobs, leave work at work, and raise my brother and I. One thing that my parents did emphasize when we were growing up was to study hard so that we could get scholarships or grants to go to college. I’m glad they pushed on that because I ultimately was able to get a decent scholarship to go to college.

Did your parents give you money when you were growing up? What about for school?

I got a weekly allowance for doing chores. My parents were able to contribute some money for college. But because I have a brother, the two of us basically had to “share” the money in the college education fund my parents contributed to as we were growing up. That, along with my scholarship, plus the fact that I decided to go to a college that was relatively inexpensive, meant that I graduated without any student loans.

Do you still have school loans?

I will owe over $150K in business school loans when I graduate. It’s going to take a while for me to pay it off and the full magnitude of how much I owe is starting to hit me. My tech job pays well but I’m not going to make investment banking or even consulting money. We’re also going to live on the West Coast after I graduate and it’s so expensive there! I paid $2250 a month for my wife and I to live in one bedroom over the summer. I’m not talking about a one-bedroom apartment or house, I mean just to live in one bedroom, which was part of a house that my classmates and I rented. I thought that was ridiculous, and I have no idea how expensive our living situation is going to be once we live there full-time. My wife also wants to start having children soon after I graduate, and I have no idea how we’re going to pay for that.

Where did you learn about investing?

I don’t invest at the moment but learn about investing from some finance classes at school and articles I read online.

What does your family situation look like?

I’m married and my wife works as an elementary school teacher. We don’t have any kids yet.

Do you and your spouse/partner have similar financial habits?

Yes, I would say so. We both had low-paying jobs all our lives (me working in nonprofits, she as a teacher) and because of that, we know how to live modestly. She’s not someone who would go out and buy something expensive and then hide the receipt from me.

Have you started to put money away for their college tuition? If so, how much is it?

I would hope that we can afford to put money away for their college tuition. I would like to help my children out with this since college seems to be getting more and more expensive.

Do you feel like you are living paycheck to paycheck? If so, do you feel that way due to your lifestyle?

I think I’ll feel that way once I start working. Between rent, bills, and paying off my student loans, I’m not sure how much I’ll be able to save. My wife and I know how to live modestly but the West Coast is really just so expensive.

What was your most regrettable purchase?

Studying abroad for a semester in college. I really didn’t get as much out of the experience as I thought I would have and when I look back, I think of it as a waste of money. Peer pressure can be expensive!

What was your best purchase?

My MBA degree. I know I’ve complained about the cost but it really helped me to change my career focus and enter a higher paying industry.

Do you feel like you have a financial habit that’s out of the norm (or at least something that others have commented on)?

I’m not sure if this is out of the norm but the magnitude of reality is starting to hit me. I will graduate in a few months and the financial situation I’ll be in worries me. I’ve skipped out on several 2nd year activities because I didn't want to add extra costs to my budget and I don’t get the feeling that my peers don’t feel the same way I do. Maybe it’s because they’re rich or just clueless, but there’s a huge “You only live once” attitude I constantly see.

Do you actively contribute to a retirement account of any sort?

I contributed money to an account during my first job but have not put money away since. I know I should start to do so once I begin working but that’s only if I’m left with anything at the end of the month!

Do you feel like your lifestyle reflects your income bracket?

I feel like my wife and I live modestly compared to my business school peers.

Have you ever jumped income brackets (either going from low to high or vice versa) and how did your lifestyle change?

My income will more than double after I graduate from business school but I don’t think my lifestyle will change at all because I have so much in loans to pay off!

Do you talk to your peers and family about money?

I only talk to my wife and sometimes my parents. I’m lucky in that if anything bad were to happen, my parents are willing to help out, but it’s not like they can help out that much. The topic of money doesn’t come up with anyone else. The people I know from my nonprofit work don’t care too much about money and I wouldn’t even know how to start a conversation about money with my business school peers. 

Do you worry about money?

I worry much more now than I ever used to. But it’s really due to how much higher my expenses will be after business school and the fact that my wife wants to start having children soon. It's a much larger source of anxiety for me than I ever thought it would be.

Do you splurge on anything? If so, what was the last splurge and how much was it?

My last splurge was paying all this money for business school!

Do you have a plan to make more money?

I’ve read about how you should maximize your income streams and take jobs on the side when you’re working. I don’t know what I would even do, but it’s something I’m starting to give more thought to. Maybe I could tutor students or something.

What would it take for you to feel like you are completely rich?

$10 million dollars in the bank. I read that somewhere in the past so it’s the only reference point I have.

In terms of money, what was something you did in the past that you could do differently?

I think I would have done something different other than work in nonprofits. I would have tried to work as a consultant or at least work in a job that would have sponsored me for business school.

What is your strategy for moving forward now in regards to your big goals in life?

Work hard at my job, hopefully get promoted quickly, and maximize my income streams!