I don’t know if anyone has told you this, but grad school is expensive; really expensive. Not only do you have to pay for school-related items, such as tuition and books, but you also have to take care of items that you may have been putting off, such as getting a new pair of glasses or cell phone.
On top of that, this could be the last time you see your friends for a long time (if not forever), so if you are like me, you’ll want to hang out with them as much as possible before leaving. This friend-time has its own associated costs: movie tickets, drinks, food, concerts, etc.
Finally, there are going to be unexpected costs that all seem to occur around the same time. For me, this includes $1K in unexpected repairs for my truck, which I am giving to my brother when I leave. I could let him pay for it, but then I’d feel like a jerk, since he is still in school.
Before you know it, you find that your savings account is on life support, and those loans can’t come fast enough.
I don’t think I’ll be able to cover everything with cash on hand, so I am going to have to dip into stocks. First I’ll plunder my IBM stocks, which I keep in a separate account. Hopefully, I won’t have to touch my personal account, which is down 30% right now, but I wholly expect to recover and make gains in the next year (come on Crocs….just kidding :) ).
My house could either complicate or simplify things, depending on how things turn out before I leave. If I am able to sell it soon, then I’ll recover the equity, and my financial worries for the next year disappear. If I don’t sell it soon, then I will have to cover its costs (mortgage, property insurance, property tax, lawn mowing, bills) while I am in school. This will seriously put a drag on my financial situation. Can you say ramen and tuna? It got me through undergrad; I suppose it could do the trick again.
In summary, if you plan on going to grad school, start saving for it as early as possible.