By Laura Morrison, July 2014
Ask any student what the essential skills for successfully navigating graduate school are and you'll likely hear some of the usual suspects - time management, subject matter expertise and a passion for learning will almost certainly top any list. But regardless of which field students are pursuing, there's one skill that may be just as important, if not more so, than these others that many students fail to develop: financial literacy.
Far from just the province of business school students and future MBAs, a basic and rudimentary understanding of essential financial processes - budgeting, interest rates, credit and the like – may be necessary in a period where, more likely than not, a student's income is severely limited. Every cash-strapped graduate student may want to cultivate some essential financial skills.
Why Financial Literacy is Important
Once you hit the point of college and graduate school, financial planning becomes a more pervasive and involved part of life. More than just squirreling away money, staying on top of finances in the midst of a major life change such as graduate school takes careful planning, consideration and monitoring. Unfortunately, for many unwary students, this is a lesson learned the hard way. Especially with the rising levels of student debt learners are incurring, it's more important than ever to get a handle on financial details early.
As a Florida-area CBS News affiliate reported, college students are graduating with more student debt than ever. In fact, some are even finding graduate school necessary to procure a job that will enable them to simply repay their loans. Other students are running into difficulty entering later life stages - outstanding loan debt can serve as a barrier to those who wish to buy a house or apply for a car loan.
Brush Up on Your Budgeting
Just like math or science, financial planning and budgeting is a skill that can be developed. Some schools implicitly recognize the need for students to hone their savings skills. Cornell University, for example, offers a yearly workshop on financial literacy for students.
If your school doesn't offer a similar program, don't fret. Just because you're on your own doesn't mean that budgeting has to be an insurmountable challenge. The American Psychological Association made several recommendations for students who need to pinch pennies throughout the course of their degree. Principal among budgeting tips is to keep track of everything. Not just spending habits, but things like meal plans and clothing requirements should be carefully tracked. This way, you know exactly what needs to be spent and when, which can help avoid nasty fiduciary surprises and keep you on track.
One outside-the-box strategy is to look to less conventional sources wherever possible. Need a haircut? Consider a local cosmetology school. Students and teachers there will love the chance to get in real-world practice and the price will be much lower than standard options. Of course, this is just one example, but it's helpful to consider such sources when you're budgeting your way through graduate school.
About the Author: Laura Morrison is the Web Content Manager for GradSchools.com. She earned an MBA from the Rutgers School of Business in 2010.