Money Management

How Much Can You Afford to Spend on an Education?

Everyone says that getting an education is the best way to earn more and have a better life. While statistically degree holders do earn more than those without a degree, many people graduate college buried in student loans and then struggle to get out for many years after. How can you determine if a college education is right for you and how much you can afford to spend?

Examine Your Options

Is college or an online university something that you are interested in? What do you want to do with your life? To determine if you should head off to college, first you have to figure out what you want to do. Going to college, spending years working toward nothing and then dropping out is a huge waste of money and should be avoided at all costs. Before you make a decision about school, first make some decisions about life so that you will know what you want.

Figure Out a Budget

When it comes to education, there are some huge variations when it comes to cost. Some schools, like community colleges, are fairly inexpensive and you can go to school for just a few thousand a year. Other schools, like private universities, can be very expensive and cost tens of thousands or more each year. If you are going to graduate with $100,000 in loans, you may be getting in over your head. On the other hand, if you can pay your expenses and tuition while going to schools, it may be a financially achievable option. Education just like any other financial decision should be carefully evaluated to determine its place in your budget. Student loans unlike other forms of debt are not eliminated in bankruptcy filings. You will be responsible for paying back these loans no matter what. Do not get in deeper than you can handle.

Finding Funding

Many times, funding for education is available. If you want to go to school, you are foolish not to examine your possibilities. Does your employer pay for classes? If so, it may be a good idea to take a class or two on your boss’ dime. Do you qualify for scholarships or grants? There are available options for school goers that don’t have to be paid back. Look into these and see what you qualify for. Sometimes an education is more affordable than you might think.

An education is great, however it is foolish to get an education without thinking about if you need it and how you will pay for it. Debt is debt, and if you don’t have a plan, student loans can quickly decimate your financial goals. Before jumping into debt for an education, first consider all your possibilities and find the option that is best for you.

Comments (8)

  • This is a much needed post, Kevin. Too many people I know went back to graduate school just to end up in debt for the next 30 years! Many graduate degrees are grossly over-rated. It seems the way it is setup only people with rich parents can afford to obtain graduate degrees without ending up with six figure debt. The good thing is that grad degrees are becoming less and less important everyday due to the internet and its ability to allow people to start business quickly and cheaply. Have a good weekend, Kevin!

    Reply
    • It sure is. The internet is changing the world, but sometimes it takes the world to catch up.

      Reply
  • I think kids in high school need to understand the long-lasting effects of student loan debt. Many kids probably think ‘oh I will get a great job and paying it off will be no problem’. But it doesn’t always work that way. That debt can cause a lot of heartache, especially if the degree is in a lower-paying field.

    Reply
    • I think a lot of people are learning that the hard way. Eventually the status quo will change for the better.

      Reply
  • Hi Kevin,

    Just found your blog through Yakezie – good stuff here!

    You are spot on about college debt. I wish I would have taken advantage of the school loan counselors and talked with them about the best things to do with loans. But….live and learn.

    Keep it up!
    Tim

    Reply
  • We know many banks now-a-days arrange student loans . This is done not only with a view to get financial profit but also to assist the students who are not financially well of to run their educational expenses. I support this steps of banks heartily.

    Reply
  • It’s a tough one man. Going to launch the Yakezie Writing Contest this month, and I hope we can help some deserving folks w/ their education costs!

    Sam

    Reply
  • Going to college and onwards to grad school is the best option. Provided of course that the subject matter is the one you love. There are a lot of possibilities and scholarships available. If a scholarship grant is nowhere to be found, another option would be to go abroad and avail of lower tuition fees. Generally, going to college in Asia is a lot cheaper… there’s Japan, Singapore and others.

    Best regards,
    Belinda

    Reply

Write a comment