No Debt MBA

We've been having a lot of success with our $25 per week grocery budget challenge, meeting our goal each week and feeling really good about the accomplishment and what we're eating.  I just wanted to share our strategies for making our budget work each week.

First off, let me state the limitations of our budget.  The $25 does not include any paper, cleaning or other household products, any eating out, or coffee.  The grocery budget is literally only for groceries.  Now that the "rules" are clear here's what we do to come out under budget:

1. Buy generic.  Neither of us has an ounce of brand loyalty and frankly we almost never can taste a difference between generic and name brand.  Ok, last week I picked up a big box of generic cheerios for $2 and SO claimed they tasted like cardboard but I bet that would have been true for name brand cheerios too (I thought they tasted like cheerios).  This week SO picked the cereal and we have name brand Frosted Flakes that were two for $5 and we bought at CVS to use up extra care bucks and paid nothing out of pocket for.  I think they taste like crunchy sugar but it will be my turn again when we run out of cereal.
2. Know your basics and stock up when they go on sale.  We eat lots of pasta, rice, beans, and canned tomatoes all of which have a long shelf life.  The generic prices of these staples are pretty stable so when we see something cheaper we stock up a bit.  By having some very basic staples around you can pretty much cook around what other things are on sale in a given week which is especially useful for buying produce.
3. Find the best place to shop.  We pretty much do all of our shopping for groceries in two places - the cheap grocery store and the weekly produce market.  We lucked out that we're about a half mile walk from both.  Poke around your neighborhood and compare prices on your staples.  Consider coupon policies if you use them (I don't) and the distance you'll have to travel.  Check out your local open air markets.  We find we can get a great deal showing up just before closing and buying what's left.
4. No impulse buys.  Impulse buys are a great way to blow your budget.  Okay, maybe we have them occaisionally, but they are along the lines of a bizarre 25 cent clearance item than a $6 gallon of ice cream.  $6 would completely kill our budget for a week. 
5. Cook at home and from scratch.  We buy almost no processed foods which can be expensive.  This also leads us to eat healthier.  Our meals basically are some combination of carb, protein and a pile of vegetables.  So one night we might have a curry with brown rice, chick peas, onions, tomatoes, green onions and cilantro.  Having the basic formula allows us to use up whatever is in the fridge or on the shelf with very little waste. 
6. Cook nearly vegetarian.  Meat is a rare purchase for us and I don't really miss it.  We use beans, eggs, tofu, TVP, and other vegetarian options in our meals instead.  Beans and a whole grain form a complete protein so don't worry about missing out just because you don't have chicken at every meal.  I'd also suggest trying different kinds of beans.  Our staples include kidney, black, garbanzo, and cannellini, but neither of us is a big fan of pinto.
7. Buy spices at CVS.  CVS sells all of your favorite spices for $.99 per jar.  My dad claims their recent $.88 sale will be permanent, the new price, but either way it's way cheaper than grocery store prices.  
8. Reusable bags.  Our grocery store gives us $.05 back per reusable bag we bring.  CVS will also give you a $1 coupon for every four visits you make with a reusable bag that has their green bag tag on it.  So we might get almost a dollar back every two weeks by bringing our own bags.  It's about 2% of our budget.  It seems silly but the yuppie bags (as we call them) are also a lot easier and more comfortable to carry walking the half mile home from the store.  Plus, I like free money.

That pretty much covers how we do it.  For more inspiration check out 30 Bucks a Week.  The couple writing that has been keeping track of their grocery spending a lot longer than us and keeps it at $30 a week in New York City.  And while I will probably never post photos of our food here they document their meals pretty well, really demonstrating how far (and deliciously) a small grocery budget can go. Cheap Healthy Good is another great resource for good food on a small budget.

Poets and Quants recently announced that the hiring statistics for the class of 2011 are looking really good.  More offers and better pay reversing some of the damage from last year and the financial crisis.  Unfortunately the data they have available is only for all schools aggregated and top schools can't be pulled out specifically.  

I hope this trend continues and the pay and offers for the class of 2013 are really good :)

I've had a stash of articles that I've been meaning to write about but don't really fill a whole post so let me clear my back log so I can actually stay current.  Here are some articles I found interesting and my thoughts:

• The treasury is borrowing money from the Federal pension system to bankroll Federal government spending until Congress can stop arguing about the debt ceiling and actually address the problem.  This measure only buys breathing room until August at which point we may default on some obligations unless something changes.  The article says the borrowing isn't a problem because the Fed is legally required to pay it back, but it would make me pretty nervous if I were a federal retiree since a lot of states basically did long term borrowing from their pension systems in the form of underfunding and now retirees are paying the price in some areas.
• On a related note, I've been seeing many bloggers and news outlets comparing the Federal government sticking to a budget to an American family.  I find this a bit silly because historically neither really has been successful budgeting and Reuters has an article that agrees with me and gently mocks the comparison. 
• Apparently it's becoming common practice in some restaurants to round a bill to make giving change easier.  Rounding down is more common than rounding up, but both happen and the waiter rarely explains ahead of time.  I'd appreciate my bill being rounded down but it would really irk me to have my bill rounded up for the restaurant's convenience.  If easy change is so important to them the prices on their menu should be changed to round numbers instead of altering the bill without communicating with customers.
• Apparently graduate schools outside the US have improved significantly in quality and reputation over the last decade and US schools are beginning to see drops in international applicants because of it.  There is also more international interest in graduate degrees and international students outnumbered Americans in taking the GMAT.  I think the top US graduate schools are safe for now, but long term they will face more competition to stay in the lime light.  This will probably hit schools below the top tier a lot harder since it will be very tempting for international applicants to stay home and get a comparable degree.
• The LA Times debates the end of the 30 year mortgage due to Fannie Mae and Freddie Mac's diminishing dominance in the mortgage market.  I agree with their analysts' conclusions that the 30 year won't go away, but instead will become more expensive and include additional fees.  Americans are just too hooked on it and credit in general for banks to stop offering what is a very profitable, but somewhat risky product.  So prices will be raised to offset risk.
• Forbes profiles executive MBA programs for under $50,000.  In my mind these would likely be the best option in only a few circumstances.  Most executive MBAs would be only worthwhile, in my opinion, if your employer is paying for it.  As an entrepreneur you would either want a better network than these would provide or would not need the credential at all and could pursue classes or independent learning in a specific and self directed way for much cheaper.  But I'm sure there are counter arguments here and cases I'm not seeing.  Anyone have one?
• Student loan debt is now officially bigger than credit card debt according to the New York Times.  I suppose this makes sense since educational costs have far outpaced inflation, but it's still a scary thought since student loans are so tough to get out of compared to credit card debt. 
• Complementing the New York Times article, Today has a student loan debt clock up.  Not sure what the point is since student loan debt isn't a shared burden like the national debt, but an interesting concept.
• Finally, as others have posted, there's an interesting study out showing the pathetic state of most American's finances.  The main point is that almost half of Americans probably wouldn't be able to cope with a financial emergency on the order of $2,000.

I've been getting more visitors from Google lately which is really exciting.  I'm sure the feeling will wear off but it's a pretty cool feeling to know that people are searching for things on Google (which I do all the time) and finding my blog and the information they're looking for in what I'm writing.  ... or at least trying to find information here.  I've been looking over the key words that get people here and it's fascinating.  Most are pretty spot on to what I'd expect like "student loan debt mba out of control", "mba debt" and "six figure mba debt".  Others are a bit weird like "federal student for mba", "to beat the odds", "for the local library system", "i'm glad i went to business school" (that's always good to hear) and "moneymamba" (wrong blog).

But some searches are legitimate questions relevant to this blog and I'd like to address them as time goes on.  At least that way your question eventually gets answered even if the answer isn't here when you first look.  In theory if I do this I should be writing stuff that answers questions that people actually have instead of just what interests me. But let's be honest there will be plenty of that too.  So today I'd like to address the person who came here looking for "saving for MBA". 

Personally, I think if you're planning to pay for an MBA yourself (and if your employer isn't offering it's best to assume this, better safe than sorry) it's incredibly valuable to save for it.  The financial benefits of saving are two fold.  First, you will have savings to pay for a portion of your MBA and will incur less debt.  Second, you will be used to living on a little less and your lifestyle will cost less both during and after school so you will take on even less debt and be able to pay it off faster.  Let's say you save $5,000 in a year for your MBA that you would have otherwise spent.  Assuming you maintain the reduced spending, you will have $15,000 less in student loan debt when you graduate and the space in your budget after graduation to pay the rest off on a faster schedule.

So if you want to save there are three main places to put the money.  Which one you choose will depend on a variety of factors in your situation.  Let's do some pros and cons for each and just keep in mind that none of these are mutually exclusive and, in fact, you'll be in the best shape if you maximize the benefits from each.

Roth IRA
Pros: This might be the most advantageous savings vehicle for students headed to schools with very liberal need-based aid policies.  The contributions to a Roth IRA account can be withdrawn at any time and for any purpose penalty free and many schools will not count the assets in the account as being available to fund you education, resulting in more aid.  The FAFSA does not include retirement accounts either.  So here you can save up to $5,000 per year without being penalized for it in the least depending on your school's policies. 
Cons: Although earnings accumulate tax free, you will have to pay income tax on them if you use them for qualified educational expenses.  If you withdraw the earnings for non-qualified expenses you will also have to pay a 10% penalty.  Also, if you're using the Roth as a savings vehicle for grad school you can't be using it for retirement, which is a big bummer since it's savings power can really compound over time and retirement savings take the best advantage of this.  You can't re-contribute for the years of contributions you pull out for your MBA so the opportunity to grow retirement savings tax free would be lost for those years.

529
Pros: A 529 plan is most advantageous when you have time on your side.  The growth in a 529 plan is free from federal tax when used for qualified educational expenses.  There are also many states that offer significant state income tax benefits when you invest in your state's plan.  
Cons:  Withdrawals from a 529 plan that are not used for qualified educational expenses are subject to a 10% penalty and you will have to pay income tax on the earnings.  Like a 401k, you will have fewer investment choices in a 529 plan and they may be really good options or really poor options.  There may also be fees associated with administering the plan.

Online Savings Account
Pros: This option offers the most flexibility and simplicity for your money with no penalties, fees (if you select the right bank), tax implications or paperwork for withdrawals.  When you use this money to pay for qualified higher education expenses you can claim a Lifetime Learning credit or tuition and fees deduction on your federal tax return.  You cannot claim these benefits for money used from a 529 plan (you'd sort of be double dipping for benefits if that makes sense).
Cons: However, savings accounts also offer the fewest benefits in many ways.  There are no tax advantages to a savings account and savings account balances are considered fully available and liquid in financial aid formulas.

So what does this mean? Well, if you're fortunate enough to have a lot of disposable income you probably will want to contribute to all of these and max out the Roth IRA.  If your state offers tax benefits for 529 plans you may want to compare those benefits to the lifetime learning or tuition and fees deduction you might otherwise be able to claim further down the line.  Odds are that you'll have plenty of expenses left over to claim on your federal return even after using all of your 529 money simply because business school is so expensive.  The state tax benefits may also be more worthwhile since you are making money now, but will be making a lot less while you're in school.

Once I knew I was interested in business school I started a 529 for myself since my state had a decent plan and offered some income tax benefits.  I continued maxing out my Roth IRA but invested more conservatively; I didn't want the value to tank just before I needed the funds for business school. I also put any ideas of creating a taxable investment portfolio on hold and started putting away large amounts of cash to pay for my degree.  Currently I'm trying to avoid withdrawing any money from my retirement accounts, even my Roth, to pay for my degree.  I'd like to keep those funds for retirement.  I'll probably revisit this later this summer and next year as I pay for my first and second years.

 Regardless of where you put the money and your strategy, any savings you accumulate will benefit your finances in the long run.  Most schools discount the value of your savings to reward you for having accumulated them and to encourage more students to do the same. This means when you have $1,000 in a savings account your aid will not be cut by the whole $1,000.  You'll still come out at least a little ahead for having put the money away.

I am happy to report that so far the $25 grocery budget has been a success!  We're in week six and so far have not run out of anything and have been having healthy, filling meals with no problems.  We've even been replenishing pantry basics like flour, oatmeal, and spices that are irregular purchases as we go.  Here's how our spending has worked out for each week:

Week	Produce	Grocery	Total
Week 1	$10.00	$8.38	$18.38
Week 2	$9.50	$13.97	$23.47
Week 3	$10.00	$13.68	$23.68
Week 4	$10.00	$13.19	$23.19
Week 5	$8.00	$16.29	$24.29
Week 6	$0.00	$18.83	not done

We never actually got an envelope to use in a cash envelope method, but I've had no problem just putting it on the credit card and keeping a tally.  Since it's a weekly budget we usually only make three shopping trips each week (produce, other groceries, and a oops we forgot/ran out of milk trip) and it's been easy enough to keep track of. There's a market near our place that offers really good deals on produce so we stock up at the beginning of the week with lots of fruits and veggies.  This week we had a ton of leftovers that we needed to use up (we got about 5lbs of broccoli for $1 last week among other purchases) so we decided to skip the market.

I am currently debating if the potential "rollover" money from under spending in previous weeks will be fair game to spend later.  On the one hand we've been doing pretty well without it.  On the other hand it would be nice to stock up on a few basics and a small indulgence or two.

I recently received my financial aid package from my business school of choice and it was very, very good news to the tune of $34,500 in free money each year.  This was significantly more aid than I was expecting to receive and I've been very grateful.  I think some of my financial preparation for business school has contributed to my grant good fortune.  Here are some steps you can take to ensure you receive the full aid you're eligible for under your school's policy:

1. File your taxes.  Graduate programs pretty much all ask for tax returns to evaluate and verify your income for up to several years prior to entering your program.  If you are unable to produce these documents you may become ineligible for need-based aid.  You also don't want to owe money to the IRS since they can, among other things, dock your wages.  So once you start thinking about graduate school review your tax returns and make sure you're all settled up.
2. Make sure you are filing correctly and claiming all the deductions you are eligible for.  Mistakes in your tax returns can derail your financial aid application.  You also want to make sure that you are claiming all of the deductions and credits you are eligible for especially above the line deductions.  Essentially, you want to make yourself look as poor as possible on your tax returns. Also paying less in taxes means you have the money to save more to pay for your degree.
3. Contribute to your 401k.  Most graduate school and the FAFSA give preference to retirement funds, valuing them as less available than savings account balances.  You also pay less in taxes when you contribute to a 401k and dramatically lower your AGI on your return.  If you were going to save a large amount of money anyway, doing so in a 401k would likely increase the amount of aid you'd be eligible for.  Many schools will not consider retirement assets up to a certain level such as $100,000 as being available for your degree.  That's a large amount of money you can shelter.  The downside is that you cannot access this money without significant penalties to pay for your degree. However, having solid retirement savings in place can increase your ability to quickly pay off any student loans you do take on after you've graduated. 
4. Max out your Roth IRA.  This tactic is almost a no-brainer.  With a Roth IRA you can have it both ways - you can get a tax advantaged, school ignored savings shelter and you also have the option of pulling out any contributions you've made penalty-free to pay for your education.  The Roth offers the most flexibility for anyone looking at graduate school. 
5. Start a 529 plan.  These plans offer several advantages.  I've read in some places that the FAFSA and other financial aid formulas may count these funds at a lower rate than liquid savings.  The growth in the plan is tax free when used for educational expenses and there may be significant state tax benefits in your state.  Contributing to a 529 also demonstrates that you've made a conscious effort to save towards your degree's costs, though I'm not sure how much that would actually help your aid package. An important consideration is to see if your plan allows same-year withdrawals as this will dictate the timing of your contributions and distributions to some extent.
6. Accelerate expenses.  Pre-paying any expenses you might have will lower your available assets on your financial aid application often resulting in more aid.
7. Defer income.  Unless you can defer the income until your last year of graduate school and after you've finished all yearly applications for aid, this won't make a big difference in your aid package since you have to state income every year you apply for aid.  However, deferring income to a year when you're in school means that you will be earning less and the money will be taxed at a lower rate.  This is an area to think about when you consider a transaction with capital gains or if you are self-employed.

These are just a few way that you may be able to tune your finances to be more eligible for need-based aid.  It is very, very important to only use legal and honest methods for upping your financial aid package since any dishonesty would likely result not only in no aid but also in no degree at all.  Make sure you fill out forms as soon as possible in case aid is rolling and take a second look over anything you submit for misplaced decimals or forgotten assets.   Aid formulas and funds vary significantly from school to school and these methods may not yield any significant benefit for you, but there is little harm in contributing to retirement or 529 accounts and making sure your tax returns are filed correctly.

Business school is supposed to be pretty busy with classes, speakers, clubs, networking, researching companies, socializing etc.  We also don't exactly lead stress-free lives now.  But regardless of how full my calendar gets, how many things I need to get done, or the social outings scheduled for the night I will make time to cook. These days nearly every meal I eat is prepared by me or my SO at home.  We eat out for about one meal a week and might attend a potluck for another. I expect this consistency to waver a bit while I'm in school, but to still mostly maintain home cooked meals as my primary food source.  Here's some reasons why:

1. It saves money.  Shocker here, right?  Generally speaking, meals are $1 or less when we tupperware it or prepare it at home. It's hard to beat that.
2.  It keeps me at a healthy weight.  I gained the freshman five, sophomore seven, junior five, and senior eight while in college.  That's 25lbs.  Once I graduated and starting cooking for myself instead of eating in a cafeteria all the weight just sort of disappeared naturally and I felt way better than before. I refuse to repeat this experience with business school.  Plus, on my last visit to campus I got the definite sense that students are a little bit porkier than prospective students.  Not surprising, but I don't want that to be to me.
3. I eat healthier when I cook.  My home cooked meals have fewer calories than take out or cafeteria fare which keeps my weight under control, but when I cook I also incorporate healthier ingredients.  Our meals have more vegetables and whole grains and less cheese, meat, or partially hydrogenated oils than nearly anything you can buy for a reasonable price. 
4. It gives me important time to connect with my SO.  Unfortunately business school is likely going to mean less time spent with my significant other.  What little time we will have we will have to make the most of.  Cooking accomplishes all of these other goals, we get fed, and it's something we really enjoy doing together.
5. Cooking is excellent decompression time.  I'm thinking that it's precisely because my schedule will be so full during business school that I should take extra effort to make time for cooking.  Cooking relaxes me and allows me to transition from work to home.
6. My salary coming out of business school may be higher.  People at a healthy weight make more money and I fully expect this to hold true graduating from business school.  One would also expect confident, healthy people to perform better in interviews.  There have been several studies linking weight gain to lower incomes, job prestige and accumulation of wealth.  For example, one found a 1% increase in BMI corresponded with a 0.6% reduction in income and a 0.4% reduction in job prestige.  I don't like those trends.  That's about $700 per year lost on a newly minted MBA's salary for only a pound of gained weight.  If I repeated my undergrad weight gain I'd be losing out on over $10,000 in salary and face an appreciable drop in job prestige.  No thank you.

Making time to cook is an investment in my long term health and well being.  It also helps my stress levels, self confidence and relationship with my significant other. Finally, there are major financial savings from my cooking habit.  In this light, the question almost becomes why wouldn't I cook.

Do you cook at home?

So the title of the blog is "No Debt MBA" and I've set myself a goal of graduating from a top rated business school with an MBA and without any debt, student loans or otherwise, while knowing that the program's total student budget is around $165,000 for two years.  I only have $107,000 and $70,000 of that is in retirement accounts that I don't want to touch and while I just got a wonderful financial aid package this still sounds a little crazy, right?  To make up the gap of around $59,000 ($165k cost - $37k liquid assets - 2*$34.5k aid) it seems like I'm going to have to eat cat food, be a hermit, and never sleep or study because I'm working so much.  I'm pretty sure that that's not going to be true.  At the very least never studying and or socializing would seriously hinder the two biggest goals of most MBAs - learning and networking, defeating the purpose of getting the degree in the first place.  But I also can't say I know where all of that money is going to come from yet either.

Regardless, you may be wondering why the heck I'd put myself through any of this.  You might say that student loans are supposed to be good debt after all.  They're cheap money and are to make an investment in your future.   People do it all the time and do just fine.  No one says you have to take out loans for the whole thing, but do yourself a favor and relax about the whole money bit so you can really get the most out of a once in a lifetime experience 

Most of that is absolutely true.  But none of it is absolute fact.  While student loans are considered "good" debt, they're also the hardest type of debt to get rid of, following you even through bankruptcy.  Student loans are for life and maybe even beyond if you have cosigners.  They also aren't particularly cheap right now.  Though I've yet to look at private loans, students are generally advised to look at Federal first and those are fixed at 6.8% and 7.9% at the moment.  Federal student loan rates have not really followed the market down and aren't really cheap money in this economy.  Jumbo mortgages can be had for less interest and fees.  I've also previously discussed the cost of student loans - by paying for the degree with loans I'd pay for it at least one and a half times.

I'm also concerned with the risk of overburdening myself with debt, banking on a job search two years from now in an economy that may still be sluggish.  There has been plenty of news coverage recently of students graduating from programs with six-figure debt but unable to find a job.  I know someone who graduated from my school of choice and nearly a year after graduation still hasn't started work, though she did finally secure a position.  Though I don't know the specifics of her financial situation, I imagine having a typical debt load would be extremely stressful during that year of searching.  Sure student loans can go into deferment for a number of reasons but the vast majority of student loans will accrue interest during that time.  If you graduate with a "typical" debt of $87,000 then the first year of deferment at 6.8% is nearly $6,000.  At 7.9% it costs you $7,000.  The interest compounds - imagine the magic of compound interest working against you.

So really I guess what it boils down to is that I'm concerned about risk.  Risk that the job market might not be so hot when I graduate, risk that my new shiny MBA degree might not do the career magic that $165,000 price tag implies, risk that I won't be able to pay my loans, risk that I won't want to take a job where I can pay my student loans.  I also would like to be able to work for motivations other than money in my career and have freedom to pursue my own interests and projects or start a business eventually.  All of these worries lead me to think that minimizing my student loan debt would be a really worthwhile investment for me.  But while I was thinking about this I had the small epiphany that I could just try not to have any debt at all.  I mean, who knows? Graduating with debt may be an entirely doable proposition, but I would never know unless I tried.  By setting a really challenging goal for myself I think I'm more likely to succeed at my base goal of reducing risk and increasing freedom through minimizing debt.  Plus not having a single student loan repayment bill show up one month after graduation would be a really sweet graduation present to myself.

I'm not against debt in and of itself.  I do believe in leveraging debt in some situations, though I never have.  But I also believe that student loans, especially once they exceed $25,000, would be a significant hindrance to my career, freedom and choices.  I also know that without this goal I would still worry and be anxious about my financial situation and any student loans I took out.  If anything I hope this route is less stressful because I'm meeting my fears head on and doing my best to address them. 

What do you think about my goal?

The Totally Money Carnival is up at Retire by 40 and I'm in it!  My post on buying more happiness is included.  Here are some other articles from the carnival I liked:

• In China, Women Control the Budgets at MoneyMamba
• Lifestyles of the rich and the famous: teenagers’ unrealistic salary expectations at Totally Money
• Is College Worth It? at Free Money Finance
• Preparing for a Test at the Last Minute at The Amateur Financier
• Debt might be a good reason not to save at Retire Happy
• How to Retire Wealthy at My Journey to Millions

I'm also in the Festival of Frugality that just came out at High Yield Savings Accounts with my post on CEOs as MBA students.  Some of the posts I liked from there were:

• World Cocktail Week: How to make cheap and easy cocktails at Totally Money
• The Best Things to Spend Money On: Spending that Reflects Your Values at PT Money
• 5 Ways to Reduce the Risk Involved with Retirement Savings at Spruce up Your Finances

I feel like there's a pervasive assumption that anyone getting a top notch professional degree is going into debt to do so. Of course this is not unfounded.  There are dozens of stories in the media about how law, business, and medical school students are graduating with back breaking debt and many of them don't even have jobs.

But I also know that there are plenty of people out there not paying a dime for their degrees.  There are students in MD-PhD programs whose whole educations are being paid for through research funding.  There are also plenty of business school students, full time and part time whose companies are picking up the tab for their degrees.  These tracks are not at all uncommon and result in degrees and zero student loans.

Less prevalent, but still common, are students who pay for their whole degree in cash either from their own pockets or their family's. Like the sponsored students, these cash heavy folks will never even fill out a financial aid form.

Finally, there at least used to be the model of working your way through school.  With the huge price tags now associated with just one year's tuition at a good school this may not be possible without scholarships and grants - merit or need-based.  After all, it's pretty hard to earn $50,000 after tax plus living expenses while a full time student.  But many schools have generous scholarships and financial aid so it appears possible to potentially still graduate without debt. At least I hope so given this is my path of choice.

With these routes to a debt-free degree available it irks me that most discussions of these degrees presume student loans that will be nearly impossible to shake and a ten-year payback period with no mention of an alternative.  Yes, these degrees are very expensive and targeted mostly at people in their 20s who haven't had a chance to accumulate as many resources, but assuming six figures of debt for every graduate is almost a self-fulfilling prophecy.

What do you think? Am I way off base here?

Today is a good day.  I got my financial aid package and the news is excellent.  They've approved me for some Federal loans, no surprise, and given me the maximum amount of subsidized Stafford loans - the best Federal loans to have.  But the best news is the grants.  Drum roll please......................................

As a side project tangentially related to our $25 grocery budget I'm trying to give up snacking.  In the past I have been a huge fan of snacks between meals typically eating one around 10 between breakfast and lunch and at 3 and 5 before eating dinner around 6.  Now this system works great for me when I have a fixed schedule.  I pack my snacks with me so they're fairly cheap, eat slightly smaller meals, maintain a weight I'm happy with and never get too hungry.  That last point is key because I get to be a cranky, jittery, unfocused mess when I get too hungry.

So my current system works for me... most of the time.  The problem is when I have an irregular or particularly busy day and don't squeeze my snacks in, that's when the system breaks down and my body goes haywire.  When that happens I'm more likely to impulse buy something to eat, eat something unhealthy, or be unproductive for the rest of the day.  Since I'm anticipating more busy and hectic days in the future and a less regular schedule I'm trying to wean my body and my habits away from snack time.

I'm hoping that this will accomplish two things:  1) that I will be more resilient with changing schedules and 2) that I will be able to better manage my hunger in general.  I also anticipate that this will help decrease our food costs by a smidge - we will be buying fewer items each week. I'll also be increasing my portions slightly at each meal so it'll encourage us to buy in bulk a little more. However, the monetary benefits are slim enough that they're mostly a perk not a goal.

So far I'm doing pretty good about cutting out my morning and afternoon snacks but I have been really hungry when I get home which means I've still been eating a small snack before cooking dinner like a piece of fruit, bread or something.  However, the last few days have not been as bad as the first few days so I'm going to stick with it and see if I can get down to just three meals a day.  Wish me luck!

Do you snack?  How does it affect your spending?

Here are some of the articles I read this week that I thought were worth passing along:

• Why you should sweat the small stuff when it comes to money at Totally Money
• Financial perks contractors can't take for granted at Smart on Money
• How Much Money Do You Need To Start Your Own Business? at Life and My Finances
• Personal Finance and the End of Days at The Simple Dollar
• Four Ways Your Spare Time Can Lead to Thousands of Dollars at Studenomics
• Would $12,000 Convince You to Move Closer to Work? at Krantcents
• Reader Story: I’m a Sugar Mama (and Proud of It!) at Get Rich Slowly
• When Grandma Runs Out of Money at Her Every Cent Counts
• Ten More Reasons You Need to Quit Your Job Right Now! at Freakonomics
• The most important lesson HBS taught me at Military to Business
  

Something light for Sunday!

My S.O. and I were feeling wiped out and brain dead the other night so after doing the dinner dishes we cuddled up to watch a movie over Netflix.  While looking for something lighthearted, funny, and not intellectually challenging in the instant films we found The Naked Gun.  We'd both heard of it, never seen it and were in the mood for a blast from the past so on came the film.  Our movie decisions are rarely this smooth. The movie follows police detective Frank Drebin as he tries to uncover a plot to kill Queen Elizabeth.  Heavy on slapstick and puns the movie also offers a few lessons in financial planning:

• Use your family connections - The director's mother played the role of the bad guy's secretary.  She did an excellent job and it probably saved them money on casting and kept more of the film's money in the family.  Plus who doesn't want to turn their mom into a hypno-assassin?
• Have appropriate disability insurance - O.J. Simpson stars (pre-murder trial) as a cop who's shot numerous times while trying to conduct a heroin bust, has attempts made on his life in the hospital, and falls down the bleachers in a baseball stadium at the end of the movie.  If you have a risky job you need to be extra sure to have good insurance if your employer doesn't provide you with it.
• Have a medical care directive - While O.J. is in the hospital, near-comatose, Detective Drebin interviews him to try to figure out what happened.  Afterwards, he tries to comfort the cop's wife by telling her he will likely die or if he doesn't he can't return to the police force as a vegetable.  The wife can only cry.  If something happens to you your family will be a mess and onlookers won't be much help, plan ahead so if something terrible does happen you have a clear plan that will make decisions easier.
• Buy property insurance if you can't replace it - During the film the villain's penthouse apartment is set on fire and all of his priceless, carefully procured treasures are destroyed when detective Drebin breaks in to look for evidence.  A fugitive crashes a car into a gasoline truck, a missile transporter, and, riding the missile, a fireworks factory.  The fireworks factory explodes leaving only wreckage behind.  Unexpected catastrophes happen, take reasonable steps to prepare for them and buy insurance where you can't afford to self-insure.
• Have a big emergency fund - Detective Drebin is nearly fired (or put in jail) numerous times during the film.  Though bumbling, Drebin isn't completely inept and he is committed to his work.  You could be fired or laid off at any point, have several months of living expenses saved to get you through.
• Save for the future - At the start of the film Drebin is convinced that women and cops don't mix and it sounds like his only love will be his job for the rest of his life.  But by the end of the film he's madly in love and proposes with a sparkly engagement ring.  You never know where life is going to take you, but you want to be in a good financial place to take advantage of it.

 Have you seen The Naked Gun?  What did you think?

Poets and Quants has an excellent article up about what CEOs were like when they were MBA students.  I really enjoyed the article since it takes these really remote figures and makes them feel really approachable and human.  Hearing about Immelt's (GE's CEO) feelings of being overwhelmed is really comforting.  It reinforces that no one is perfect or super human and that even if I can't get done everything I want to do in a day it doesn't necessarily mean I'm not CEO material. Though J P Morgan's CEO says he was always prepared for class.

Of course the article has several quotes that promote the value of the MBA degree and various programs, but it was the quotes from Pepsi’s Indra Nooyi that I found most interesting:

Nooyi recalled how she was virtually broke in her first year as an MBA student. “Those were very tough times.,” she said.  “At the end of the month, if I saved $5. I thought I had died and gone to heaven. I was totally and complete broke. I had no money to buy clothes. Nothing. Absolutely nothing. I worked the front desk of Hadley Hall from midnight to 5 a.m. at $3.35 an hour, the minimum wage. That money was the grocery money for the week.”

[...]

 When Nooyi first interviewed for summer jobs, she had no business suit, instead wearing a sari. It didn’t keep her from getting an MBA internship that allowed her to afford two suits by the time she returned to SOM for her second year. After graduating with the MBA, Nooyi first went to work for Boston Consulting Group for six years. She joined PepsiCo in 1994 as chief strategist, becoming chief executive in 2006.

It's really nice to hear an amazing success story of someone who's been in my shoes.  It's also really nice to hear that they too were on a really tight grocery budget. I've also been putting off buying a good interview suit for years.  Of course I'm not wearing a sari, just an older, less nice suit.  A budget like Nooyi's also implies that she wasn't taking out student loans for living expenses.  How much of that practice is new and if it is new, which I suspect, why did it come into force?  I imagine graduating without debt would allow you to take more risks with your career and reap more rewards.  You might also have an easier time with entrepreneurial ventures - able to take a lower or no salary and take on debt for the business perhaps.  I'd be interested to see the average debt loads of CEOs compared to their graduating classes though I know many are not MBAs.

Do you think there might be a correlation between success and graduating without debt?

Today I'm happy that I'm headed to business school and not law school.  Stereotypes about business school students and lawyers aside, I found two interesting articles at the New York Times which discuss the financial implications of law school.

The first of these articles is Is Law School a Losing Game? and although it's a few months old by now I doubt the score has changed much.  The article profiles several law school graduates with six-figure debts and makes the case that the only one profiting from these degrees are the granting institutions and Sallie Mae.

The article also has an interesting discussion about how law schools finesse and pad their employment figures.  A student can be considered employed after graduation no matter what job they're in and if they are using their degree- janitor or law firm partner, you're employed.  It also mentions that some law schools hire back their students around survey time to boost their numbers, if lagging.  All of this to hid a flagging job market for law degree recipients.

Although an MBA is not as specific in determining a career or job title as a law degree I have to wonder if the same trend is taking place on business school campuses in the wake of the 2008 market crash and recession.  It seems probable though employment numbers certainly did dip.   This article did make me a bit nervous - it hit on my core fear about entering an MBA program.  What I fear most is that I will take two years of my life and nearly six-figures of my money and up with the same or worse job prospects I have now.  However, I'd also worry if I had no doubts because it would mean that I had certainly over looked something.  There is no guaranteed path to riches.

The second article, How Law Students Lose the Grant Game, and How Schools Win via My Money Blog, adds further faults to current law school practices.  The article describes how law schools hand out numerous merit scholarships but then place requirements on them that are impossible for all recipients to meet such as being in the top 25% of the class when 30% receive the grant guaranteeing that some students will definitely lose their grant in the first year. The schools pull in better qualified students but don't have to pay up on the full incentive.  What's worse is that administrators at these schools speak really poorly about their students saying they haven't read the course catalog or would tell a different tale if given truth serum.

Combined, these two articles paint a really nasty picture of law schools today and place the blame squarely on the schools, somewhat on the students, but fundamentally on the rankings system and US News for driving the obsession with numbers and thus the overall tactics and trends affecting law schools today.  I know that similar games are played at business schools all over the country but what's comforting to me is that neither article mentions the very top tier of schools.  There is no mention of Harvard Law or Yale.  Perhaps these schools don't have to stoop to that level of game playing and that thought is comforting to me.  Hopefully at the very top you are closer to a what you see is what you get picture of the graduates' prospects.  Of course any information coming from the school will likely be processed through rose-colored glasses but I can hope at least that I am not being wholesale duped.  Yet another reason to not place much stock in absolute rankings.

What do you think of the US News system and the tactics employed by professional schools?

I just wanted to mention that I was featured in the Festival of Frugality over at Canadian Finance Blog this week for my post on reducing the costs of applying to business school.  Thanks to Tom for hosting and selecting my post for inclusion.  Here are some of the posts I found valuable from the festival:

• How to save money on Amazon purchases @ Chief Family Officer
• How to be satisfied with less @ Simple Life Habits
• Income vs Expense: Where Should You Focus Your Time and Energy? @ PT Money
• Meatless Mondays @ Smart Frugality
  

Let's say that I take some amount of loans out for just my second year of the MBA program.  The loans have only one year to accrue interest in school and I can take out a max of $8,500 in subsidized and $12,000 in unsubsidized Stafford loans and the rest can only be PLUS loans.  This isn't entirely accurate as it ignores the private student loan market, but let's accept it as a simplified worst-case scenario.

Loan Amount	Loan type & rate	Interest per year	Fees	At graduation	Payment	Total paid
$8,500	Sub. Stafford 6.8%	$0	1%	$8,585	$99	$11,856
$29,000	above + Unsub Stafford 6.8%	$816	1%	$30,106	$346	$41,575
$50,000	above + PLUS 7.9%	$2,475	4%	$53,605	$630	$75,617
$65,000	above + PLUS 7.9%	$3,660	4%	$70,390	$833	$99,971
$82,349	above + PLUS 7.9%	$5,031	4%	$89,803.53	$1,068	$128,113

That ends up being pretty expensive over time!  Even with no interest during school and a 1% loan fee I'd pay 39% more by financing the $8,500 instead of finding another way to pay for it.  At the high end, you more than 55% more by financing the entire student budget.  Of course sometimes you don't have the cash to pay, but over $20,000 of the student budget is living expenses.  This makes a really good case for living cheaply.  Going out for drinks is no longer a good deal if your $20 bar tab becomes $30.  Similarly, while I might pay $30 for a dinner out somehow $40 doesn't seem as reasonable.  With that math I'm not sure how anyone can justify financing living expenses.  Just another reason for me to stick to my guns and take on as little debt as possible.

Applying to business school can be extremely expensive.  With application fees often running at $250 or more, just applying to your top five choices can exceed $1,250.  That doesn't even include all of the associated expenses of applying.   The total could easily run to more than $2,000 if you're not careful.  So what can you do to minimize this outrageous expense?  After all, you still actually have to pay for the degree once you get in.  I think I paid roughly $400 to go through the application process in total.  Here are a few areas I saved in and some notes on how you can too:

Used GMAT books - New study materials for the GMAT can be a really big expense.  List prices for review books are usually around $40, and can be more if you're looking for a certain name brand.  At three study books that's $120. There's a used book store for the local library system near where I live that sells one year old, not written in GMAT books with CDs for $2.  That's about 90% off the Amazon price and 95% off bookstore prices bringing your total down to a nice, manageable $6.  Barring that you could look to friends, Craigslist or Amazon for gently used books.  When I was done with mine I gave them away for free. You could be the lucky recipient of someone's books.

Pay once for the GMAT - The GMAT is a pricey test to take at $250.  You don't want to have to pay for that twice.  So study early and often and take plenty of practice tests to make sure you're ready for your big day.  Study harder than you think you need to and get some sleep the night before so you only need to take the GMAT once.

Apply to as few schools as possible - The application fees (~$250), transcript fees from your undergraduate college (~$15), score reports for the GMAT (~$28),  and, heck, even postage can really add up.  Don't apply to schools just to see if you can get in and don't apply in general if you don't want to go.  Applying to Harvard just so you can say you got in to Harvard is silly if you know you never want to leave the West Coast.  Really research each school to make sure the money and all the time you spend applying is a worthwhile investment.  I only applied to one school, this saved me a bundle of money.

Look into fee waivers - It can save you more than half of the cost of the two most expensive items on the list - application fees and taking the GMAT.  Waivers are pretty uncommon but it can't hurt to try especially if you're straight out of undergrad or have a really low income.

Avoid extra costs - There are a lot of services, books, and other gimmicks out there aimed at business school applicants.  Avoid them.  If you feel the need to read advice about getting in to your top choice head to the internet or your local library instead of buying over priced books that are just one person's opinion.  If you want help applying ask friends or family for advice or help instead of paying some consultant $100/hr to do it.  Most of these business schools have been selecting students for a very long time and they've gotten pretty good at it. Check their websites for information (free and from the horse's mouth), take some deep breaths, and you'll be fine.

With some legwork and luck you can easily stay under $750 for the application process.  Which is good because you'll probably need to pony up around $1,000 for a deposit once you get in.

Here are some of the interesting things I found to read this week:

• Net Worths by Age Groups at Free Money Finance - I found this data on median and 25th and 10th percentile net worths by age group to be fascinating and a little disappointing.  I'm nearly to the 10th percentile for my age group! But the median is so small - my peers have what I'd consider a very low net worth.
• Your Take: A Driving Tax? at Bargaineering - A driving tax based on miles driven is an interesting question.  I'm not sure our government has a good handle on taxing the environmental impacts of driving.
• Housing Bubble History: Book covers from 2005-Present at My Money Blog - In hindsight these book covers are hilarious.  How did no one see how ridiculous it was at the time?
• What is the "Bottom"? at The Simple Dollar - This article raises some really good points about helping others in financial trouble.  It also made me feel really bad for the reader who wrote in - she helped out of the goodness of her heart and was treated very poorly.  Her sibling wouldn't even clean up their dog's waste when it went in the house!
• So You Want To Invest In Real Estate? A Tale of How One Average Guy Got Started at 20s Money - We've been considering purchasing a rental property for a while and it's a big decision so any extra  information is really useful.
• Coupled Up=Money in the Bank at Well Heeled Blog - The comments were good.  It was interesting to hear how living together impacted other people's relationships.
  

My S.O. and I are pretty frugal by nature, but with grad school coming up for me and a general sense that we might be able to save more than we currently are we decided to kick it up a notch and give ourselves a challenge.  Tiny habits in spending can make or break a budget, especially in tight economies or should one fall on hard times. I know of a guy who is pursuing a masters in social work degree, but is known to spend $80 on bar tabs every Friday night. It's no wonder so many of our generation struggle with savings and finances.  As for us, we've decided to implement a $25 per week grocery budget.  In the past we've had times where our grocery bill comfortably ranged around $30 per week, but the last month or two our spending has been more than double that.  We haven't been eating like kings and aren't a ton happier, in fact, I can't even point out why our grocery bills have been so much higher.  So it's time to go back to a hard budget and get mindful about our grocery shopping.

Although originally it was supposed to be a cash-only, envelope method challenge we haven't really stuck to that part of it.  We have been, so far, successful at sticking to the $25 limit.  Actually, last week were just under $20 - we had a lot of left over odds and ends to clear out of the fridge.  We do a Friday to Friday week and this week is looking good too; we've spent $10 so far this week.

The budget covers just groceries, not eating out, alcohol or paper goods for just the two of us and the real challenge will be maintaining it long term instead of eating our pantry empty and having an expensive restocking week.  Our meals have been pretty typical for us, healthy, mostly vegetarian with lots of produce and I think we're just getting back into the groove of eating everything we buy.  We've also been grilling a lot lately which has been nice.

Once we have our usual grocery budget back as habit we'll probably move on to look at eating out (though we haven't been doing a lot of this) or alcohol (spending more than usual here) expenses.  We'll see how it goes.

What do you spend on groceries each week or month?

Update:  I wrote about the tactics we've been using to meet our $25 budget for more how-to information.

I just stumbled onto a funny and fascinating article about get rich quick schemes from the New York Times.  They list all sorts of ways people have tried to illegally make a quick buck.  They're pretty interesting, like one woman who embezzled $100,000 from her PTA in three years and used the money on fertility treatments.  My schools' PTAs never had enough money that six figures could go missing.  You'd also think that if she didn't have enough money to cover the fertility treatments that she might not have enough cash to pay for all the extra costs associated with a child.

In addition to the usual drug rings there was also a journalist who became a pimp on the side after his pay was cut.  Of course the only reason we know about these people is because they were caught.  Who knows what other illegal side gigs people have come with who haven't been caught.  But I can't help feeling like I'm not creative enough to come up with these ideas to begin with even if I knew I wasn't going to get caught.  What reporter wakes up one morning and says to his wife "honey, I think I'm going to make up for that pay cut by finding some prostitutes and becoming a pimp"? Peddling drugs on campus or around town has never occurred to me as a source of income to pay for my MBA.  Maybe fear of the justice system is too ingrained in me for me to exercise this kind of out of the box thinking.  Regardless, I think I'll stick to legal means of meeting my financial goals.

Have you ever resorted to illegal means to make money?  If so, don't tell me...

So I've been wrestling with how to track my progress here and still remain anonymous.  I need to look at how much my program costs versus how much I have and track the remainder (I hope) or the resulting debt.  If I put up my school's exact student budget it will tell you which school I go to which is a little too close to home for my comfort. So I think I will take an average of the "top 5" MBA programs' costs and use that instead.  So my student budget for the blog will be:

	Top 5 Average
Tuition and Fees	$53,946
Health Insurance	$3,153
Room and Board	$21,088
Books and Supplies	$4,163
Total	$82,349

It's not precise, but it's a reasonable benchmark.  When I get my aid package I think I'll scale any grant money I get based on how the average budget compares to my actual student budget so the remainder ends up the same.  The cost after aid is what is really important here after all.  Does that sound reasonable?

I'm trying to get my MBA without incurring any debt. I got in to the program of my choice, set a goal, and have some savings.  Unfortunately there is a seemingly enormous distance between what I have saved and what this degree is going to cost.  So I have a few strategies up my sleeve to help narrow the gap.

Apply for financial aid
This one's a no-brainer.  I've applied for financial aid and am hoping for some very generous results (fingers crossed!).  I also tried to tilt the answer in my favor as much as I could.  I had the opportunity to pre-pay our rent for the next six months and did so.  This lowered the cash balances that I reported and will reduce my living expenses over the next several months.  The application asked for tax returns and mine indicated I was due for a big refund this year so I made sure to note that I'd already received it and it was included in my checking account balance.

Live on a tight budget
I've heard stories about MBA students treating their two years as an idyllic vacation time, jetting off to foreign countries for weekend trips.  Suffice to say this has not been and will not be me.  While I don't have an explicit budget (yet) I do have mental ballparks for spending categories, track every penny I spend, and am ruthless about cutting back where needed.  My school's room and board budget is about 50% more than what I currently spend.

Earn some money
I will be working through to the beginning of the MBA program if possible and plan to work as much of next summer as possible.  Travel again comes up here a lot as a worthwhile option but if my significant other can't come it isn't nearly as much fun.  So I'm working as much as possible during the summers.  I'm also getting some feelers out on maybe doing flexible part-time work during the school year.  I'm not sure yet if I'll be going forward with this though, it will depend on what opportunities are available.

Those are my three big tactics right now - earn more, spend less, and hope the school foots a good chunk of the bill.  I'll be digging into each of these more over the coming months.  We'll see if I come up with additional strategies as I go.

What would you be doing in my shoes?

Smart Money has an interesting article up about buying more happiness.  The article highlights eight swaps or free ways to use your money better to improve you happiness most of which are profiled in a research study from academic researchers. I feel like this sort of information is applicable to everyone, who doesn't want to be happier? But I'm especially interested since I'm looking at a tightened budget over the next few years but want to maintain (or improve!) my current level of happiness. Here's a synopsis and my comments:

1. Experiences not stuff - "Subjects overwhelmingly reported that they derived more happiness from things they did than things they own."  SM specifically recommends a vacation over a new car.  This one has been all over the news and blogs recently, fueled by this type of research and especially focuses on travel. I'm no travel fiend but I do appreciate the happy memories of a day at the beach or learning something new with my SO. 
2. Help others - Altruism and volunteering are classic feel-good activities that are no surprise here but are still often overlooked.
3. Focus on small purchases -I completely agree with this approach.  Two small 15 cent chocolates from the store down the street can make me very happy but a new outfit at $150 does not make me a thousand times happier.  Similarly a new car would not make me 100,000 times happier.  I definitely try to think as small as possible when trying to buy some happiness for myself and almost always I don't feel deprived, I feel really excited about my treat.
4. Go easy on insurance - This fails to really look at the potential happiness downside.  While people may adapt just as easily to negative things as positive ones as the article claims, I am skeptical when it comes to losing your home, health or other major financial catastrophe.  However, getting rid of the laptop warranty as in their example seems pretty reasonable especially if you can self insure.
5.  Save and pay cash - Another tactic that I employ and agree with.  Anticipation is really at least half the fun and paying cash means happiness now won't reduce happiness later. Similarly, reliving what made you happy is another free way to get more out of your purchase.  SO and I often take these walks down memory lane, "Do you remember that time we...." and it never fails to bring a smile to my face.
6. Think it through - Basically this approach was to think through the down sides before assuming a purchase would make you happy.  This only seems like the normal, prudent thing to do before any purchase, but is especially important for a highly anticipated one.
7. Don't shop too carefully - Allowing what should have been a happy moment to become a stressful one can often be a result of trying to hard to optimize the experience or purchase. I wrestle with this sometimes and striking a balance, while sometimes difficult, is crucial to happiness.
8. Repeat - SM wisely points out that we all have a track record of what makes us happy and that we can use that data to be happier in the future. Knowing yourself is a big advantage and one I'm working on.

How do you buy happiness?

The "latte factor", as coined by David Bach, has been a constant refrain in personal finance new and blogs.  Opining on how Americans are in the red in part because of their love of fancy, over-priced coffee, there are many calculations of how people could save way more without it.  It's even been pervasive and treated as a hard and fast rule enough that there's even been a blow back movement against it like at I Will Teach You to be Rich.  But, controversy aside, I'd never seen numbers around the coffee shop's side of the story.

Bach and others' rhetoric implies that your Starbucks coffee is wildly over priced and you're better off without it.  But an article at the Washington Post counters the first claim.  Unpretentiously titled "Why a 12-ounce latte costs $3.25", the article outlines the major costs in producing the latte as follows:

Cost to consumer $3.25
Overhead $1.30
Milk .25
Espresso .88
Labor .40
Cup .70
Lid .40
Sleeve .20
Cost to coffee shop $2.96
Profit to coffee shop $.29

After expenses coffee shops are only left with a 9% margin on the latte.  That's well within general retail norms.  Even for Starbucks or other major chains (the numbers above reflect independent stores) the profit only rises to a 13% margin which is hardly exorbitant.  As the article notes, the latte is an expensive drink for shops to make because of the milk and additional labor over regular coffee.  The regular coffee would probably have a higher margin.  Starbucks makes a killing on large sales volume.  The only thing getting killed on your particular latte purchase is your wallet.

I decided to dig a little deeper into the numbers on the "top 5" business schools last night.  I pulled student budgets for each to get a better look at cost, averaged their rankings, and pulled in the debt numbers from the Poets and Quants article. Here's what I came up with:

School	Tuition and Fees	Health Insurance	Room and Board	Books and Supplies	Total	Average Rank	Average Debt
Haas*	$47,637	$2,010	$20,226	$2,500	$72,373	10.75	$73,186
Kellogg	$51,495	$2,466	$19,617	$1,647	$75,225	11.5	$87,256
Tuck	$50,700	$11,340**	$11,550	$3,765	$66,015	10.25	$96,292
Sloan	$52,900	$4,660	$20,496	$1,836	$79,892	8.75	NA***
Booth	$55,872	$2,466	$23,250	$2,100	$83,688	4.75	$79,539
Harvard	$52,386	$1,834	$23,390	$6,390	$84,000	2.75	$73,110
Stanford	$56,022	$3,903	$23,328	$3,828	$87,081	4.25	$71,403
Wharton	$58,244	$2,974	$25,982	$2,000	$89,200	3.75	$109,836

Man, if I believed in rankings at face value, there are two clear winners here: Harvard and Stanford.  Some of the best rankings AND the least debt.  Pretty good combination.

The other interesting thing to look at is that average rank and total cost are inversely correlated.  It could be that the demand for the best business schools is higher so they can charge more or charge more to maintain exclusivity.  Or instead higher ranking business schools have more successful alumni who contribute more to the school's endowment allowing the school to charge less.  Oddly, the correlation is not as tight for tuition and rank, the main exception being Harvard.

Overall the numbers look pretty similar though; I would have expected more variation across categories and in total.  I suppose this is a pretty small and homogeneous group of schools, but they cover a wide range in areas so I would have expected at least a wider range in cost of living.  This table does make the amount of student loan debt at Wharton look even more impressive. 

I don't think this is enough information to quantify the value of a school though.  Certainly average starting salary and percentage of graduates with job offers are two pieces of data that are readily available and would significantly contribute to a measurement of value.  What would be other quantifiable factors in a school's value? Or is the value of the school highly dependent on the student?

Notes:
*Out of state
**Includes miscellaneous expenses.  In other schools this was included under room and board
***No data on debt when graduating from Sloan

Student budgets by school:

Booth - UChicago

Harvard Business School

Wharton - UPenn

Kellogg - Northwestern

Stanford

Sloan - MIT

Tuck - Darthmouth

Haas - UC Berkeley