For a working professional, it requires a lot of effort and time to go back to B-school and hone skills, without straining finances. How can one do the perfect balancing act?
Thanks to the revival of the economy, the job scenario is looking bright again. It’s also an opportunity for the several executives, who closer to go back to B-schools to hone their professional skills during recession, to reap the benefits. Experts, always are of the opinion that it’s always to enhance one’s skill sets irrespective of the business cycle to stay ahead in the competitive business environment. However, for a working professional, it requires a lot of efforts and time to go back to the learning mode without straining the finances. How can one do the perfect balancing act? Let’s look at the possibilities.
Review your position:
If you are planning to take up a full time MBA course, you may have to take a complete break from job. In this case, this may put a strain on your finances. So, before taking any decision, it is advisable to review your financial position. It’s essential you make provisions to support expenses of your dependents as well as yourselves. A young professional who has taken a year’s break to pursue post graduate program in management from a top city institute, had started his financial planning well in advance even before deciding on the institute. Once he was convinced that he saved enough to cover basic expenses, he quit the job. The educational expenses are being met with the educational loan he took.
Another young executive who secured admission in a reputed B-school first invested his savings in the fixed deposits and took educational loan. The interest earned on the FD is enough to take care of his daily expenses.
Weigh your options:
It’s essential to get your mathematics correct, in terms of the expenses you are incurring on MBA program and then pay back post studies. One must be also have a clear vision in mind about what you do after you finish your course. A substantial salary rise or entrepreneurship, choose your option. Ascertain if the cost benefit analysis- expenses incurred vis-à-vis future earnings are in your favor. If you are planning to pursue studies abroad, the need for this analysis becomes all the more critical.
If you plan to enroll for sought after courses like MBA or law, you may not find it difficult to obtain an education loan. However, this may not be the case if you already have an existing home loan to service. Under such circumstances you could look for banks that would agree to take a pro-data or a second charge on the house as an asset. Alternatively you could look at borrowing against gold jewelry or investments. However, remember that the repayment tenure for these short term loans generally does not exceed 12 months.
It’s advisable to buy a substantial health insurance for yourself and your family. Treat this as top priority. Once you quit the job, the group health cover taken by your employer will cease to exist. You need to have an independent cover in place.
A substantial sum that could take care of all your necessities for at least six months should be set aside. It could be in the form of fixed deposits or liquid funds.
Paying up loan:
This requires a balancing act. If you already have a home loan or any other liabilities think several times before taking a break from the job. Unless you are sitting on a huge surplus or have the comfort of other source of income that could go towards the EMIs it is better to defer your plans to study further. If you have always had definite plans to study, you should avoid taking loans.
Ideally, you should plan a couple of years in advance before you decide to take a study break. This will ensure sufficient time to make requisite provisions by cutting back on expenses to save for outflows during the course of your studies. –