Whether you’ve been considering earning your MBA for a while now, or you’ve been recently motivated to further your education through online schooling while spending more time at home during the coronavirus quarantine, pursuing an advanced degree is on many people’s respective bucket lists. Before you dive in, it’s important to understand the pros and cons of enrolling in an advanced degree program.
There are, of course, several benefits to obtaining your advanced degree. According to our last U.S. Census, approximately 13.1% of Americans have a master’s or professional degree, or a doctorate. The number of people over the age of 25 who have a master’s has nearly doubled to 21 million since 2000, which is an impressive number. As various industries and fields become increasingly flooded with applicants who hold advanced degrees, more and more jobs are starting to require education above and beyond a B.A.
Projected starting salaries between a B.A. recipient and a graduate with an M.B.A. differ dramatically. Applicants with a B.A. in Business Administration, for example, can expect to earn an average starting salary of $57,133 as opposed to an M.B.A. graduate who can expect to earn an average of $84,580. Even if you’re content in your current role, having an advanced degree or certification can result in an increase in salary and workplace responsibilities.
Of course, the benefits of an advanced degree extend beyond the financial. For many individuals, obtaining an advanced degree brings a sense of personal satisfaction and accomplishment. Others simply enjoy education and want to continue to grow their knowledgeability and skillset. The personal impact an advanced degree can have on your life is significant, and shouldn’t be discounted when making the decision to move forward (or not).
As financially and personally beneficial as an advanced degree can be, it’s certainly not without its tradeoffs. The average cost of a graduate program is approximately $30,000 per year at a public university and $40,000 per year at a private university. Most programs last a minimum of two years. You can seek out less expensive online options, as well as scholarships and grants that could reduce that cost - but it’s still significant.
Other tradeoffs should also be taken into consideration. The time spent to achieve your advanced degree can detract from other interests and pursuits, as well as time spent with family and friends. You may also find that the stress of working full time, living a normal life with your family, and attending grad school can be overwhelming.
Finally, you might find that your employer isn’t as receptive to increasing your salary or putting you up for a promotion as a direct result of earning your M.B.A. If this is the case, you may feel that the time spent to obtain your advanced degree wasn’t necessarily worthwhile - especially if you enjoy your current job and employer.
To know whether or not an advanced degree is right for you, you have to take several things into consideration:
If you strictly look at earning your advanced degree from a financial and career perspective, consider how advanced degrees are viewed in your industry. For example, software engineers or business managers may see more benefits than small business owners or some creative fields. It’s also wise to weigh the expected cost of grad school with future dividends. View grad school as an investment, and work to project how soon you’ll be able to pay for your schooling and start earning more to “make back” your investment.
Even if you find that, financially, grad school makes sense, you still need to put the cost of an advanced degree into your overall financial plan. For example, if you’re only five years from retirement, earning a master’s likely won’t have the long-term impact you need to justify the cost and time spent. Alternatively, if you have other significant financial goals (like paying down your mortgage, buying a second home, etc.) that would be derailed by the cost of grad school, you need to consider what’s most important to you and what will bring you the most fulfillment over time.
If you’re considering furthering your education to advance your career, it’s worth checking in with a financial advisor to determine how grad school fits within your financial goals. Get in touch with us today by clicking here. We’re happy to help you evaluate your goals, and determine whether or not grad school makes sense.
Wood Smith Advisors, a woman-owned Registered Investment Advisor (RIA), is a fee-only financial services firm that partners with its clients to simplify their financial lives. We focus on women, entrepreneurs, and individuals with complex financial situations, providing objective and competent advice, education and services to help them develop and build their businesses and reach their financial goals. We can be reached by clicking here.
"Finance Made Simple" blog posts are intended for educational purposes and not for specific advice. Each person’s situation is different. Consult your financial advisor for advice relating to topics discussed.