How To Save $100,000 For An MBA Or Other Higher Education

by Mike Holman

A reader asked me how he can save $100,000 in order to do his MBA. My first thought was “with great difficulty”.  $100 grand is a lot of cash to save even if you make a high salary.

Obviously, to save money you must spend less than you earn and save the difference. Cutting your spending and increasing your income are the two options you have.

I’m not going to get into money saving tips – there are a million…no, perhaps even a billion blogs out there dedicated to that sort of thing already. I will say however, that saving money is 99% motivation. If you are keen to save money for a desired goal and have the financial capacity to do so, then you will do it.

If you need someone to explain obvious money saving strategies like cooking and eating at home is cheaper than eating out, then trust me – that MBA won’t do you a bit of  good. Just keep eating out and enjoy your life.

Increasing your income by working extra hours or from a part-time job is another possibility, but it might not be practical for everyone.

Save or borrow for an MBA?

I think the reader should consider borrowing money to do the MBA.

Most people complete an MBA in order to increase their earning potential. They might spout some other nonsense about their intentions, but they are lying. It’s all about the money!

Assuming an MBA increases your future earnings, waiting to save up for an MBA means that there will be fewer post-MBA higher-earning years.  If you borrow money and complete an MBA now, you can start earning the big MBA salary earlier and there will be more years with the extra income.

For example if the reader is 30 years old and takes 10 years to save up $100,000 to get the MBA, he will be 40 before he starts making big MBA money. Assuming he retires at 65, that gives him 25 years of post-MBA higher salary earnings.

But what if he borrows the money at age 30 and goes the MBA now? If he starts the post-MBA salary bump at age 31, that gives him 34 years where he is earning a higher MBA salary.

That extra nine years of increased earnings adds up – even if the post-MBA salary bump isn’t that large.

If your salary increases after the MBA, that will make the $100,000 loan easier to pay back.

And yes, this argument can also be applied to any post-secondary education which is why it can make a lot of sense for students to borrow in order to complete a degree or other training if it increases their future earning potential.

What if my post-MBA salary doesn’t increase?

If you spend a $100,000 on an MBA and end up going back to your old job – needless, to say you probably wasted your money. Not everyone benefits from an MBA.

It’s important to be able to pay back your MBA student loan, even if your salary doesn’t increase. To do this, you have to look at your current pre-MBA income and determine if that is possible. If not, you might want to consider saving up part of the MBA cost first and then borrow the remainder in order to reduce your risk.


$100,000 is a lot of money to save and it would take most people a long time.

If you want to invest in post-secondary education (ie MBA) to increase your future earnings, consider borrowing the money you need unless you can come up with the cash in a reasonable amount of time.

Make sure that whatever education you choose has a reasonable chance at a payoff. Even MBAs don’t pay off for everyone.

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