MBA students need to develop the knowledge and skills to manage their financial resources effectively so that they will have a lifetime of financial wellbeing. Most MBA programs do not help their students develop financial literacy. Accordingly, developing the knowledge and skills to become financially literate is an individual MBA student’s responsibility.
As a newly accepted MBA student or a currently enrolled MBA student, are you prepared to address the financial wellbeing issues resulting from your participation in an MBA program?
April is financial literacy month in the United States. However, generally, financial literacy is not a discernible part of the modern-day MBA curriculum. Designers of MBA curriculum either assume: 1) that MBA students will extract the bits and pieces from the curriculum—as they progress through their program—to make them financially literate and better managers of their personal-financial resources or 2) that financial literacy development is not appropriate for an MBA program. Thus, most MBA programs focus on helping managers and leaders become more effective at managing an organization’s resources and very little, if at all, on helping them to become more effective managers of their own resources. In my opinion, the skill sets and knowledge that make up financial literacy are as critical to an MBA graduate’s career success and wellbeing as are the concepts included in the MBA curriculum.
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Previously, I outlined four action steps to help MBA students manage the financial impact of starting and paying for an MBA program. I followed up with a discussion of the first step, assessing your financial wellbeing. The second step, evaluating your current financial situation, is the subject of this post.
Why Evaluate Your Current Financial Situation?
Since MBA programs typically want you to pay your MBA program’s tuition and fees in advance it is a good idea to identify as soon as possible the source of the funds you will use to make these payments. Waiting until the last minute or focusing on only one source can result in a negative long-term impact on your financial wellbeing. Evaluating your current financial situation, however simple or complex it may be, helps you minimize the negative impact.
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You are starting your MBA program, so why should you assess or measure your financial wellbeing? Furthermore, why should you monitor your financial wellbeing during your MBA program?
I am sure there are many reasons why you should assess your financial wellbeing prior to starting your MBA program. However, I think the most important reason is so you can identify what impact the financial implications of starting an MBA program will have on your life and the lives of others. In addition, measuring and monitoring the impact allows you to manage proactively and mitigate the impact as well as demonstrate the effectiveness of your actions. Finally, I think it is a good habit to establish.
Read more to learn: how to assess financial wellbeing; who should assess their financial wellbeing; how to use assessment results; how often to assess and more.
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For most MBA students, earning an MBA Degree has both short-term and long-term financial implications. My experience is that many MBA students make short-term financial decisions that often have long-term financial consequences, consequences about which they know little about or are choosing to ignore. Whether out of ignorance or neglect, the result is the same, financial wellbeing suffers. Fortunately, there are post acceptance/pre enrollment financial planning action steps that most MBAs can use to proactively manage their short-term and long-term financial wellbeing. These action steps are appropriate for all MBA students; full-time, part-time, EMBA, or online, and will result in a unique plan for each individual. My goal with this post is to introduce you to these action steps and set the stage for future posts where I outline in detail each action step you can use proactively to manage your own financial wellbeing while earning your MBA.
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