Conquer your student debt. Refinance now.
When PC Wong graduated with her MBA from New York University 2013, she made a counterintuitive decision: She left New York.
Despite the opportunities and network that living in the Big Apple offered an NYU graduate, she moved back home to Boston. She had her eye on something else that pursuing her career in New York couldn’t offer her, at least not right away: Home ownership.
“I knew that this particular goal would be more easily attainable [in the Boston area],” she says. PC closed on a condominium in September 2014, even as she was paying down loans for her MBA.
Who: PC Wong
Lives in: Boston, MA
Profession: Program Management, EMC Corporation
Her degree: MBA ‘13, Stern School of Business, New York University
Average annual cost of NYU Stern MBA program: $103,982/year
PC’s story underscores the tradeoffs MBAs graduating with a load of student loan debt face: Stay in expensive tech-centric cities for lucrative career opportunities and delay other milestones, like home ownership — or live elsewhere and use the savings in other ways to invest for the long term.
While cities like San Francisco and New York will always attract freshly minted MBAs and other professionals, an increasing number of people — like PC — are choosing to make compromises in order to pay off student loan debt while pursuing other financial goals.
To be sure, Boston is not exactly a low-cost city. But real estate dollars do go further when it comes to home buying. According to Trulia, the average sales price per square foot in Boston is $476 compared to $1,428 in New York City.
“For the same budget, I can get a place in Boston that’s in a more desirable location, better condition, better walkability/commuting conveniences compared to New York,” she says.
PC also sees investing in a house as the way to fill in the potential earnings gap of her geographic tradeoff. While the biggest tech hubs offer upside in the form of company earnings and equity, she says the smaller cities can offer upside in the form of real estate.
“I am looking at real estate to help supplement my income over the long term.”
“There are limitations on what you will make in corporate path versus an entrepreneurial path,” she says, “and I am looking at real estate to help supplement my income over the long term.”
And it turns out she has hardly had to sacrifice career opportunity. Through diligent networking in business school, she landed her position as a Principal Program Manager at EMC, a data storage company, and doubled her pre-MBA salary.
How She Does It
To make it work, she finds a way to balance saving and spending — refinancing her student loans with Earnest, subbing Netflix for cable, driving a Hyundai instead of a luxury car — while also splurging on travel. (She’s been to 40 countries and counting.)
Then there are more advanced budgeting techniques. She realized she could come out ahead if she leased her new home to tenants, and then rented something smaller for herself.
PC’s Money Tips:
1. Make a loan payment every two weeks rather than monthly, that can save you almost a full payment per year.
2. Pretend you’re still making your pre-MBA salary after your graduate so that you can put as much as you can toward your loans.
3. Balance being frugal (ditch the cable TV for Netflix only) with spending on the things that are meaningful (traveling.)
PC attributes some of her careful budgeting and financial planning to her family. “I had the kind of immigrant upbringing where we had very little so I learned to save and be frugal,” she says. Her family moved to the Boston area from Hong Kong when she was one.
Even before business school PC carefully weighed the pros and cons of taking two years off from work and the lost wages — while taking on new student loan debt. She spent a full year working on her applications to make sure she could land a spot in one of the most competitive programs in the country.
“There were certain schools where I knew the sacrifice would be worth it,” she says. “I spoke to a lot of current students and alumni and saw the clear benefit.” All of this has helped her manage her student loan debt while building a financial foundation.
Setting New Goals
PC still has a few years left of student loans, but that has not stopped her from setting new goals: Volunteering more in her community, expanding her horizons in her career, and exploring the next potential real estate investment. And if all the financial planning she has done in her 30s goes the way she hopes, maybe even retiring on the early side.
“I am looking forward to seeing where I can go,” she says. “My next move could be international, but I don’t know when or where.”