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Emerging from the Bubble

Last weekend I went skiing in Steamboat Springs, Colorado, with 450 of my closest friends. While this excursion, known as the EC Class Ski Trip, was more than just another long-weekend adventure, it got me thinking about the myriad ways HBS students spend their free time and, consequently, their money during their MBA tenure.

During our two years in the bubble, we are long on time and short on cash, a stark reversal from (most of) our pre-business school experiences. We have a stash of four-day weekends, a glorious five-week January term and a dozen other opportunities to splurge our time.

Travel is the most visible use of this newfound resource, but we also spend it partying (weekdays and weekends alike) and invest it in hobbies and exercise. But what about that hefty price tag that corresponds with these choices? How do we justify the financial repercussions of these decisions?

I was talking with Stacy Borden, Jessica Shannon and Kerri Bernstein (all OE) on the ski trip about the culture of spending at HBS. A lively discussion arose around the idea that taking advantage of our time-rich, cash-poor status was not only reasonable, but even smart given the temporary nature of the situation. That is, we are comfortable with using loans because we know that eventually we will be in the position to repay the money. Fundamentally, these spurts of free time are fleeting and should be exploited.

But what about the habits we’ve picked up and the new mindset we’ve adopted during this transitory period? Will we really revert back to a state of the world in which we live within our means and turn down opportunities we cannot afford? Or will the spending habits we’ve acquired in the bubble turn into financial handcuffs out in the real world?

Many of us (myself included) are entering lucrative jobs in finance and consulting, arguing that they are provisional steppingstones to a future dream job. We insist these positions will give us a few years of solid training and a paycheck large enough to settle our student debts, but that we will move on eventually. The problem here is that if we maintain the financial attitude we’ve adopted at HBS once we’ve left, a vicious cycle will ensue.

If every opportunity is a “once-in-a-lifetime” event and we neglect to develop the self-control to choose some but turn down others, we will never find financial stability. And each year that our earning power reaches new heights, each time our opportunity cost rises exponentially, the willpower required to walk away increases commensurately.

I’m not saying we should make drastic changes in our spending habits during our last semester of school, nor am I advocating taking the earliest start date possible in order to gain some cash flow. What I would endorse, however, is finding a moment or two before graduation to truly examine your financial position as well as your short- and long-term goals. Write them down. Be specific. Be realistic.

Shortly after you start that job, dig out that list and revise it if necessary. Examine your spending habits and see if you can reconcile them with those goals you’ve just read. If so, excellent, keep up the good work. If not, it’s time to consider what changes you need to make now in order to get started on the right foot. Keep those goals handy and revisit them every quarter. Just like regular weigh-ins make weight-loss easier, regular financial check-ups are a key to financial health.

Ideally, when that 5-year reunion comes around (remember: 2015!) we’ll all show up gorgeous, fit and financially healthy. In the meantime I’m counting on my 450 closest friends to refrain from tagging certain photos on Facebook. You know which ones I mean.

AUTHOR’S BIOGRAPHY
Christina Wallace is an EC from Lansing, Michigan. She recently learned to ski in Steamboat Springs and, despite the many bruises she incurred, is now addicted to the sport. She would like to thank Lee Motayed and the SA for planning the EC ski trip and her awesome condo-mates for a fantastic weekend.

March 1, 2010
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