At first glance, it may seem as though frugality and HBS are incompatible. After all, HBS students pay significant amounts of money for tuition, housing, and lavish travels. Yet frugality goes beyond the definition of penny-pinching. It is a philosophy by which people acquire and use their resources wisely to achieve their long term goals. Hence, the frugal mindset is one that can be shared among students and billionaires alike (e.g. Warren Buffett).
Business school is a great time to learn financial prudence. Beyond its effect of minimizing debt, being frugal is also more efficient, environmental, and ethical for the world as a whole. Below are ten easy ways to be more frugal at HBS.
Rather than take a cab, take advantage of Boston’s efficient and cheap transportation system (MTBA)! Yes, Harvard Square is a far walk and certain neighborhoods are hard to get to, but saving money and reading cases on the train can be fun too! Biking and walking are also great transport options, but if you must take a cab, try to share with others (//apps.facebook.com/taxiapps/).
Don’t be afraid to eat-in! Conserve Crimson Cash by eating breakfast at home, packing a lunch, and bringing snacks/drinks/coffee with you to class. Also, buy and make food in bulk and use your reusable water bottles.
You’re partying like you’re in college, so you might as well pre-game too! Once you’re at the bar, nurse your drink for awhile if you’re self-conscious about not having a drink in your hand.
Cutting out waste is easier than you think! Measure your appetite prior to ordering food, particularly at the Spangler salad/hot bar where you pay by weight. Try to keep your home food inventory low to avoid spoilage. Finally, cut out unnecessary subscriptions or memberships (e.g. magazines, cable) if you aren’t really using them.
Travel and Entertainment
Yes Miami is calling, but you were also in Vegas last weekend. Staying local some weekends has its perks, and Boston has a lot to offer when it comes to historical sites, museums, and performing arts. If you must get out of town, New York is only a $15 bus ride away.
Special Occasion Apparel
Costume party? Ski trip? Ball? Why hassle and buy something you’ll only wear once when your outfit may be a section-mate away. Sharing/borrowing is fun, cost-effective, and a great way to avoid clutter.
Buying the latest and greatest does have a novelty factor, but sometimes it pays to wait for price reductions. Also, before making a new purchase (electronics, durable goods), look to see if you can buy it used first. Finally, try to be less compulsive about spending (especially on the internet). Best practice is to stop, spend the next few hours thinking about whether you really need the purchase, and then go back and buy if you decide you will actually use it.
Be a bargain hunter by refusing to buy things at full price. Look up coupons and prices online before making purchases (Groupon and Restaurant.com are two resources). However, don’t buy something you don’t need just because it’s cheap (see #7).
Perform an in-depth analysis of your spending using tools such as Quicken or Mint.com. Look for areas where you can cut unnecessary spending and fees (ATMs, late fees). Most importantly, avoid credit card debt at all costs!
The pressure to spend money at HBS can be intimidating, but realize that sometimes it’s OK to say no. Don’t spend money if you’re uncomfortable! Some of us may be millionaires in the future, but for now most of us are up to our eyes in debt. Learning the discipline of frugality now will allow you to be more resourceful and wealthy in the future.