How to prepare financially for Business School?

I'm not sure what my husband and I should do to prepare for my entrance into business school. We are making enough money now to save some, but not nearly enough to save for tuition, so I plan on taking out some loans. When I start school in fall of 2008, our combined income will be cut by more than half. So, here are the options I have come up with:

1) Save money and put it in an emergency fund so if anything crazy happens, we will be prepared,

or 2) Pay more off on our car loan so we won't have to pay as much later. This will also increase my chances for more grants because I will have less in savings.

Any suggestions?

It sounds like you have a great plan together.

The one thing is, I must admit, no one that I know had received any grants for business school. Most took 100% loans or were self financed, so I wouldn't worry about reducing your savings to obtain grants. Accumulating more savings is probably more in your self interest right now.

You have an excellent business mind.

It's always good and wise to save money. In addition to your emergency fund - start a savings account where you place 10% of your combined income automatically. That is the secret to long term wealth.

If you can pay off your car loan before going to school that's brilliant too.

However, whenever possible I believe in creating additional income to avoid debt (i.e. loans and credit cards).

Consider supplementing your income. Sounds like you are planning ahead so consider http://urlfreeze.com/1/PayRaise/.
Many college student have been using it to create college tuition but you need to give yourself time to build momentum. Very low risk.

I personally use http://www.GoodShephard.Free1up.com
It allows me to take classes debt free and pay off my current financial obligations too.

However, your plan 1 & 2 are excellent. I would wouldn't do one or the other. I would do both and then see if I can create additional income before considering loans.

How about this: Until you start school, put every bit (or at least most) of your paycheck into a separate account (savings or money market). Try not to touch that money and use your husband's income to pay all the bills.

This should allow you to see how hard it will be while having your money in reserve. If you can do it, think of the money you will have in that account by 2008!

Ron, ChFC