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This is a guest post from No Debt MBA, who is trying to pay for an MBA from a top-five business school without student loans. This is a post that asks questions but offers no answers.

My significant other and I had an interesting discussion the other night. We were trying to make plans for a week of vacation this summer and were deciding between two different options:

A cross-country trip with plane tickets where we'd spend some nights staying with friends and spend days touristing and eating out.



Driving to a nearby state or national park and camp or backpacking for a week.

I'm headed to business school in the fall, and my first tuition bill is due in a few weeks. Can you guess which option I advocated?

What can I afford?

The discussion brought up an interesting question of what kind of luxuries I can afford right now. Neither vacation plan was particularly extravagant by most measures, but the first would cost over $1000 per person and the second would be under $500 per person (even if we bought new gear).

I have enough money in my savings account right now to pay either bill; however, I see that money as being earmarked for business school. I don't have enough to pay for both years of my MBA, even when I make some reasonable projections of future income (such as next summer's internship). Do I really want to add a $1000 vacation on top of this?

My significant other pointed out that I probably have more than enough to cover the rest of my goal and have fun if I use my Roth IRA, which I had considered as a vehicle for saving for my MBA, but also as retirement savings. I countered that raiding my retirement savings or taking out student loans for a vacation was financially irresponsible and against my values. Plus we could have a fun, but less whizz-bang vacation around here for a lot less.

Note: Before you think my significant other is crazy or a spendthrift, let me note that this trip had been under discussion for a long time. We had planned to stay with people we know to avoid most of the hotel costs, and the trip would have been paid for in cash. I've basically gotten financial cold feet.

Seeking balance

We decided to stay local for our vacation, but I don't think either of us felt particularly good about the discussion. The question of what I can afford will continue to be a problem since I'll still have cash sitting in the bank to pay for next year's MBA expenses and my basic living expenses. But my significant other will be continuing to work and has a right to be interested in maintaining a lifestyle that reflects that.

So the question is: What can I afford? How can I tell? Can I afford to eat out tonight? Go to a concert? Buy new clothes? Up our $25/week grocery budget?

It's very important to me to meet my goal of graduating debt-free. So far, my significant other has been supportive. But there's definitely a balance to be struck here. That balance will keep my goal sustainable and help me avoid burnout. It will also keep my significant other from going crazy and resenting my extreme frugality and goal of staying debt free.

I've incorporated basic living expenses into my budget estimate. I know I'll need to buy food, pay rent and utilities, and have a way to get around. But the question is how much else can I afford. Additional expenses just make my goal harder to reach. At the same time, I don't want to make my significant other miserable for the next two years.

J.D. has his balanced money formula, but how does something like that work (or any budget at all, for that matter) when you have no income coming in and a limited amount of savings?