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5 Tips for Improving Your Financial Standing in Law School

What makes the finances of law students more complicated than those of most other young working professionals? Law students devote significant time to learning both inside and outside the classroom, often resulting in less hours to devote to a traditional 9-5 job and a less consistent stream of income. According to Credible, 70% of law school students also pay for their degree with the help of student loans.

Navigating the financial aid process alone can be daunting, but the idea of loan repayment can also feel like a monumental undertaking. However, student loan repayment and achieving an overall good financial standing can be made easier by strategically managing your finances while in school.

 

1. Track income and expenses with a budget

From Mint to Buddi to GnuCash there are plenty of free tools available to help you create a budget and track your spending. When building your budget take into consideration your income, fixed expenses, and variable expenses. Looking at your financial inflows and outflows will help you determine how much disposable income you have left over for spending and savings. Starting a savings regimen isn’t always an easy adjustment, so it’s okay to start small.

2. Be aware of due dates to avoid penalties

What do late credit card payments and overdraft expenses have in common? Poor planning and less money for you. We’ve all been the culprit of forgetting to pay a bill on time. Avoid unnecessary late fees and the negative impact on your credit by taking steps to make sure that your payments arrive on time. Setting up automatic payments (or putting reminders in your phone calendar) are both easy solutions to ensure that you stick to your payment schedule. 

3. Protect yourself from scammers

Cybercriminals are well versed in utilizing email messages and phone calls to get their hands on classified information. Examine embedded email messages carefully. Be aware that legitimate institutions (such as your law school!) send email from a domain associated with their website. Contact your workplace or school’s IT department to report questionable looking email activity. And as a rule of thumb, you should steer clear of providing your Social Security number or any other sensitive personal data to unknown entities.

4. Keep your credit healthy

Credit cards can be a useful means of paying for expenses. However, look for credit cards with low interest rates and no annual fees. Reconsider making less necessary purchases that can’t easily be paid off in a few months’ time. Monitor your credit utilization rate, which is how much you currently owe divided by your credit limit. Keeping your utilization below 35% is ideal, as low balances can boost credit scores. Also be sure to keep an eye on your credit score by checking your credit report frequently for errors. 

5. Protect your property with renter’s insurance

Whether you find yourself in student housing or renting an apartment, you need to protect your belongings. Theft, fire, and vandalism all have the potential to turn your life upside down and cause thousands of dollars in damage. Renter’s insurance is a way to safeguard your laptop, furniture, and other personal belongings. Most insurers offer plans to pay for renter’s insurance in small monthly payments. This type of coverage is a small price to pay for peace of mind. Start by comparing the top 10 renter’s insurers of 2020.

Successful money management is an ongoing process. But by proactively making small changes to improve your financial standing while still in school, you’ll be reap the financial benefits both before and after you walk across the graduation stage.