The average law student graduates with up to $122,000 in debt. It’s 2017. Time to get your financial house in order. If I can save, invest, and pay off my law school student loans in two years so can you! Here are my top 4 personal finance tips for law students.
- Track Your Finances
- Knowledge Is Power
- Considering Refinancing Your Student Loans
- Monitor Your Credit
Track Your Finances
Who would you rather be: (1) the law student who graduates with massive debt and no clue how to pay it off or save for the future; or (2) the law student who tracks her spending, minimizes debt, and plans for her financial future?
Whether you have no dollars, 10 dollars, or 10 million, you need to track your finances. I use Personal Capital to stay on top of my monthly spending, loans, retirement accounts, and net worth. You should too!
Personal Capital is a free service that helps simply your life. As a busy law student or associate you won’t have the time or patience to login to multiple accounts and half-ass track your finances in Excel. Personal Capital gives you the freedom to track all of your accounts in one place, at one time.
Law school is the perfect time to take a holistic look at your financial future. Sign up with Personal Capital for free today!
Knowledge Is Power
Soon you will be inundated with emails and calls at the office from “financial advisors” who, I’m sure, have only your best interests at heart. It’s never too early (or late) to get on solid financial footing. Educate yourself and take control of your finances with these simple books.
The Total Money Makeover
Love him or hate him, Dave Ramsey offers solid advice on getting your financial house in order. Create a budget, get out of debt, stay out of debt, save, and invest. Dave’s book shows you how.
The Bogleheads’ Guide To Investing
If you’re like me, you don’t have the time, energy, or resources needed to try and beat the market. The Bogleheads set-it-and-forget-it philosophy on investing is a godsend:
- Develop a workable plan
- Invest early and often
- Never bear too much or too little risk
- Never try to time the market
- Use index funds when possible
- Keep costs low
- Minimize taxes
- Keep it simple
- Stay the course
Consider Refinancing Your Student Loans
I graduated from a T14 law school with some fairly hefty student loan debt. I hated carrying the burden of such a large debt, so I set out on an aggressive path to pay off my student loans within two years.
Here are the current federal rates:
- Direct Unsubsidized Graduate: 5.31%
- Direct PLUS Graduate: 6.31%
Here are Sofi’s current rates:
- Variable (with AutoPay): 2.345%
- Fixed (with AutoPay): 3.375%
Although Sofi’s rates are much better than Uncle Sam’s rates, refinancing does not make sense for everyone.
When you refinance your law school loans you give up federal benefits like income-based repayment plans and loan forgiveness. Such benefits were not particularly important to me since I work in the private sector, but if you fancy a career in public service those benefits could be huge!
As always, do your due diligence.
Monitor Your Credit
As a law student and young professional you need to stay on top of your credit. Don’t fall for the “free credit score” scams. Here are two legit resources I use to track my credit score.
Annual Credit Report
Per the Fair Credit Reporting Act, each year you are entitled to a free copy of your credit report from each of the big three credit reporting agencies: TransUnion, Equifax, and Experian. Sign up at annualcreditreport.com to get your free annual credit report.
Credit Karma is a completely free credit-monitoring service. You can use Credit Karma to check your TransUnion and Equifax scores on a monthly basis. It’s easy to sign up. And, most importantly, no credit card required!
P.S. When you refinance your student loans with Sofi, not only will you get a great rate, you’ll also get a free $100 welcome bonus just for signing up. Click here to learn more!