How I'm Paying Off My Law School Debt

Happy 2019 everyone!! I wanted this post to be my first post of the year because my New Years resolution is to get on top of my financial situation and take on my debt head on. 

If we're being honest, my debt really annoys me sometimes. I look at how much I owe and think about the cute little house I could buy with it instead, or the crazy nice car I could get myself, or the trip of a lifetime flying first class around the world and staying in some nice ass hotels with the money that I've spent on a law degree. I look at my friends who graduated without debt and see all the fun things they get to do because they can afford to go to brunch every weekend and fly home to surprise their parents or buy that thing that they really want, because every though I make more than them, they have more money to blow each month. So, that's hard. BUT, I do think that it was worth it to go to law school and although my debt is a huge thing in my life, I'm still very glad I went to law school.

So let's talk about my debt. How much it actually cost me to go to law school, how I helped my debt while I'm in law school, and my plan to not die still owing money!

My law school debt

First off, how much I owe...

I keep track of my debt using this app

Yep. It's a pretty big number. But I am grateful that my parents were able to support me through college so my debt is only law school and doesn't also include college debt too. Also shoutout to my dad for helping cover my MPRE fee and my Barbri fee. My loans are made up of the maximum amount that I could get from FASFA (government loan) and whatever FASFA didn't cover was paid for by Sallie May (private loan). My government loan definitely gave me much better interest rates than my private loan, but sadly my 1L year my FASFA wasn't even enough to cover my tuition.

Related: How to get a student loan for law school

A big part of why that number is so high is because my 1L year I went to a private school which cost almost double than the school that I went to my 2L/3L year. This is kind of a bummer because it means that my biggest loan has been accruing interest the longest, but it is what it is. 

Another reason why that number is so high is because I used student loans to pay for everything— tuition, books, housing, groceries, gas, everything that I had to spend money on for 3 years came from loans.

Related: A breakdown of my 0L, 1L, and 2L expenses

How I minimized my law school debt

The easiest way to minimize your law school debt is to look for scholarships!! Try to get as many scholarships as you can before law school, and then after every semester 1) go in to the financial aid office and try to negotiate a better scholarship [assuming you have decent grades, if you need help with your grades go here], and 2) see if you qualify for any external scholarships. 

Related: How to find law school scholarships

One thing I started doing after my 1L year was to take out my scholarships after each semester instead of one big loan at the beginning of every year. The idea is that if you take out say $15k in August and another $15k in January, then the spring semester $15k isn't sitting there accruing interest while it's not being used during the fall semester. I haven't done the math to see how much it actually saves, but I do feel like it helps. One downside though is that doing this means more "hard credit checks" on your credit score so it might lower your credit score a little (idk by how much) which might make your new interest rate higher for your private loans. Ask your parents or someone who's good with math help you calculate it and find the best option for you. 

Probably the thing that felt like helped me the most with my debt was working during the summer between my 2L and 3L year and for the whole fall semester of my 3L year. This helped make the money that I was taking out stretch so much further. In fact, I was very excited that I was able to save enough both semesters of my 3L year that I had enough leftover money to pay for 2 months' rent and groceries during the Bar so I actually didn't have to take out a Bar prep loan!

Related: How to decide if working during law school is right for you and How to have a job during law school

The last thing that I did to help my debt while I was still in school was that I signed up for automatic payments on my loans each month. It wasn't much-- I think I paid like $200 a month of my private loans and like $75 a month of my government loan. I realize it sounds absolutely counter-intuitive to use loan money to pay off your loans but hear me out. First off, I was able to choose a better interest rate from the start by agreeing to opt-in to pay I think it was $25 a month on each private loan (I chose to pay extra each month). Secondly, this helped keep my interest rate down by juuuust a teensy bit. Yeah it's not much but hey if it helps, I was all for it. Third, it boosted my credit score to be consistently paying on my debt so with each new loan that I took out (remember I took out 5 private loans [1 1L, 2 2L, and 2 3L]) I qualified for a better interest rate. I ended up having an interest rate on my last loan be about 1 full percentage lower than on my first loan! 

Related: How to budget for law school

My law school debt repayment plan

So here's my focus for 2019! The first thing that I've already done in 2019, even though we're only like 2 weeks in, is refinance my loans through SoFi. What this means is that basically I have them pay off all of my private loans and then now I owe SoFi for my loans but instead of having 5 loans to pay off that all have different interest rates, I have 1 loan to pay off at 1 interest rate. And because as I just mentioned my credit score went up from when I was a 0L to now, I qualified for a new interest rate that's 2% lower than my highest old interest rate and 1% lower than my lowest old interest rate (I realize this gets confusing because of math but bear with me). This will end up saving me thousands over the course of my repayment plan. If you want to learn more about refinancing with SoFi, use this link and you can get $100 if you sign up.

The second thing that I'm doing this year is that I'm paying every other week on my loans. I received a 0.25% lower interest by signing up for automatic payment on my loan, but I'll actually be paying extra each month. The idea is that if you pay every other week you end up paying a little extra each year because some months have 5 weeks in them, but to you it doesn't feel like you're paying extra. I just set up a reminder in my phone for every other Saturday to pay a little extra on my loan.

And as for my repayment plan, what I've decided to do is the Dave Ramsey approach to debt where I'm going to make the minimum payments on my government loan each month and use any extra money that I have to pay off my private loan first (called the debt avalanche). Using this method, I'll completely put all of my attention on my private loan first because it has a higher interest rate, and then after that's completely paid off I'll turn my focus to my government loan with the lower interest rate. The idea behind this is that if you focus your attention to the higher interest loan first, you'll end up saving money on interest in the long run. 

Let's talk numbers. What does this look like for me. I'm in the 20-year repayment plan for my private loan, which costs me somewhere around $650 a month. I'm in the 15-year repayment plan for my government loan, which costs me somewhere around $750 a month. Ideally, which my debt avalanche approach to debt I wish the year payoff plans were swapped but I'm working with what I was given. Anyways, my plan is to spend about $1000 from each paycheck on my debt— $1k from my first paycheck of the month to my private loan, and then $750 from my second paycheck to my government loan and $300 from my second paycheck to my private loan. To do this, Ryan and I are really focused on our budget  (we each use this app to budget) and we actually live a pretty frugal lifestyle most of the time.

Related: How meal planning saves us money

Lastly, my plan is for any raise I get in the future to go directly to my debt. I've read from so many people to just act like you never got a raise (I mean you're already making your salary work for your budget). The problem is that if you use your raise to treat yo self, then it's really hard for you to scale back to being #poor after you've gotten used to the good life (it's called the golden handcuffs problem). Another thing that I'm planning to do is use any tax refunds that I get to go to my loans, for the same reason. When I first started my job and was filing out the paperwork, I actually elected to have less money taken out of my paycheck each month/less or no tax refund just so that I could have more money each paycheck to work on spending at least $2k a month on my loans.

Okay congratulations you've made it to the end! Sorry it's such a long post but also I haven't posted in a while so I guess this makes up for it lol. I'm very much brand new to this whole student debt situation, so we'll see what I end up changing, what works out really well for me, and what else I find out about. Right now, my plan is to do a law school debt update at the beginning of every year because I know these posts can be boring/scary so I think once a year will help y'all see how it's going without being too much. Okay so I guess we'll see where this goes in 2019!!

let's be friends!

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Margherita Pizza

I've mentioned before how I've almost completely abandoned fast food and instead cook at home, so today I'm sharing what I made last night. 

Please note: this is a cheap and easy way to make pizza. You can spend more time, effort, and money making it fresher and more authentic. This recipe is for lazy college kids. Enjoy!

Time: 12 minutes (prep/cooking)
Servings: 3-4 (depending on how hungry you are)
Suggested music enjoyment: Drake's Views is now on Spotify!

Ingredients

Pre-made pizza crust ($3) 

Mozzarella slices ($2)

Basil ($2)

Tomato ($1)

Sauce ($2) 

Olive oil ($4)

Total Cost: $14 for enough ingredients to make two large pizzas, and still have leftovers to make spaghetti or whatever you can come up with. (FYI this recipe is only for 1 pizza)

Step One

Pre-heat your oven to 450°

While this is heating up, place the crust on a cookie sheet (or a pizza stone if you're *fancy*)  and drizzle with a little of the olive oil. I also add a little olive oil on the bottom just because I'm afraid it will stick, but I have no evidence that it will even stick if you don't do this so you can skip this at your own risk.

Then, add a thin layer of your sauce and spread it around evenly. Because you put actual tomatoes on here, if you get a little sauce happy, this will end up very tomato-y!

Once you're to 450, cook just the crust and sauce for about 5 minutes.

Step Two

While this is cooking, start cutting up your cheese, tomato, and basil. I'm lazy so I just take 3 slices of cheese and cut them into 1/4s. You can choose to slice your tomato, but I prefer to dice them because because I feel like that's too big of bites for me. You can either cut up the basil, or just tear it if you're feeling a little lazy. For this pizza, I used about 3 leaves because that was all that I had left.

Step Three

After the five minutes is up, pull out the crust and add the cheese. Cook this for about 3 minutes.

Next, add your tomato and basil. Cook this for only about a minute, just to warm them up. 

After that, all that's left is to let it cool for just a smidgen and then slice it up. Moscato goes great with this, but then again, moscato goes great with everything :)

Reheating Instructions

This makes a large pizza, but I'm only one girl. When I'm cutting the pizza, I go ahead and cut it up into all of the slices at once so I don't have to dirty up my little slicer later on. Then I separate the pizza into portions and store them separately because it makes me feel like one of those my-life-is-totally-put-together, look-how-fit-I-am meal prepping girls.

I save my slices with the crust sides up because that's the way I reheat it. To get the crusts to be crispy when you reheat it, avoid the microwave because it'll just make them soggy. Instead, pull out the trusty George Foreman grill that everyone seems to get as a graduation present. I reheat mine like this (panini style) for about 5 minutes. You have to kinda separate out the ingredients off of each other once it's done, but then it seriously tastes like you just pulled it out of the oven fresh. 

How to Make a Budget for Law School

A Preface on Loans

In the past year, I have dug myself exactly $47,476 in debt. Law school is fun! That comes from two loans, one FASFA and one from Sallie Mae. My FASFA (thankfully) only has a rate of like 1% but the Sallie one is a little steeper at 7% interest.  Even though I've already been paying back my Sallie one a little bit each month, it's already accumulated close to to $400 in interest since August. And according to their website, I should be paying on this loan until 2028 so like, kill me. The nice thing about my Mint account though is that I can sync it with these loans and it will calculate how much I need to pay each month to pay it off faster (like when I have a big girl job). 

Read about my government loan here and read about my private loan here.

As for next year, I read about how it's better to take out your loans semesterly instead of yearly, because there's a lower principal so you're accrued interest will be lower, so I'm considering maybe doing that if I can figure that out. I borrowed the full amount that my school suggested I would need because I didn't want to run out of money, but it turns out that I didn't need quite that much. The good news is that this is more than enough to cover my costs during the summer. I'm planning on doing the math and seeing if it'd be more beneficially to next semester take out a smaller loan and pay less on it now, or to continue taking out the max and paying a good chunk every month. It's a lot for me to figure out!

One thing I did was I had my money deposited in my savings account instead of my checking account. I did this because 1. my savings account has a higher interest rate than my checking so I earn a little money each month and 2. because I know that if I check my account and see $4,000 in there, I will blow that all in a matter of weeks. Now, each month I move over $2,000 and don't let myself transfer any more unless it's necessary. If you do this though, I'd check with your bank to see if they have a limit or fees for transferring money between accounts. Mine does, but it's less than the interest my money earns in a savings account so for me it's worth the little fine. 

Making a Budget

Before I came here I always had a part time job and a little help from my parents so I never had to budget, I just watched to make sure I never overdrafted. But now I've had to get smart about my money real fast. After I'd been in class for about a month, I looked up my bank statement and calculated where all of my money was going to. This was a big eye opener for me because spending $7 and $9 there seems like nothing at the time, but it really adds up over a month. That's how I somehow ended up spending $200 (!!!) just on fast food alone. 

I used what I had spent in each category and created a budget. Then after November, I went back through and looked to see where my money had gone again. I went over what budgets I'd exceeded to see if they were because I hadn't budgeted enough initially (I thought I could go a whole month spending only $100 on food) and what I had just gone over because I wasn't paying attention ($60 just on getting my nails done). By comparing my two month's spending, I could see my spending trends enough to come up with a solid budget that I stick to now. 

 

Sticking to the Budget

Like I said above, I typically spend $1,000 a month on rent and utilities and another $1,000 on everything else from groceries to makeup and even paying on my loans. Moving my money over a little at a time has really helped me because if I have $5 in my account then I make it last until the next time that it's time for me to transfer money. I know I have to do this because although there's a lot of money in my account, it technically isn't mine and I keep having to remind myself of that. I also went to my Mint account to set up budgets and also set up reminders. So now I'll get the occasional text telling me how much I've spent that month on a certain category and how much I usually spend, so I'm aware of when my spending is getting a little out of hand

A few things that've helped is that I've almost completely stopped eating out. I'm talking maybe 2-3 times a month. The good news is that I've lost some weight once I cut out all those Whataburger trips. I've also given up little luxuries, like now I only get my nails done for special occasions. Another thing I did was at the beginning of the semester I went to Costco and bought necessities in bulk—paper towels, laundry detergent, trash bags, shampoo... What I like about this is that now I don't have to spend money each month buying these. And recently I've started going to the grocery store in more frequent, but smaller trips because I realized that if I go once a month I get in stock up mode and just start throwing things in my cart that I don't actually need.

For my loans, right now I pay an even $100 a month on my 1% interest loan. As for my 7% interest loan, I'm enrolled on a $25 a month autopay and I also had started paying $100 a month on that. A few weeks ago I decided to call them and see if there was any way that I could be making these payments go towards my initial principal instead of paying the interest. I was informed that that's not an option, but that I accrue about $160 each month interest, so anything I pay over that will go towards my principal. I read another article about paying back loans that said instead of making one big payment each month, split that into two and pay it every other week. Supposedly because some months have 5 weeks and such, you end up paying more without feeling like you're paying more. So now I pay $75 every other week on top of my autopay $25. And if I have any money left over in my account on the last day of the month, that goes directly towards paying my loans.

Update

Lol, I was just at my desk and looked up and realized that I forgot to mention something. In undergrad, I used this dry erase calendar to keep up with due dates for quizzes and assignments. In law school, I really haven't had any due dates, and especially not since my LRW class ended. A few months ago I realized that I had to come up with some reason to keep this calendar updated, so I started writing out what bills are due when. Admittedly, it is a little disheartening to look at a calendar and basically only see bills; but, it is handy to always know when money is going to magically disappear from my account and why, so I keep it around. Just another way to keep my spending in check and keep me on top of my financial responsibilities. 

Or if you want to make paying your bills a little less painful, you might try a fun bills calendar like what my sorority sister did!

Also, I just found out about this app called Ibotta. Basically what I do is make a grocery list of what I need, and then go through this app to see what deals they have on what I've already decided I need (so I don't end up buying things just because it's on the app). Usually what happens is that it'll give you like a .50 rebate for using a sponsored brand over one you might have initially chosen. But it's not always brand specific and yesterday I got to use it on just the apples, bananas, and bread that I got. 

After you get home from grocery shopping, you open the app and find the store you were just at, then you find any items that they have that you just bought. Then it's as easy as taking a picture of the barcode on your food and confirming it by taking a picture of your receipt, and they'll give you money back. Right now I'm at about $11 that I've got back just from using this app. And if you use this code when you sign up, you'll get an automatic $10 extra on your first rebate!!

There's also another app with the exact same concept called Checkout 51. So if you're willing to do the process twice, you can save extra money because they have different offers so what wasn't on one might be on the other, or you could just get cash back twice. Use this code to get an extra $5 on your first rebate (so that's $15 you just made by reading this post!!)

Related: My Favorite Law School Apps

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