How I'm Paying Off My Law School Debt Year 3

 New year, new law school debt goals! For a quick update, I graduated law school with $145,000 of student loans, and worked really hard to get my loans down to $130,000 in a year. And that brings us here, to year 3 and how much I currently owe...

I can't tell you how happy and proud seeing that number dwindle! It's still a lot of debt, but slowly but surely I'm eating into that. This year I was super jealous of everyone who still had federal students loans and didn't have any interest payments. It sucks that when I refinanced my loans I considered all of the benefits of a federal loan that I would be giving up, but never did a global pandemic come to mind. Unfortunately, my refinanced loans are all private loans and the company I currently have my loan with opted not to stop interest payments on their loans. 

Luckily, our firm wasn't really hit by COVID and I was fully able to keep my job and not have to take a pay cut. Because I knew I was pretty financially stable and interest rates just kept dropping, I looked in to refinancing my loans again to try to shave about 1% off of my current rate. I went through Credible again and found a new loan that was calculated to save me about $10,000 over the course of my loan and selected this new loan. I went through the whole loan process, even taking a small hit to my credit score when they did a hard credit pull, and right at the end I noticed all of the disclosures. One of the disclosures included all of the loan fees associated with my new loan-- which would be over $12,000! Refinancing this loan would have actually cost me $2,000 which is why you always read the T's & C's my friends. So, I'm currently still with the same loan provider that I switched to last year, and I'm going to try again to find another lower interest rate. 

But even with my current interest rate, I want to stress that my loans ARE manageable. I get a lot of worried comments from prospective and current law students worried that their massive student loan debts will completely take over their lives. I truly don't think student loans are to be too feared. This year, Ryan and I were able to buy a house and I'm still able to keep paying my loans (but also, thank you COVID stimulus!) 

My #1 tip for paying down your law school debt is DO NOT pay just the minimum, if you can help it.  Paying just the minimum allows your interest to grow and grow your debt, which is how you hear stories of people graduating with $X in debt, paying the minimums consistently for years, and having $1.5X in debt after all that time. With each pay check, try to pay 75% of you minimum, so you end up paying a little each month (so , if you owe $1,000 a month make 2 $750 payments each month, paying an extra $500 without really feeling it). This will help you tackle your interest better and more of each payment will go to lowering your principal, which will lower your interest for next month. I love playing around with this calculator to play around with different amounts of extra payments and how they help me reach my goal faster (it only works on a laptop/desktop and won't show you all of the charts on mobile).

When it was right around the time we were getting our house, I slowed down the extra payments a little so that we could have a little extra for our closing and moving costs. I still paid more than just the minimum, so I didn't feel too guilty. This is another good example of why I believe that when you refinance, you shouldn't choose the highest minimum available. Because if you choose a mid-level minimum, you can always pay extra, but if an unexpected cost shows up in your life, you can easily go down to the minimum without defaulting on your loans.

I will be honest here and admit that I was planning on chilling at a little over the minimum for a while as we got our house in order and had a lot of expenses (so many Home Depot trips!). I was a little wary because I didn't want to get used to spending this kind of money frequently and never getting back the discipline to pay extra on my student loans. Originally I had planned to cut down on loan payments just for 6 months and then get back on track, but thankfully, I received a raise soon after our offer was accepted so I was able to continue paying extra on my loans while still saving for new windows and being able to buy a new hose for our yard worry free.

That's probably the best thing about being a baby lawyer is that there's still room to grow in your income. Ryan and I were very proud about getting a house that was only 3x our combined income (the suggestion is 4x) because we both knew that we were just starting off in our careers and eventually our house would become even more affordable for us as we grew in our jobs and received raises. Now my debt is super high with student loans + a mortgage, but tackling these two debts is a priority to Ryan and I so that is where we are focusing our money.

I currently spend over 1 full paycheck each month just on these 2 loans alone. We got a great rate on our mortgage, so I'm not really concerned about payments on that loan. What's nice about my student loan is thinking about how I'll get such a big "raise" once it is paid off because I'll get so much of my paychecks back and will have more money to spend on other things. I originally was calculated to pay off my loan in 10 years graduation date, but with the way things are going it's looking like I'll actually have them paid off in around 5 years from my graduation date. 

Ryan and I are getting married this spring, so I'm also saving some money to help pay for little wedding expenses and our honeymoon. And I'm sure in a year or so we'll be ready to start a family. But again, with strategic planning I'm able to save for a honeymoon or expect a baby, and not be terrified about money because of my student debt. Instead, I paid off as much as I could before I had a mortgage, and as much as I could before I needed to pay for wedding stuff, and am paying off as much as I can before we start a family. Then, if later on I need to slow down payments, my principal is already lower and I'm already ahead on my payment plan.

I feel in control of my student debt because I'm still using the budget I learned from IWT. Each paycheck, I put a little money in my 401(k), a little in a Roth IRA, a little towards my mortgage, a little towards my student loans, a little in savings, and a little on bills. Then, any leftover money I can spend guilt-free knowing that I've taken care of all of my payments for the month. I treat my credit cards like a debit card and pay them off immediately with each paycheck because I'm trying to get out of debt, not into it-- and this method has helped us rack up massive credit card points to help pay for a lot of wedding expenses. And the day before payday, any leftover money in my account goes to a little extra payment on my student loans because every little bit helps. 

And that's a wrap on my 2020 debt progress. I paid a little more off in 2020 than I did in 2019, and I'm hoping that's a trend that continues. As an update on my 2019 goals, I am very happy to announce that I now make more than I currently owe. Which again, I think law school debt is okay when you weigh what it gets you! My other 2019 debt was to get my loans under $100k, which was apparently a little too aggressive for me last year, so I'm going to re-up that as my 2021 goal! Here's to being in control of our debt, rather than our debt being in control of us :) 

Oh and PS- if you like my letter board from Instagram where I keep track of my debt, here's the link. I like to keep it viewable from the front window of our house so hopefully any would-be robber will see it and have pity on me and not break in and steal anything lol! But if that doesn't work, I do recommend getting a Ring security system as the first purchase for your new house.

How I'm Paying Off My Law School Debt Year 2

New year, same debt! This is Part 2 and you can read Part 1 from last year here. 

So I had shitty interest rates on my original law school loans and now I don't! Truly living the American Dream :) Some quick stats, this is what I currently owe...

I know that seems like a lot but I'm actually making a pretty big dent in it. Here's a roadmap of everything I did in the past year that has helped me pay off my law school debt faster.

January 

Refinanced loans #1. I refinanced my public loans (quick recap-- I had both private loans through Sallie Mae and government loans through my FASFA) last year. This dropped my interest rate down by a full 2-2.5% since I refinanced 3 separate public loans and each loan had different rates. My loans had only become due in November so I refinanced them as quickly as possible so that I wouldn't have to restart on the standard 10-year term all over again.

I'm surprised I even got to refinance my loans because I had a "fair" credit score. I basically only got even this slightly better rate because I'm a lawyer. Our profession is actually at the top of the lists of "preferred borrowers" because usually lawyers are paid pretty well. Luckily, my check stubs were enough to show SoFi that I would be able to afford paying the monthly payments. 

Refinancing almost was a no-brainer for me because the risks of refinancing didn't really apply to me. Like I just mentioned, I might not be a Big Law lawyer, but I still made enough that I didn't need an income-based repayment plan. And I didn't go into public law so I was never even eligible for a debt-forgiveness program. And I read theSkimm to know my options when looking at variable vs fixed rates (here's more terms you need to understand).

I set it up to where I paid my private loan (higher interest rate) with my first paycheck of the month and then paid my gov loan (lower interest rate) with my second paycheck of the month. Then I took the difference between my gov loan payment and my private loan payment and paid that on my private loan with my second paycheck as well. Basically, my private loan payment was lower than my gov loan payment but the same amount of each check went to loans. This was just a couple hundred dollars every second paycheck that went to my higher-interest loan because I'm trying to do the debt avalanche approach.

If this is confusing, here's an example (not the real numbers).... Say my private loan is $800 a month and my gov loan is $600 a month. $800 is spent out of every check on loans. So, first check of the month, all $800 would go to private loans. And second check of the month, $600 goes to gov loan and $200 goes to private loan. Meaning $1,000 paid each month total on private loan while gov loan gets paid at a slower rate of $600 a month. Make more sense?

February

Credit card #1. I didn't have a credit card before this point because my mom was always concerned that if I had a credit card before I had a full-time job that I would end up in credit card debt. Now that I understand how credit cards work, I wish I would've gotten one earlier. Maybe I was a little too immature to be responsible with a credit card in college, but I think I would've been able to handle it in law school.

The reason why I'm really focused on the credit card right now is because I'm trying to build up my credit as fast as possible. The biggest way you're going to get ahead with your debt is to be hyper-focused on increasing you credit score because a higher credit score equals lower interest rates. Even though I didn't have that great of a credit score, I thankfully got approved for one! I found mine after an hour of comparing and researching on NerdWallet (and yes, obviously a glass or two of some wine). I decided to get a credit card that gave me cash back rewards and am letting that cash back stock up just in case there comes a time where paying my credit card bill is high. Like an emergency fund in a way.

My credit score actually jumped up 30 points just by opening a credit card because I finally had a line of credit. Before then, all I had was just debt so this helped me out a lot. The rest of my credit score rising has mostly just been making consistent payments on my loans. See how it's all related? Higher credit score leads to better loan rates which leads to paying off your loans consistently and faster which leads to higher credit scores....

May

Raise #1. I say #1 because you bet your ass I'm going to ask for another raise soon. But anyways, yeah I recently found out that it's pretty standard practice for you to get a 6-month raise. Remember that if you're worried about accepting a job offer at a place where the pay is a little low. 

If you're just starting out and don't feel like you don't have a leg to stand on to negotiate a higher starting salary, come back in 6 months. Then, you'll have a track record to show your boss of how you're adding value and bringing in cash money and therefore deserve a little bit more of what you bring in. 

The tip to getting a raise is don't act like you got a raise! Sure I splurged for some nice bubbly to celebrate, but after that it was back to normal. I calculated out how much I would be getting each paycheck after taxes & everything. Then I put reoccurring calendar events in my phone to remind me the day after my paycheck hit to put that much money towards my highest-interest loan. This is just a little extra each month to help get my loans paid off that much faster.

August

Refinance #2. I know most financial articles you read say not to do this, but here's why I considered it. My credit score was so meh to begin with (borderline "poor") that I was able to raise it 60 points in 6 months and go to "good" and then now I'm at the bottom of "very good." 

Once I crossed over into that "very good" category, I decided that now would be a good time to look into this again. That's just because once you get so high it gets harder and harder to increase your score so I knew that this was about as good as it was going to get for a while. I figured if I'm going to hover around this score for the next year, I might as well look into refinancing and start paying less now.

I'm super glad I did! This time I found out about Credible which compares all the different options you're pre-approved for. I looked into the rates and was able to find one that was 3% lower than my original refinance rate (so 5% lower than my original law school public loan) and 1% lower on my public rate. 

I decided just to combine the two because while my public loan was still lower than my private one, it was still kinda high. This did stress me out initially because now instead of having two smaller payments a month, I only have one big payment. When I looked at my refinancing options, I made sure to choose one that was a couple hundred bucks less a month than I could actually pay. This is just because while I am already paying that higher amount and paying more per month would've been a sightly better interest rate, a faster payoff date, and overall savings in interest, it was just too big of a risk. 

I just made sure that my new refinanced loan didn't have a prepayment penalty. So now the plan is to still pay that extra few hundred every month anyways just to get it paid off faster and save overall in interest, but I'm not locked in to that number. If something comes up and I literally can't afford that in my budget, I can cut down to the minimum payment and still be fine. Now what this all means is that in less than a year, I got one of my loans down 5% and the other 1% and have saved about 3 years off my original repayment window. 

September

Credit Card #2. This is getting a little excessive and I don't think you need a second credit card but I want to give y'all the full picture of how I've made money moves this past year. One reason why I decided to get a second credit card was to anchor my credit age. A big part of your credit score is your credit age (remember, I'm obsessed with my credit score now) and one big downside to refinancing your loans is that it starts your credit age all over again for those loans.

To illustrate, before I first refinanced my loans were all 1-3 years old because I was taking out new loans throughout law school. When I first refinanced, I only refinanced my private loans & left my gov loans alone. That erased 3 years worth of private loan age so I had a 0-month old new refinanced loan and a 3-year old leftover gov loan, plus a 0-month old credit card. So the average age of my credit was like 1 year (which isn't that good).

Then when I refinanced again, I refinanced allllll of my loans so that gave me a 0-month old new refinanced loan but now with a 7-month old credit card, plus a 0-month old new credit card. So now my average age of credit has gone down to less than a year (which is bad). But whenever I decide to refinance for a third time, whether that's in a year or three or whenever, I'll have had these two cards anchoring my credit age so it won't be hit as bad. 

I don't recommend getting a second credit card just for anchoring and definitely don't recommend getting a new card every time you refinance your loans, but I was needing a second card and this seemed to be good timing for me. My goal is to use it to eventually help raise my credit score.

October

So this tip isn't loan-payoff related but it is money related so I felt the need to include it here. I opened a high-interest savings account to start an emergency savings. I made a goal to contribute $100 a month (so $50 a paycheck) with a goal of having a $1,000 emergency fund saved up just in case. 

This is SO SO SO important! Imagine your car breaking down or your dentist bill ending up being higher than you thought because of some treatment you need or your pet needing surgery and you're out $1,000. Can you still pay for your rent and your student loans? You don't want a late or missed payment on your credit score, you don't want late fees for your monthly expenses, and you don't want to go into credit card debt and end up paying a lot of interest on a credit card bill.

Once I reach that goal, my goal is to get 3 months' income saved up. This will give me a security blanket in case I ever decide to leave my job or (heaven forbid) I'm let go. Things will be a little easier knowing that I would have 3 months to take my time finding a job that's right for me without getting behind instead of taking a shitty job just because I'm about to default on my loans and be evicted from my place.

Later on, this little side money can be dipped in to if I ever have an emergency that costs over $1,000. Another good option is when I go to buy a house, I can either contribute it to my down payment or at the very least show the mortgage lender that I have a healthy safety net saved up.

But first, baby steps. Set up an emergency savings account and slowly build that up. Then leave it the fuck alone. You're not going to get rich off the interest gained, but at least you are prepared for life like a #adult and you'll get a lil extra money in the end.

November

Again, not loan related, but I'm throwing it in here... November was my one-year anniversary at my job. This made me eligible to contribute to my firm's 401k, and I decided to do so. 

I went back and forth a lot on this hypothetical question-- If I had an extra $100 at the end of the month would it be cost me more in student-loan interest if I invested it or would it cost me more in lost interest if I paid towards my loan. What pushed me over was the book I Will Teach You to be Rich. I randomly decided to buy the audiobook to listen to before an out-of-town hearing and it really helped out (another book I really liked was The Millionaire Next Door). Basically what I got form his book was the average return on investment for a 401k is 8%, so since my loans were now below 8% I figured I would lose more money not investing than paying off my loans quicker. 

At the very least, I highly highly highly encourage you to at least contribute what your employer is matching. Let's say you earn $100k a year before taxes. And let's say your employer matches at 3%. That means if you sign up for 3% with your 401k, you pay $3k a year into your 401k and your work pays $3k a year into your 401k. Yeah that's right, you'll double your money!! Same scenario, but you only contribute 1% ($1k a year), so your work will only contribute 1% a year. That means you just lost out on 2% or $2k a free money because they matched what you put in, but they were willing to go higher. On the other hand, if you were to contribute 6% or $6k, they would still only contribute 3%/$3k because that's their max. But hey, still free money. Go talk to your office manager or HR or a more senior attorney and find out what your work does. 

December

The final step for #adulting in 2019 was I got a Roth IRA and put a little money into it and will also contribute monthly to that. A Roth and a 401k are very similar. Basically the biggest difference is a 401k is taken pre-tax and a Roth is taken post-tax. 

So again let's say you make $100k a year. If you're contributing 3% to your 401k then you actually make $997k a year because they take that out of your paycheck before anyone taxes you. This means that you'll have to pay taxes on it once you take money out of it in retirement, but hopefully you'll be in a lower tax bracket by then and it will have grown so much that the taxes for 65-year old you are nbd. 

Same scenario, so now you take whatever money is in your own checking account once your work direct deposits your check and then you can put that into a Roth IRA. So you've already paid taxes on it. This means when you take it out when you're retired, you don't have to pay taxes on it so it's like free money for future you. The only catch is there is a limit for a Roth. For 2020, you can only put $6k into a Roth.

Why do I do both? Because I want to be one of those little rich old ladies who spends my retirement on wine tours in Italy and cruises through the Hawaiian islands. And because of compound interest. The more I contribute now, the more crazy amount I'll have when I'm older. 

So this about wraps up my 2019 money moves on my luxury-sports-car amount of law school loans. My goal for 2020 is to be even more aggressive and get it down to 5 figures. Or make more than I owe. We'll see which comes first :) 

Debt Payoff Tips

1. Your income is not your income. Take how much your boss is paying (X) you and subtract how much you need (or want) to pay a month towards your student loans (Y). That is your income. Get into this mindset. Don't think you should be going out to eat all the time and always buying new clothes because you make X a year and can live the fab life. You make Y a year. You can treat yo self occasionally but only after you know your loans are taken care of.
2. Set up an automatic transfer from your checking to your savings account on the day after each pay check. If you don't have a savings account then stop what you're doing and get one now!!! Right now I just move $100 a check or $200 a month, which ends up being $2,400 a year. I really don't notice that money being gone. A lot of people get so focused on paying off debt that they forget to save up an emergency fund. Then if something bad happens just once, you're screwed and next thing you know you are being evicted from your place and defaulting on your loans and it's really hard to bounce back from that. Be money smart with more than just your debt.
3. Celebrate the baby steps. Every $5,000 I pay off my total debt, I get a $20 bottle of champagne (which is a splurge for me) and celebrate! It's really motivating to appreciate how much you've accomplished even if in the grand scheme of your debt it doesn't feel like much. The little $5k payoffs add up to eventually being debt free, so enjoy the ride.
4. Find your money-wasting triggers. I unfollowed a bunch of people on Instagram because I realized that I was always feeling like I needed more clothes and started coveting designer bags, too. The truth is, I have plenty of clothes and really only need one purse. Once I stopped trying to live their #sponsored life, I suddenly had a lot more room in my budget.
5. Don't focus on the Big Debt. It's really daunting to look at how much you owe and knowing you'll be spending like a decade paying it off, so I just don't focus on that. I stop myself any time I start to think about all the things I could be spending money on each month instead of paying interest off. That doesn't help so why go there? Focus on doing the best you can with what you got, and it doesn't seem so bad. 
6. Find one thing that you actually can live without, and do it! For me, as much as I loooove Orange Theory, it did hurt to pay $169 every month! So, I decided to cancel my membership and instead run outside for the low cost of Free.99 and instead put an extra $169 into my loan repayment. And although I still get manicures so I can look professional, I decided to save $60 a month and just do at-home pedicures. I found this nail polish that's really long-lasting and again deposit the savings into my loan. This will save me SO much money in interest by helping me pay off my loans a little faster. Finding an extra $100-$200 in your budget isn't that hard if you monitor where your money goes with an app like Mint or TrueBill.
7. Stay motivated. You know what's lame but addicting for me? Watching YouTube videos and reading blog posts about people paying off their student debts. It keeps this in the front of my mind and reminds me why I want to get my loans taken care of ASAP. It also helps me re-evaluate my current lifestyle and check where I might be self-sabotaging my debt-repayment plan. I've heard of people making paper chains where each chain represents $1k and cutting off the chain link by link as they make their payments. Whatever works for you, find a way to stay focused on your goals.
8. Extra money = goal money. If you get a Christmas bonus or a tax refund, just put it straight into paying off your loans without even thinking about it. This is money that you didn't have yesterday and probably didn't plan to have anyways, so your budget can stay the exact same but your debt can be just a lil lower. Do it ASAP before you get attached to the extra money and it burns a whole in your pocket. Remember your goals and stay focused! 

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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Preparing for Spring Semester of Law School

Ugh it feels like Christmas break just started but that hasn't stopped that nagging feeling that I'm getting, reminding me to get my life together in the next week before school starts. For those of you who are 1L's, congratulations you made it past the hardest semester of law school and believe it or not your classes will get easier! (a fair warning though, that does not necessarily mean that you will be less busy) Even in undergrad I've always loved Spring semester because it's a fresh start in your school year but isn't completely new like Fall semesters. So, my friends, here's what I'm doing to get started on the new year! PS - Happy 2017!

Get finances in order

New year, new loans amirite? It sucks I know. Although I don't have to fill out another FASFA for this semester, I went ahead and double checked with my school to see when my tuition is due and if I'll need to request my refund or if it's automatically deposited in to my account. And since my government loan wasn't enough to cover my school and living expenses, It have to re-apply for another personal loan for this semester, too. If I had extra money left over from last semester, I definitely would think about taking out a smaller loan next time so because the less I initially take out (the principal) the less I'll have to pay later (the principal + interest). 

Next on the list: budgeting! I make sure I have enough money to pay for the next 5 months of rent (or maybe even 7 months in case I end up with an unpaid internship). I also look in to see how much my books will cost and go ahead and order those ASAP so that they get in before my first day of class.

With any extra money left over in my budget, I look and see what supplies I need to replenish. I typically need some more highlighters and other basic school supplies. I am still going to use my planner, but if you're needing a new planner for the new semester you should check out this post and also this one :)

Make a game plan

Now that I've been through a semester, I like to look back and think on what I slacked on the most so that I can make goals to fix those problem areas. One semester I struggled to actually read all of the cases, so I set a goal to make more time to read them. My first semester I procrastinated on my outlines, so then I made an effort to try to work on them a little each week. My goal is always to just try to improve on myself a little.

These goals are nice but I consider about what I'll need to do to achieve them. One thing that really helps me with that is creating a study schedule and planning out to study a little every day but also planning out some R&R time. Another thing I've tried is changing my study methods if what I did last semester didn't quite work out for me. 

Most importantly, I make appointments with my professor's office hours so that I can sit down with them and go over my finals. It's important for me to see what my strengths and weaknesses are! Also I go back through anything else that was graded and absorb any notes that were on my papers. I realize that this sounds like the type of advice that a guidance counselor would give but no one actually take or even what only suck-up students do, but I'm playing the law school game now and this is one of my cheat codes. 

Another big thing that I think really helps is that I review my notes from the previous semesters. Everything in law school builds on other topics so I know I will be screwed in my upcoming classes if I already forgot what I've been learning (plus it's a good little start for the Bar). All I do is start with my Fall 1L outlines and just read through them once, and then read through my Spring 1L outlines, and now I'm adding my Fall 2L outlines to that as well. My favorite law school quote is your rate of learning has to exceed your rate of forgetting.

Get organized

Déjà vu. Print out my syllabus. Color code my classes to my planner. Add due dates to my planner. Find where my classes will be (thank God law schools have less classrooms than college campuses!!). Find out when organization meetings are and if/when dues are due. Find out when try outs for any competitions are. Do a little internship hunting. This semester I bought cute file folders and a desk organizer and made a folder for: syllabi; financial aid documents; pro bono time sheets; internship paperwork; documents for tax purposes (FYI that's coming up soon); and textbook rental paperwork. Something I started last semester was adding my classes to my iCal with the classroom in the location so that I can easily remember it, and my section number and professor's names in the notes of the event. I set the events to repeat either M/W or T/R and have the repeat end for finals. I also set a reminder to go off "at time of event" just in case I'm grabbing a drink or something so I'm reminded to get back to class.

I also make sure that I'm getting my daily schedule organized too. This is probably my put-too-much-thought-into-everything coming out again, but I find that getting back into a daily schedule while I'm on break helps me be more productive when I'm back at school. I'll start going to bed earlier so that I can eventually be waking up as early as I do for school. Then I'll go ahead and actually not look homeless before meeting up with my friends or someone for lunch. When I get back in the afternoons, I'll make myself be productive by doing some laundry or helping my mom clean or cook. Because I'm not at school, I allow myself to watch a ton of TV but try to set a time to stop and stick to it. Then I read or do something else that isn't just bumming around. By the time I get back to school, it seems like my body is already on autopilot and used to the motions of being productive throughout the day. Just something to try maybe. 

7 Things To Do to Prepare for Law School

This time last year, I was a mess. I had finally realized that I couldn't just wait around all summer to see if I got pulled from the waitlist and accepted that I would basically have to call the one school that did outright accept me and basically beg them to let me have my spot back. After that, I was in full-on panic mode as I rushed to get everything situated for the fall with only a little over two months until orientation began. If you're like me and tend to put things off until the last moment, here are some things that you'll need to start doing.

Housing

Now is the time that you need to find a place to live. You'll need to consider if you want to live in on-campus housing like a dorm, or if you want to get an apartment, or even if you want to rent a house. You'll also need to think about location, like would save gas living closer to campus or maybe consider nicer apartments further away from your school that aren't cheaply made for students. Do you want roommates? Because if so you'll need to find them. If you think you might end up wanting a pet, you'll also need to be considering that. The neighborhood you live in might also be important because if you're planning on studying at your place, then you might not want to live by a bunch of loud college kids. You'll also probably need to set up mail forwarding from your last house to your new one to make sure that you're still receiving all of your mail.

Related: Apartment hunting tips

Loans

This was absolutely the #1 thing my mom was always on my ass about. Unfortunately, there's not really a lot of scholarships available for law students except what your school can offer, and there's also no law school grants available either.Most likely you're going to have to figure out how to get a loan. The nice thing about a loan is that whoever you get your loan from isn't going to be running out of money anytime soon so I was able to put this off until August and still get my money in time.

Check Law School Website

Your professors might have posted the syllabus for the class already or at least the first few reading assignments. Don't assume that this will be like college and they'll send you nice little emails letting you know what to do because most assume you already know how to check for assignments already. This will also be how you'll know what books you'll need for class and how to buy a parking pass, etc. 

Buy Books

In college I always waited until after the first week of class to buy any books because I wanted to find out which classes I could get by without even having the book. Not the case here. In law school you'll use your books in every class, every day. If you're ordering your books online through Chegg or through Amazon, you'll need to order them early enough to make sure that they arrive before the first day of class (or maybe even orientation, if your school gives assignments for that). 

I'd personally recommend NOT renting your books, because if you highlight for your IRAC, then chances are that you'll end up paying fines for writing in them too much. However, there's nothing wrong with buying used books—just as long as you make sure that whoever had it before didn't practically turn it into a coloring book.

Related: What law books to buy new, buy used, rent, and get for free 

Visit the Campus 

You might've already toured the campus when deciding which school to go to, but you need to go back for another visit. Figure out the fastest way to get from your apartment to class and remember how long it took you so that once school starts you know how early to leave. Even though law schools are tiny compared to a college (mine only has like 10 classrooms), you should still figure out where your classrooms, mailbox, and locker will be.

This is also a great time to stop by financial aid and see if there's any way you can negotiate your scholarship. One girl from my section didn't receive a loan initially but after finding out that the rest of us did with similar GPA/LSAT scores, she marched herself into financial aid and got a little scholarship out of it. Or if you did get a scholarship, you might see if there's any way they could bump it up just a little. 

Related: How to find law school scholarships

Talk with Current/New Students

Whether it's someone you ran into while on campus or someone you've met through your school's admitted students' Facebook group, it's great to start meeting people from your school. Even though incoming 1Ls likely don't have any advice to give like the upperclassmen, they still can answer questions like Where do we meet for orientation? or Who knows our professors emails? The more people who can answer your questions, the more at ease you'll be on the first day of class. 

Book Flights

If you're going to law school far enough away from your family that you'll be flying home, now is a time to consider getting flights for holidays such as Thanksgiving, Christmas, or any major family events like your parents' birthdays or a wedding. I've heard that the best time to book domestic flights is 6 weeks before because of pricing, but I completely forgot to do this last fall and ended up having to pay a lot more for a last minute ticket home for Thanksgiving because I was so busy with finals just around the corner. Another reason you might consider booking flights in advance is that if you have proof that you've already had something booked for a while, you're more likely to get an extension for a deadline or days off work if you need it.

Final Thoughts

These are a lot of little details, so make sure you don't get overwhelmed trying to figure everything out all at once! Think of what needs to happen ASAP and what can wait until later on in the summer, and work on getting everything in order a little at a time. Of course, if there's ever anything else that you're unsure of as you get ready this summer, ask away and I'll try my hardest to help you!

Related: 5 ways to spend the summer before law school

Click here to download your law school back to school checklist

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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