Top Five Financial Planning Tips for Law Students Entering the New Year

The beginning of a new year is an excellent time for law students to reassess their financial strategies and set themselves up for success. Effective financial planning can ease the growing burden of student debt and lay a solid foundation for a prosperous future. Here are the top five tips our Accredited Financial Counselors discuss with law students to financially plan for the new year.

1. Create your spring-term budget.

Whether you’re attending full-time or part-time, a well-structured and frequently updated budget is the cornerstone of financial planning.

Take a few minutes to list all sources of your income for the term, including salaries or wages from any work and/or a lump-sum student loan refund. Then, outline your expenses, such as tuition, books, rent, utilities, groceries, entertainment, and others. Make sure to account for both fixed and variable costs. Once you have your total income and expenses laid out for the term, break it down to monthly numbers so you can allocate and stretch your student loan refund to last all term (or all summer if you are planning on taking an unpaid summer position).

2. Apply for scholarships.

Scholarships and grants are invaluable resources that do not need to be repaid. At the beginning of the year, research and apply for as many scholarships as possible. Many external organizations offer scholarships to law students meeting specific criteria. Diligently applying for these opportunities can increase your chances of receiving at least a few, and every dollar received in scholarships is a dollar you don’t need to borrow!

Explore hundreds of scholarships and writing competitions specifically for law students.

3. Catch up with repayment plan news.

Understanding your student loan repayment options is critical for informed borrowing. Federal loans often offer more flexible repayment plans than private loans, including income-driven repayment (IDR) plans that base monthly payments on your income and family size. Familiarize yourself with the current landscape and use student loan calculators to see how your current debt load and projected remaining borrowing translate to monthly payments (and total cost) after graduation. Being aware of your total loan balance and any changes in federal loan policies ensures you can make informed, ongoing decisions.

4. Check in on your emergency and bar savings.

An emergency fund acts as a financial safety net for unexpected expenses, such as medical emergencies or unexpected needs and repairs. Full-time students might aim to save at least $500 to $1,000 in a separate, easily accessible account. Non-traditional students attending part-time may aim for more if household expenses demand it and household income enables it. Saving to cover three-to-six months of cost-of-living expenses is a common target. Contributing regularly to this fund, even in small amounts, can provide peace of mind and prevent you from incurring additional debt in times of crisis.

On top of that, check in on your plan to fund the bar exam experience. If you haven’t already, build your bar exam budget by visiting your state bar examiner’s website to determine fees. And don’t forget to research and consider your bar prep course, transportation costs to and from the exam, and how you’ll cover your expenses while you study for the bar between graduation and exam day.

5. Revisit your post-graduation employment strategy.

The beginning of a new year is also a great time to take a step back and look more closely at your broader legal career goals as they become clearer throughout your time in law school.

Check on the latest trends in legal career salaries and employment rates at the beginning of each year to develop and refine your career transition plan. Think ahead through the term and the summer to identify next steps you can take in your network and with the career services office to secure a job offer when the time comes.

Take this opportunity to reach out to professionals and mentors to schedule informational interviews and/or career guidance meetings. Your post-graduation compensation is the return-on-investment for your legal education. Consider your career roadmap at the beginning of each year to ensure you’re taking steps to optimize this return.

View recent salary and compensation data for private and public sectors.

Financial planning is an ongoing process that requires attention and diligence, but the beginning of a new year can serve as a moment to reflect, inventory, and plan for the future.

Staying on top of your student loan borrowing and repayment options, building and maintaining an emergency fund, preparing for bar exam expenses, and refining your post-graduation employment strategy can help you start a new year with financial clarity so that you can focus on your studies and career aspirations without the constant stress of financial uncertainty.

For personalized financial coaching and to explore your new year financial planning, schedule free calls with Accredited Financial Counselors through AccessConnex by AccessLex^℠.