Maintaining a Budget During Grad School
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Law school is an investment in your future, but it is one which can cost you money for years to come. The National Center for Education Statistics notes that 74 percent of law students graduate in debt, and the average student loan balance for law school graduates was $145,500 as of 2016.
According to educationdata.org, 100 percent of law school graduates from Florida A&M University graduate in debt, with their average amount borrowed $61,500. Other law schools in which more than half of the graduates were in debt at graduation include Southwestern Law School, Rutgers, Duke, Georgetown, Cornell, Columbia, Yale, Yeshiva, and Boston College.
Some law school students are more likely to be in debt than others. Student loan debts for black law school graduates are 97 percent higher than those of white law school graduates. Hispanic/Latino graduates owe 49 percent more, on average, than white law school graduates.
More than 60 percent of law school graduates have a job offer before they even graduate, which is good when it comes to working to earn money to pay off those debts. With the average starting salary for law school graduates between $70,000 and $75,000 annually, however, it can be difficult to begin to make a dent in those debts as soon as you start working.
While you are in law school, maintaining a budget is key to your mental, emotional, and even physical health. Creating and sticking to a budget during grad school can help to relieve some of the stress that you will inevitably be feeling during this time.
Creating a Budget
Although each person’s budget during law school will differ depending upon their resources, there are certain steps that everyone can take to create a grad school budget. These tips can help you to live comfortably while still focusing on your financial situation, both currently and in the future.
Calculating Income vs Expenses
The first step in creating a budget is to calculate your income versus your expenses. Are you spending more, or less, than you earn each month?
Add up all of the income you receive each month. This should include any stipends or paychecks you receive, any cash you make (either over or under the table) from side jobs, and money your parents give you on a monthly basis.
Determine which expenses are essential, and fixed (the same each month). This should include things like:
- Rent/housing payment
- Car payment
- Car insurance
- Student loan payments
Then calculate how much you spend monthly, on average, for essential expenses that are not fixed, such as:
- Haircuts and personal care
- Pet care
After figuring out your income and your essential expenses, look at what’s left over This is the amount you have left for non-essential expenses, such as entertainment. Non-essential expenses will include things like:
- Money to go to restaurants and bars
- Money for theatre, movies, concerts
- Shopping for things other than groceries
- Subscription services you may have (Netflix, Spotify etc.)
If you are finding that you have less money than you thought, cutting some non-essential expenses is the first way to trim your budget.
Some people might categorize savings as non-essential expenses, but saving money is vital to your financial future. Most graduate students can’t afford to set aside 20 percent of their income for savings. Save something – five percent, ten percent, whatever you can afford comfortably. Savings can include things like an emergency fund (also known as a rainy-day fund, something that could cover three to six months’ worth of your expenses, or an unexpected car repair or medical bill). You can also save for big purchases you really want, such as a new laptop. You should even start thinking about saving for retirement. Putting aside money for your future is an investment in that future, and, ultimately, in yourself.
Budgeting for School
School should, of course, come under the heading of essential expenses. Tuition, books, testing fees – they all add up. Hopefully, you will have student loans, grants or scholarships to assist with some of these expenses. Here are some typical law school student average expenses directly related to school:
- Tuition, Private Law School: $51,268 (per year)
- Tuition, Public, in-state Law School: $29,075
- Tuition, Public, out-of-state Law School: $42,143
- School fees: $500 to $1000/year
- Books/supplies: $2000/year
- Loan fees (fees deducted by lender): $1500/year
- Testing fees – LSAT: $200
- Credential Assembly Service: $195
- Fee per law school you apply to: $45
- Testing fees – bar exam (avg): $500
These expenses are not fixed, of course. Keep in mind, too, that tuition rises each year, so you can’t count on paying this year’s rates next year. Your tuition and fees will also vary depending upon whether you are attending law school full- or part-time, what type of degree you are studying for (i.e., LLM vs. JD) and if you have any scholarships. It is important to figure your school expenses into your budget, even if you only have average figures for them.
How to Maintain Your Budget
When money is tight as a law school student, it can seem almost impossible to maintain a budget. You can do it, using some of the following tips:
- Be Flexible: Flexibility is your friend when you are trying to maintain a budget as a grad student. When grocery shopping, choose the store brand over the name brand items. If you can safely walk somewhere rather than take a bus or Uber, do so — you will also get exercise, which can help to fight stress!
- Spend Less on Non-Essential Expenses: What non-essential expenses can you do without? Do you really need two TV streaming services? Can you use a free audio streaming service instead of Spotify? Every cent that you can save helps, as you can put it towards essential expenses.
- Make Extra Income: Try to find ways to make some extra income. This could include tutoring other students, selling things on eBay, and offering services through freelancing (editing, design, translation – whatever you can do).
- Check Your Budget Regularly: On a monthly basis, check in with your budget to see how you’re doing. Adjust expenditures as necessary and see where you can make changes, as well as where you’ve made progress.
Budgeting Tools for Grad Students
Luckily, there are a variety of budgeting tools available online – both free and for a small fee – to help you budget effectively. They include (but are not limited to)
- Intuit Mint– This online budgeting tool is completely free and even has a mobile app for on-the-go budgeting.
- Zeta – Zeta is ideal for budgeting as a team, if you are sharing a budget with your significant other. It’s also free and includes a mobile app.
- Quicken.com – This budget calculator has been around for years and is one of the most trusted, free budgeting tools available online.
- YNAB – Short for You Need a Budget, YNAB is flexible and allows you to either link accounts or manually enter transactions. It does cost $12/month or $84/year.
- PocketGuard – This is a great option for college students as it is easy to see, at a glance, how much money you have available for spending. It has a free option and a paid option, which adds tracking features.
- Goodbudget – This budgeting app has free and paid options. The drawback is that everything must be entered by you manually, with no automatic syncing like other apps and software.