Wednesday, October 3, 2012

The Student Loan Debate: Should You Pay Off Those Loans Early?

For those of you who have successfully landed and kept a job, let me say congratulations!  It could be any job at all, not necessarily a legal job. You have a job and you can pay your bills. For those of you who have not found a steady job, I still encourage you keep reading, because I think the principles of budgeting and living within your means is important no matter what your situation.
Before you decide whether you want to pay off your loans early, you need to know what is going in and out of your bank account. The first thing you need to do once you have a steady job is to set up a budget. My husband and I use Mint.com and I highly recommend it. You input all of your bank accounts, student loans, credit cards, ect and then you set up budgets for all of your expenses. There is even a mint.com app so you can track your budget on the go. The most important thing is to account for every dollar that you spend and that you don't spend more than you earn. Here is a video on how to set up a budget in Mint.
My husband and I went to a Dave Ramsey seminar and he has some great advice on how to budget. Before going to this seminar, we did not budget; we did not track our spending. We had no idea how much money was going out every month and we definitely did not have an emergency savings. We learned that if do not control your money; your money will control you. So we took control! Following his 7 Baby Steps, we were able to set up an emergency savings account, pay off our car, a credit card, and save for a vacation all within a 16 month period We still ate out and went shopping, but we did it mindfully and within our allotted budget. Now our only debt is our student loans and our mortgage. So we are faced with the question with whether to pay down some of the smaller loans off early or save up for another goal.
As a side note, if you haven't already, make sure your student loans are set up to be automatically taken out of your bank account each month. Most lenders offer a percentage reduction when you sign up or after a few months. This will definitely save you money in the long run. Also if you ever lose your job or have to take extended time off (for injury or maternity leave), you might want to sign up for a temporary 6-month deferment. I recommend trying to still make interest payments, but if you can't just know that you will pay capitalized interest once your loans come off of deferment.
My husband and I are still researching our options at this point. We don't necessarily want to make higher student loan payments at the sacrifice of some of our other goals. We also will not add additional debt and will save up for future high cost purchases. For instance, we will save up to pay for a used car rather than taking out a loan. However, it might make sense to pay off some of the smaller loans, like the Perkins loans that are not consolidated with our other loans. I know Dave Ramsey doesn't like any debt, so he might recommend that we use the snowball method and pay the smallest loan and then continue to pay apply this method until all our student loans are paid off.
Whether you choose to pay your student loans off early is a personal decision. However, as I mentioned before, you will not even have the ability to make this decision if you do not live within your means. I think the best and easiest way to live within your means is to establish a budget and stick to it. Once you take control of your money, you are on your way to a less stressful financial
Here are a couple of other articles on the subject
Listen to an attorney and his wife who paid off $145,000 worth of debt, most of it consistenting of student loans in 3 years.

Tuesday, February 28, 2012

The 90%

You have heard of the 99% Occupy Wall Street Movement.  Similarly, in law school there should be a 90% movement. Ninety percent of you will not be in the top 10% of you class!   It is important to focus on studying and learning, especially during 1L year.   However, you also need to work on your job seeking skills or else you will find yourself in the last year of law school with only a few months to get a job and no ability to know how to do so. 
You also must be active participants in the process, be aware of your resources, and start your search early.  Many students do not access their career services office.  It is a myth that career services offices only help the top 10%. Career services offer valuable skills in how to write a law resume, network, and prepare for an interview.  These services are probably underutilized in most law schools.  They cannot help you if they do not see you and aren’t aware of your needs.   Your career services office can also set you up with alumni who are practice in your area of interest.
The other issue is that no matter how prepared you are, there are more graduates than there are openings.   Additionally with lay-offs and reorganizations, young attorneys are competing with more experienced ones.  With this in mind, as law students, you should be more aware of your options and take time to learn what you need to do to get a job.   I would also recommend that you take advantage of opportunities to get more hands-on experiences in law school.  You can work for a local legal services organization, do an externship during the second or third year of law school, or participate in a clinic if your law school offers that option.   These types of experiences will provide you will valuable practical experience, while not only building your skills, but your confidence as your approach the job market. You will be able to tell potential employers of all the skills that you can add to their organization.
If you are in the 90%, you need to start your own occupy movement.  But instead of occupying wall street, you need occupy career services, occupy the offices of your alumni networks, and occupy local legal services organizations.  Do anything you can to get a leg up on the competition, so that you don’t find yourself occupying your parent’s basement!  

Wednesday, January 18, 2012

Warning from a Lawyer about Going to Law School

One of my law school alumni friends just posted on Facebook that potential and current law students need to be aware of the status of the legal market. She says that the legal market has yet to recover and she doesn't think it will bounce back for at least another 5 years.  The law firm that she works at had two openings and over 2,000 people applied! They received applications from every tier- Ivy-league on down! She also stated that law schools report any work after graduation as employment for their statistics. So you will be considered "employed," even if you are working part-time at Starbucks.

If you are going to go to law school in this economy, I also recommend that you  know what you are getting into, borrow the least that you can, and even save up before hand. I also think that you should be flexible with marketing the utility of your law degree in other areas.  Lawyers can be a great asset in government , private, and non-profit organizations as policy analysts, compliance officers, administrative law judges, contracts specialists, and ethics officers just to name a few.

Lastly, I encourage you to pursue your passion, not your paycheck.  Determine a budget, live within your means, and you can make your paycheck work for you. Then go after the jobs that you want, not just ones that you think you should have.

Tuesday, January 3, 2012

Christmas Break is Almost Over- It is Time to Order Your Books!



It is about time to order your law school textbooks. Save yourself time and money by ordering them online on Amazon. This is where I used to order my books after I realized how much money I saved over buying them at the school bookstore.  Just grab your class syllabus, search for your textbooks online by the book's title, author, or ISBN. You can also order supplements that you might need when preparing your outlines or to help you catch up when you do not have time to read for class. Amazon also has free two-day shipping for students when you sign up for Amazon Student.  Also you can make some money on any books you are not planning on keeping when you sell them via Amazon's textbook buy back program.  Now through February 4th, 2012 when you buy $50 in new textbooks you can get $5 in MP3s.

Monday, January 2, 2012

Happy New Year!

Happy New Year!! What are your goals or resolutions for this new year? For law students, is it to do better this upcoming semester or to maintain your grades?  Or maybe you would like to improve your  writing or networking skills?  If you are a journal, your goal might be to get published (I recommend choosing a good advisor) Lawyers, maybe your goal is to improve your leadership skills, get more involved in the legal community or to better communicate with your clients and colleagues?    Whatever your goals might be, make a plan of action so that you can hold yourself accountable.  This is a new year!  You get another bite of the apple!  Good luck with all your goals this year.