Law School
Personal Finance

Interview With Laws of Finance About Managing Law School Debt

Laws of Finance is a blog is run by a law student “trying to navigate his way through school without declaring bankruptcy.” With a goal like that, I had to interview him.

1. How much student debt have you racked up during undergrad and law school?

Currently, I have around $84,000 in student loans. By the end my final year of law school, I expect to have roughly $102,500. A fair portion of that is in the form of government subsidized loans, which means that there is no interest while I am still in school. For the loan amounts and rates, see my most recent quarterly statement of financial assets (available at:

2. What action or habit do you think saved you the most money while in law school?

Frugality, generally. I am not one of those students who goes out drinking and running up $200 bar tabs every night. I buy used books when available and I look around for the best deals online before buying any books from a brick and mortar store. I also look for ways to get the most money for my own used books at the end of each semester. Those little things add up over time.

3. If you have student loan debt, when would you like to pay it off? How do you plan on reaching your goal?

I have a timetable arranged for repaying my loans. The high interest loans (6.8%) will be paid off first out of law school. I have already created a budget with my expected salary and repaying approximately $1,000 per month fits fairly well into that budget. I will make the minimum payments on the other loans until the higher interest loans are paid off. Then I will move on to paying down the lower interest loans. That said, I expect to keep my 4.25% loan around for as long as possible. At least at present, I expect that I will be able to do better by investing that money that I could use to pay off the 4.25% loan.

4. What other personal financial goals have you set for yourself?

Unlike many other people, my goal is not to be debt free. I intend to use debt financing where it benefits me. As long as my cost of capital is low and my investment prospects are higher, I intend to take on debt. My goal is not to incur any “bad” debt, such as high interest credit card debt. In that area, my goal is to go my entire life without carrying a balance on any credit card. I am doing well so far

5. What is your weakness in regards to your personal finances and how do you think you can improve it?

My weakness is a recent change in my frugal nature. I have always been frugal / miserly / CHEAP. Recently, though, that has changed and I have started to spend more freely. It is just this past year that I have really noticed the change. It came right after I secured summer employment with law firms for two consecutive summers. I rationalize it by telling myself that it is the normal by-product of more certain future income prospects. It is not a terrible thing, though, because I know I could tone down my unnecessary spending if my income situation changes. That said, I would still like to keep it in check. I may end up hating law firm life and want out fairly quickly. If that is the case, I will wish I had saved more and spent less with that temporarily increased income.

6. How do you manage your finances? Is there a particular software you use to keep track of your money?

I don’t use any special software. I use Excel spreadsheets that I created myself the calculate returns and totals. I keep track of everything with my spreadsheets. It allows me to keep a handle on all that is happening in my financial life. Once I have calculated everything myself, I publish the results on my blog, Laws of Finance (, as well as on NetWorthIQ, which can be accessed from Laws of Finance. Just this April, I started to publish my quarterly statements of financial assets. I hope to keep that up each quarter on Laws of Finance.

7. What do you think is the biggest money mistake law students make?

The biggest money mistake that law students make is getting depressed about their loans. They figure that, since their loans are so big already, a few more thousand here or there won’t matter. That is a recipe for disaster. Just because something is terrible doesn’t mean that it is alright to make it worse. Also, and I know this goes against my own admissions earlier, law students must remain frugal throughout law school and beyond. You don’t need to live more luxuriously as your income (or prospects for income) increase. The way to financial freedom is to save that extra income so that you won’t have to work forever.

8. Do you have any suggestions to other law students regarding their personal finances?

My only advice is, “Pay attention!” Don’t just forget about your financial situation because you don’t like the looks of it. Is that extra debt that you are taking on actually worth its cost to you? Do you really need that $6 specialty coffee drink everyday? If you consider the impact of your choices on your overall financial health, you will be much better for it. Just thinking about it might be enough to avoid making some bad decisions.

Thanks, Laws of Finance for that great interview! Stop by Law of Finance, read some posts, and sign up for his RSS feed.

[tags]law school, student debt, money, frugal, personal finance[/tags]