i The Frugal Law Student | 2007 | July

Law School
Frugality
Personal Finance
Productivity
Nutrition

A Broccoli Floret a Day Keeps the Doctor, and the Debt Away

Written by Mrs. FLS

Today there was a interesting article on “MSN Money” about how adopting a vegetarian diet can save you money. The article notes that this sometimes seems counter intuitive since produce can seem pricey and the Junior Whopper on the dollar menu, is only, well, a dollar. But generally speaking, while chicken breasts and ground round cost around $3 a pound; beans, lentils, and rice cost less than a $1 a pound.

Of course man (or woman) cannot live on lentil soup alone. And fruits and veggies don’t come cheap. To save money the vegetarian shopper should choose produce that is in season, look for deals on locally grown food, and buy frozen items because they can be cheaper, and best of all do not go bad before an urge to snack on those asparagus spears strikes.

Vegetarian shoppers should avoid products that are meat product posers-you know the veggie “hot dogs” that wouldn’t even fool someone who’s sense of taste had been horribly managled in an accident. In all honesty there are some tasty meat replacements out there (delicious BBQ “riblets” anyone?) but many can cost more than $5 a pound! The meat may be fake, but the hit to your wallet is very real. Also, if you have been free basing “Chik Nuggets” it is worth looking into the dark side of too much soy.

By sticking to the basics-things like oatmeal, rice, beans, and lentils bought in bulk-and accented with fruits and vegetables, a vegetarian can live frugally and deliciously. And what really saves them money in the long term are the benefits to their health. Some studies have shown that a plant based diet can add years to your life, and ward off ailments like cancer, heart disease, and dementia. By not having to pay the big hospital and doctor bills that come with these diseases, you can save a ton of money in the long term.

So put down that drumstick buster! Your wallet, and your body, will thank you.

The Frugal Law Student Month In Review-July 2007

Written by Brett McKay

July was a good month for The Frugal Law Student. We had 6,851 visitors during the month of July. This was a decrease from 12,000 we had in Jun, but that was expected given traffic has died from the hoopla the Massive Personal Finance Resource List caused. On the plus side, we reached the 300 mark for RSS subscribers. Thank you to all my readers as well as fellow bloggers who have helped spread the word about The Frugal Law Student

Most Popular Posts

Here are June’s most popular posts based on the number of visits:

  1. Massive Personal Finance Resource List- The Massive Personal Finance Resource List was the top post again. This is what helped generate the 12,000 plus visitors last month. I’m glad so many people still have found it helpful.
  2. Festival of Frugality #84- I hosted my first blog carnival this past month. It was a lot more work than I thought it would be, but it was fun reading all the great frugality posts.
  3. 180 Money Saving Tips That Will Turn Your Life Around 180 Degrees- I wrote this in May, but it’s still a popular one. Again, I’m happy that people are still finding this post helpful.
  4. 10 Ways To Make Money and Save Money On Facebook- I wrote this back in June. Facebook applications have gotten a lot of press lately, so I’m sure that has something to do with the popularity. If you want to learn more about Facebook applications, make sure to check out my other blog Best Facebook Applications.
  5. The Best Personal Finance Advice I’ve Ever Received- In this post, I write about the personal finance advice I received from my friend and mentor, Charles Smith.

In Case You Missed It…

Here are a few of my personal favorites from the month:

  1. Top CEOs Don’t Read Getting Things Done- If you want to be an innovator in your field, read other books besides Getting Things Done.
  2. Crouching Debt, Hidden Credit Card Fees- Learn about hidden credit card fees and how you can avoid them.
  3. Why Personal Finance Books Suck- A rant on why I find personal finance books so annoying.

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Submit Your Posts To The Carnival of Personal Finance #112

Written by Brett McKay

I’ll be hosting next week’s Carnival of Personal Finance (Monday, August 6th) here at The Frugal Law Student.

Please submit any articles related to personal finance to http://blogcarnival.com/bc/submit_162.html by 9PM Central on Sunday, August 5th. The Carnival of Personal Finance covers a wide spectrum of personal finance related topics. Articles can be about investing, saving, real estate, you name it.

Also, if you’re not already a subscriber to The Frugal Law Student, please subscribe in one (or both) of the following ways:

1) RSS Readers subscribe to http://feeds.feedburner.com/TheFrugalLawStudent

2) Email Newsletter (you can unsubscribe easily, and you only get emailed if I write a post. The emails go out once per day with all posts rolled up into a single email for that day around 11am EST). Subscribe to emails here

I’m looking forward to reading your submission!

When You Dream Big, Every Penny Counts

Written by Brett McKay

The New York Times hs a great article about the lengths young people are taking in order to save money to buy a condo in Manhattan.

The Aguerros

The Agueros married five years ago. They dreamed of owning an condo in Manhattan; however, the $445,000 price tag for a two bedroom condo made that dream seem impossible to reach.They both had student loans and credit card debt, and their combined income is a little more than $100,000. On top of that, they welcomed a new baby into their life. While their salaries qualified them for the mortgage, it was going to be a challenge to come up with a down payment.

But the Aguerros made it happen. How’d they do it? Let’s take a look.

Have the right mindset. If owning your home or paying off your student loans is your goal, you have to make that your top priority. As Mr. Aguerro says, “If you want to own a place, you have to do everything to own a place and everything else comes second.”

Quit your vices. The Aguerros quit smoking and stopped going out with friends to drink. By quitting they not only saved a lot of money, they also received the side benefit of a healthier life.

Cook at home instead of going out. Instead of going out with friends, the Aguerros started having meals at their home. Eating out may be convenient, but costs can add up quickly.

Save your tax return. Most people look at tax returns as free money they can use to splurge. Instead of buying stuff you may not need, sock that money towards your goal. The Aguerros were able to put a couple of thousand dollars towards their goal by saving their tax returns.

Quit impulse shopping. Mrs. Aguerro had a weakness for $300 Prada shoes; however, after they made it a goal to buy a condo, frivolous purchases stopped. By watching what they bought, the Aguerros saved over $15,000 in a year. If you feel the temptation to make an impulse purchase, remember to practice tantric shopping.

Get a second job. Mr. Aguerro did freelance work, but was scarce. So he got a job at a bank. The couple lived off just Mrs. Aguerro’s salary and socked Mr. Aguerro’s pay into savings. One possible side job is to become a consultant of some kind.

Amy Wegenaar

Amy Wegaenarr is single and 31 years old. She had a dream of owning her own place after she started to find paying rent in the Lower East Side difficult. How did Ms. Wegenaar make her dream come true? Let’s see.

Set aside a certain amount each month. Ms. Wegenaar started putting aside $400 from each pay check toward her downpayment. Make savings automatic by setting up an automatic deposit into a high yield savings account. The less you have to think about saving, the easier it is.

Save all your bonuses and raises. Instead of splurging, Ms. Wegenaar saved her bonuses and raises. Whenever you get a raise, act like you never got it and put the money into your savings.

Shop with a grocery list. Shopping with a grocery list is the best way to cut back on food costs. When you know what you’re going to get at the store, you’re less likely to make impulse purchases. Also, look for other ways to cut your food bill. It’s possibly the easiest thing to reduce in your budget.

Make your own clothes. Ms. Wegenaar sewed her own dresses from discount fabric she bought in the Lower East Side. Do it yourself is always a great money saver. If you don’t know how to sew, at least buy your clothes at thrift or discount stores.

Obi Onyejekwe

Mr. Onyejekwe really impressed me. He had been saving in a 401(k) since his first job at J.C. Penny. After college, he saved over half his salary from his first job. When he decided he wanted to become a homeowner in Manhattan, he had over $50,000 saved. The only problem was he became a big spender. Luckily, Mr. Onyejekwe turned it around. Here’s how he did it.

Surround yourself with people who have similar goals. Part of Mr. Onyejekwe ’s spending problem was that his friends liked to spend money. As a result, he spent money. When Mr. Onyejekwe finally decided to get serious about saving money for the condo, he surrounded himself with people who were as obsessed as he was about owning a condo. If you want to save money, avoid hanging out with big spenders. Additionally, friends with similar goals are a great resource for encouragement and ideas on how to make your goals happen.

Carina Katigbak and Michael Lenton

Carina and Michael were engaged to be wed. They had the goal of purchasing a $300,000 apartment on their combined annual income of $100,000. Their biggest obstacle was paying for a wedding. How could they do that and still afford owning a condo? Here’s how they did it.

Set priorities. Carina and Michael made owning a condo a priority. When they considered the cost of a fancy wedding they would ask themselves, “Do you want to have a fancy wedding, or do you want a place to live in?” I like this exercise. My wife and I have started doing it as well when we’re tempted to buy some frivolous thing.

Interview With Ann K. Levine, Law School Admissions Expert and Coach

Written by Brett McKay

Ann K. Levine was kind enough to take part in an interview about managing law school debt. Ann is a law school admission consultant and proprietor of www.LawSchoolExpert.net and http://lawschoolexpert@blogspot.com. Since starting LawSchoolExpert in 2004, Ms. Levine has helped more than 500 applicants gain acceptance to law school. Ms. Levine works one-on-one with law school applicants nationwide, calling upon her expertise as the former director of admission for two ABA law schools. She reviewed thousands of applications each year and was primarily responsible for making all admission decisions at Loyola Law School and California Western School of Law. She now uses this expertise to the benefit of applicants, helping them create applications that maximize their chances for admission. Her upcoming webinar, “I took the LSAT; Now What?” is being offered free of charge to readers of The Frugal Law Student (regular rate is $150). You can sign up at https://www.gotomeeting.com/register/403403332 . Ms Levine can be reached at alevine@lawschoolexpert.net.

1. Do you still have student loan debt? If so, when would you like to pay it off? What’s your plan to reach this goal?

Yes. I think I have a little over $40k left to pay off out of $60k. I graduated from law school in 1999. I’m not very concerned about when I pay it off because the interest rate isn’t even 4%, and (up to a certain income limit) there’s a little break on federal taxes for student loan debt. I pay $273/month. It’s roughly equivalent to my cable bill and cell phone combined; I don’t consider that too much to pay each month for a degree that allows me to earn my living.
2. When you were in law school, what action or habit do you think saved you the most money while in school?
I was stupid. I even had a full scholarship one year and still took out the full amount of federal loans. I didn’t understand what I was doing or the implications. I can think of lots of habits that wasted money when I thought I was saving like buying clothes at discount stores (but still buying clothes!). I remember justifying getting a manicure before every job interview. I don’t remember ever cooking dinner – I always ate out. I chose a very expensive private school over a very cheap state school. I chose an expensive city over a cheap city.Financially, I did it all wrong. I guess the point for your readers should be that your mistakes, if you make them, won’t kill you. Try not to make them, but know that (if you do) it won’t seem like a big deal once you’re earning your living and a few years removed from it all. But I never, ever had credit card debt and that is probably the best habit I started in law school.
3. As a law school admissions coach, what advice would you give pre-law students about preparing financially for law school?
Understand what you’re doing when you sign the loans on the dotted line. Every time you buy a drink, think about the interest you’re paying on that drink. Stop buying drinks – they are too darn expensive anyway. Manage your expectations – don’t spend your loan money thinking you’ll be rolling in dough during your first job. It just doesn’t happen that way. The more you make, the more you spend. And, usually, that first job isn’t all it’s cracked up to be and you don’t want to be a slave to it.
4. What advice would you give to a law student in school right now?
“If you live like a lawyer while you’re in law school, you’ll live like a law student when you get out.” Stop eating out. Just cook. Seriously. It’s not that hard. And absolutely no credit card debt.
5. What should law grads do about managing the debt load they may have taken on during school?

  • Have your monthly payments automatically withdrawn form your account. I don’t even feel my loan payments anymore. Each month, it’s a mere blip on my radar.
  • If having student loan debt bothers you, use half of every bonus you get to pay it off. But don’t try to pay it off your first year. You have to pace yourself.
  • Pay off credit card debt quickly, but remember that some debt is good debt. Make your monthly payments. I promise, even if that $400 sounds intimidating now, you won’t even feel it in 10 years – even if you don’t work for a big firm. Managing your finances does get easier, and you will make a lot more money 5 years out of law school than you do your first year. (I’m not convinced that’s the case at big firms, but I know it’s true at small and medium size firms).
  • Prioritize. Don’t pour all your money into student loans at the expense of waiting to buy a home or pay retirement. Pay yourself first, then everybody else.
  • Open a retirement account immediately. Max it out every single year. Live off what’s left and you’ll never miss it.
  • Don’t consolidate loans until you are happy with the interest rate because you can only do it once.
  • Practice living like an adult first. I made the initial mistake of trying to pay off my loan debt of $60k in 10 years and the payments were huge (at the time it was 8% interest). I was just learning how to live by myself in a new city on a salary for the first time and bit off more than I could chew. I suggest keeping things manageable – spread it out over 30 years, especially for those first few years.
  • There’s a lot of pressure in the real world to look like you’re making good money. Don’t buy that BMW right away. I know attorneys who waited until they made partner before they bought their first new car. They are the smart ones.

6. What do you tell a law grad who says they will only work at a big firm because they want to pay off their debt quickly? What other options would you suggest this person take?
I know lots of people who did this. They were all single. It’s not a great plan for someone with a family to support because you’ll never see your family working those kinds of hours.Just don’t expect to meet someone to start a family with while you’re working 90 hour weeks. There are other options. I really admire my brother who graduated from NYU with an offer from a very big NYC firm. He decided to be a Manhattan District Attorney instead. But, I’m not sure he would have made the same choice without NYU’s great loan forgiveness program. Live by your own priorities – don’t get too caught up in perceived prestige.
7. What is the biggest money mistake that law students make?
Not understanding that every dollar you spend is really that dollar plus interest.
8. How could using your coaching service save law students money?
I’ve seen applicants waste money on a lot of things – books they don’t need that offer generic, one-size-fits-all advice, “Pre-Law” workshops, getting a paralegal certificate, applying to the wrong schools, applying to too many schools, going back to school to try to beef up a poor GPA. These mistakes add up quickly. I work with people who applied the year before without help and didn’t get in anywhere, then after working with me they get into law school. Everything they did the previous year was a waste of time and money. And they lost out that year of attorney income too. One way I save people money is by helping them use their application-fee budget efficiently so they aren’t wasting a lot of money on impossible schools or schools that are all wrong for their ideals and goals. I can also help select schools that would be likely to offer scholarship money – I pay for myself thousands of times over this way! I pay an accountant to help me save money on my taxes. I pay a financial planner to help me save money for retirement. As a law school admission coach, I can save you a lot of money on the mistakes you won’t be making.

Thanks, Ann, for that informative interview! If you’re thinking about going to law school, go by Ann’s site. Also, remember to sign up for her upcoming webinar about law school admissions. This $150 service is free to Frugal Law Student Readers.

Featured Resource

When attending Law School it is important to figure out where you want to practice Law. The rules of law vary by locality so there is a difference between becoming an Illinois Attorney and having a law office as a Texas Attorney so find about that State’s requirements.

4 Serious Money Saving Tips For Your Cell Phone

Written by Brett McKay

Cell phones have become a necessity. Many young people are forgoing land lines and just sticking with a cell phone. However, the costs of owning a cell phone can get out of control if you don’t pay attention. Here are 4 things you can do to save on your next cell phone plan.

What kind of user are you?

How much do you plan on using your cell phone? Cell phone plans are based on use, so the more you use, the more you spend.

Compare plans

Look to see how many anytime minutes you get and the costs that go with using them. Also, check when those free night and weekend call times start. While most companies start at the same time, some start later.

Check for long term deals

If you really like the service provider, look into signing a long term contract with them. Companies offer discounts for longer term contracts, such as waiving initiation fees.

Pay only for the services you need

If you don’t text message, don’t buy text messaging service. Also avoid sending pictures through your cell phone. Many providers charge a fee for each photo you send. And please, don’t waste your money on stupid ringtones and games.