Financial Mistakes I Made During Law School

When I just started law school, money was the last thing I was concerned with because I thought I’d make a lot more of it after I graduated. Well, almost two years after I graduated I know now that I should have worried about it a little more. In this article, I’m telling you all of the financial mistakes I made during law school and how you can avoid making the same mistakes.

Mistake #1: Taking Out Student Loans to Work For Free During the Summer

Yes, you read that correctly. I took out summer student loans to work for the judiciary and an educational institution for free. This is by far one of my biggest financial mistakes I made during law school. Without a lump sum payment, I’ll be paying this loan back at $102.71 every month for eight years. To be fair, some of it was for my bar prep course. But even after subtracting the course, I’d still be paying $103 for six years instead of eight.

For those of you wondering why on earth a human being with a functional brain would take out student loans to work for free? Well, let me tell you the circumstances that led to that decision. In law school, your summer jobs are almost as important as your grades. At least, that’s what it feels like during law school. Your 1L summer job can predict your post-graduate job, or at the very least, your 2L summer job. And in my school, everyone gets a summer job, even if a dean has to phone an old friend to hire you. But not everyone will get a paying summer job. So what are we advised to do? Take out loans to support ourselves.

If you had a public interest job, taking out loans was such a norm, that people felt lucky to get a loan. I did. But now, I know much better.

And for those who may say that my summer jobs helped me get a position as a state judicial clerk. Maybe they did. But the salary I make as a law clerk isn’t enough to pay for the loans that got me here. Read: A Law Clerk’s Salary—What to Know. So my advice on how you can avoid this mistake is the following.

Remember that there is life post-law school. And ask yourself, “would I be doing this if I wasn’t in law school?”

Mistake #2: Not Investing the Income I Received from Student Loans

I wish that I treated my student loans the way I treat my current salary: use some for necessities, save what I can, and invest what I can. I treated my student loans like something I was entitled to. In contrast, I’m not entitled to my salary unless I put in the hard work to earn it. I hadn’t done anything to earn my student loans except get good grades and not have terrible credit. I didn’t understand the value of a dollar. If I needed more green paper, I could simply apply for it.

If I treated my student loans the way I treat my current salary, I think I would have been more prepared for my finances post law school. I would have built good habits earlier. If I saved $50 every month in investments with a 5% annual return, by the time I graduated in three years I would have had $1,949.38. The amount isn’t what’s important to me, because my student loans eat up a little under that amount in a month. But what is important to me is that I would have solidified a good savings and investing habit for three years at a time when it was easier to do so, especially since the main bill I had to pay then was just rent, unlike now that I have property taxes due, student loans, utility bills, etc.

So my advice on how you can avoid this mistake is the following.

Treat your student loans like you would any other income you receive.

Mistake #3: Not Looking for a Part-Time Job Because I was Told Not to Work

My law school drilled it into us that they strongly advise students not to work during law school because the workload is a lot. Because I didn’t know anyone else who went to law school, I listened and refrained from working. Looking back, I wonder if this is more of an elitist issue: law schools don’t want to see their future presidents and judges sweating it out under a deep fryer. I don’t know. But what I do know now is that I could have worked and maintained my grades.

To be frank, I wasn’t in the Top 20 of my law school class. (Side Note— I still passed the bar exam on my first try anyway.) Instead of procrastinating with Netflix or by performing unnecessary apartment upkeep, I should have just gotten a job online. So my advice on how you can avoid this mistake is the following.

If you know you’re capable of doing more, then do it. It’s as simple as that.