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After the Bar

Personal & Financial

Finding Financial Success after Law School

Adam Etzel

Finding Financial Success after Law School
stefanocar75 via iStock

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You will face many challenges that include diligently working to become an outstanding lawyer while working through the financial stress of increasing living expenses and the debt likely incurred to go to law school. However, there are some simple practices that, if implemented, can help you achieve financial success.

Step One: Maintain a Budget

The first step to being financially successful is having a budget, which can be done by tracking your expenses. The key here is to compare your spending to your budget and strive to stay on budget. Thankfully, there are a lot of applications out there that will help make this easier. There are some free options, and others have a subscription, such as Mint, Simplifi, and YNAB. However, I recommend researching online, using the trial periods, and finding the one you like the most. Paying for a solid budget application is likely the amount you would spend on a single cup of coffee, so it is well worth the subscription price and giving up one cup of coffee every month. Many of these apps will link with your financial accounts, making it an easy process.

The other important part of a budget is keeping up with it at least once a week. Keeping up with your budget incorporates looking at your expenses and seeing where you stand compared to your budget. Regularly checking your budget is important because it will help you understand your finances and help you make logical decisions. You do not have to be perfect, but spending time understanding your finances will reward you long-term.

Step Two: Set Up an Emergency Fund

The second item is being prepared for an unplanned negative financial event. It is important to have an emergency fund. The rule of thumb is to have at least three to six months of expenses saved. Once you have determined your budget, you will know what amount you should have saved for three to six months of expenses.

Another item you should look at is disability insurance. If you are ever in a circumstance where you cannot work for an extended period, you want to be able to protect your income so you can continue to pay your expenses and student loans. Your employer may offer disability insurance as part of your benefits package, which you should consider. Depending on your needs, you may also consider adding coverage beyond your employee benefits. If your employer does not offer disability insurance, consider purchasing a policy.

Student loans are one of the biggest burdens a young lawyer carries. Paying them off will seem like a daunting task. However, if you have a budget and understand your finances, you can do several things, such as making payments above the minimum payment you can afford toward your student loans. Once you have that emergency fund with three to six months of expenses, you can start allocating extra funds toward your debt and work toward paying it down.

Step Three: Make a List of Outstanding Debt and Plan Payment Priority

Make a list of all your outstanding debt, and work toward paying off the smallest debt first. So, apply for an extra payment, if you are able, to the smallest debt until it is paid off. Then take the minimum payment of your now paid-off debt and apply that amount to the new smallest debt and any added amounts you can afford. This method helps you build momentum but also helps you grow your discretionary income or reduce your necessary monthly expenses once the debt has been paid off. Therefore, if an emergency event arises, the funds that were previously a monthly payment are now available for unforeseen circumstances.

Paying Off Federal Student Loans Versus Private Student Loans

There is one situation where I would consider deviating from the debt snowball method: paying off federal student loans versus private student loans. I would recommend prioritizing paying off the private student loans first over the federal loans. Private loans do not have the flexibility that federal loans have in payment options and other benefits, such as the Biden-Harris student loan forgiveness or public service loan forgiveness. It is important to know that depending on your payment choice, you might pay more interest over time but may have a lower monthly payment.

Call your student loan servicer regularly to understand what payment choice best achieves your financial goals and how that would fall within your established budget. Please visit for more information on student forgiveness and repayment programs.

Federal Loan Consolidation

Consider consolidating your federal loans into a consolidated federal loan. You will then receive a fixed interest rate that is a weighted average on consolidated loans while maintaining the federal student loan status. Consolidation with a private lender may be a possibility for some individuals but remember that you will lose the federal student loan status.

Additionally, apply for the Federal student loan debt forgiveness offered by the Biden-Harris Administration. Apply as quickly as possible to have the forgiven amount applied to your loan before the interest starts again. provides a deadline to apply for student loan debt relief by December 31, 2023, but applying as soon as possible will help ensure appropriate processing times to be completed by the deadline.

Your First Steps to Financial Health

Creating and using a budget to understand your finances is the first step to financial health. Setting up an emergency fund, taking advantage of disability insurance, and applying the debt snowball method is an excellent start to financial success. It is important to remember that these suggestions are generalized, and everyone has unique circumstances, so a regular consultation with a financial professional will help you on a more individual level.