Full-time private law schools charged an average of $51,000 for tuition and fees. Add in the cost of room and board, transportation, and school supplies, and you’re faced with an annual cost of attendance of over $70,000. At this rate, your law degree will cost you a minimum of $210,000 but with annual tuition increases, cost of living inflation and interest on borrowed money, you could easily leave law school with a total cost over $250,000.
For most law students, this is a daunting price tag. Not many have that type of cash under their mattress. This leaves loans as a student’s only way to finance their legal education. Obviously you want to borrow as little as possible. Every dollar you borrow accrues interest that you’ll have to pay back one day. Proper budgeting significantly reduces the amount you’ll need to borrow and, therefore, the amount of interest you’ll need to pay.
Estimates of cost of attendance provided by law schools assume you’ll pay a locally average rate for rent, personal expenses, and transportation. Students who are willing to budget their money and find more affordable alternatives will save thousands every semester.
Many law schools will give you a budget for the academic year (nine months). The optics might look better but you’re smart enough to know that you need to plan for the full calendar year, which is why we’ve built a full year budget for you.
Let’s imagine a hypothetical student attending Washington University (St. Louis) who managed to spend $10,000 less than the estimated cost of attendance. St. Louis has a pretty average cost of living, making it ideal for considering a hypothetical budget. People in an area with a higher cost of living can scale prices up, while those in a less expensive area can scale them down.
Law Student Budget
Downloadable template for creating a law school budget for those interested in building wealth.
| Jan | Feb | Mar | Apr | May | June | July | Aug | Sept | Oct | Nov | Dec | Total | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Income |
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| Loans | $1,155 | $1,155 | $1,155 | $1,155 | $1,155 | $1,155 | $1,155 | $1,155 | $1,155 | $1,155 | $1,155 | $1,155 | $13,860 |
| Income | $750 | $750 | $750 | $750 | $750 | $750 | $750 | $750 | $750 | $750 | $750 | $750 | $9,000 |
| Contributions | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $6,000 |
| Total | $2,405 | $2,405 | $2,405 | $2,405 | $2,405 | $2,405 | $2,405 | $2,405 | $2,405 | $2,405 | $2,405 | $2,405 | $28,860 |
Housing |
|||||||||||||
| Rent | ($800) | ($800) | ($800) | ($800) | ($800) | ($800) | ($800) | ($800) | ($800) | ($800) | ($800) | ($800) | ($9,600) |
| Insurance | ($20) | ($20) | ($20) | ($20) | ($20) | ($20) | ($20) | ($20) | ($20) | ($20) | ($20) | ($20) | ($240) |
| Utilities | ($80) | ($80) | ($80) | ($80) | ($80) | ($80) | ($80) | ($80) | ($80) | ($80) | ($80) | ($80) | ($960) |
| Internet | ($40) | ($40) | ($40) | ($40) | ($40) | ($40) | ($40) | ($40) | ($40) | ($40) | ($40) | ($40) | ($480) |
| Phone | ($40) | ($40) | ($40) | ($40) | ($40) | ($40) | ($40) | ($40) | ($40) | ($40) | ($40) | ($40) | ($480) |
| Total | ($980) | ($980) | ($980) | ($980) | ($980) | ($980) | ($980) | ($980) | ($980) | ($980) | ($980) | ($980) | ($11,760) |
Expenses |
|||||||||||||
| Groceries | ($400) | ($400) | ($400) | ($400) | ($400) | ($400) | ($400) | ($400) | ($400) | ($400) | ($400) | ($400) | ($4,800) |
| Restaurants/Bars | ($160) | ($160) | ($160) | ($160) | ($160) | ($160) | ($160) | ($160) | ($160) | ($160) | ($160) | ($160) | ($1,920) |
| Travel | ($100) | ($100) | ($100) | ($100) | ($100) | ($100) | ($100) | ($100) | ($100) | ($100) | ($100) | ($100) | ($1,200) |
| Transportation | ($300) | ($300) | ($300) | ($300) | ($300) | ($300) | ($300) | ($300) | ($300) | ($300) | ($300) | ($300) | ($3,600) |
| Clothing | ($50) | ($50) | ($50) | ($50) | ($50) | ($50) | ($50) | ($50) | ($50) | ($50) | ($50) | ($50) | ($600) |
| Household | ($75) | ($75) | ($75) | ($75) | ($75) | ($75) | ($75) | ($75) | ($75) | ($75) | ($75) | ($75) | ($900) |
| Gifts | ($50) | ($50) | ($50) | ($50) | ($50) | ($50) | ($50) | ($50) | ($50) | ($50) | ($50) | ($50) | ($600) |
| Netflix, etc. | ($80) | ($80) | ($80) | ($80) | ($80) | ($80) | ($80) | ($80) | ($80) | ($80) | ($80) | ($80) | ($960) |
| Gym | ($60) | ($60) | ($60) | ($60) | ($60) | ($60) | ($60) | ($60) | ($60) | ($60) | ($60) | ($60) | ($720) |
| Event Tickets | ($50) | ($50) | ($50) | ($50) | ($50) | ($50) | ($50) | ($50) | ($50) | ($50) | ($50) | ($50) | ($600) |
| Self-Care | ($100) | ($100) | ($100) | ($100) | ($100) | ($100) | ($100) | ($100) | ($100) | ($100) | ($100) | ($100) | ($1,200) |
| Total | ($1,425) | ($1,425) | ($1,425) | ($1,425) | ($1,425) | ($1,425) | ($1,425) | ($1,425) | ($1,425) | ($1,425) | ($1,425) | ($1,425) | ($17,100) |
Summary |
|||||||||||||
| Income | $2,405 | $2,405 | $2,405 | $2,405 | $2,405 | $2,405 | $2,405 | $2,405 | $2,405 | $2,405 | $2,405 | $2,405 | $28,860 |
| Expenses | $2,405 | $2,405 | $2,405 | $2,405 | $2,405 | $2,405 | $2,405 | $2,405 | $2,405 | $2,405 | $2,405 | $2,405 | $28,860 |
| Total Savings | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Note:Loans should be distributed over 12 months. Open up a savings account, deposit your loan proceeds and set up an automatic monthly transfer to your checking account. Contributions are amounts provided by family or from your savings. Health insurance is included in your tuition payments, so not included in this budget. The total should be $0, otherwise you’re overbudget.
School costs
First, the good news. Renting textbooks or buying them second-hand from previous students drastically decreases the cost of books.
Unfortunately, the bad news is that no amount of budgeting can change the rate the school charges (which going to be gigantic compared to the cost of books). If the tuition and fees of a school already puts you over budget, you’ll either need to find scholarships, financial aid, or a less expensive school.
This isn’t as harsh a dilemma as it may seem at first glance. Most people don’t pay sticker price for law school. Ninety-four percent of people who attend Washington University receive some form of financial aid, with 80 percent receiving half or more of the cost of tuition.
If a school remains too expensive, even after accounting for financial aid, settling for a less expensive school doesn’t mean abandoning your long-term job plans. Oftentimes, more affordable schools extend many of the same opportunities as their more expensive counterparts. The ABA required employment disclosures of schools are a good place to start searching for the least expensive school that can accommodate your goals.
Room and board
Housing is typically your largest expense. Because you’re paying out the nose for tuition, in your case your housing expenses will be your second largest expense.
Be deliberative about your housing choice. It will have a big impact on your ability to build wealth later on.
The best advice will always be: live like a law student. You’re worse than broke right now, so adjust your expectations accordingly.
A two-bedroom apartment in St. Louis rents for about $1,000 plus $180 in utilities. Split between you and your roommate, that comes to $590 a month. The average monthly cost of food is around $310, bringing you to a monthly room and board spending of $900.
We’ve built some flexibility in the budget above by using looser numbers but ultimately our budget has you on a path to spend $14,400 a year on rent and groceries, which is exactly what Washington University is telling you to spend for nine months. See what we’re doing here?
Don’t assume that your school’s provided housing and meal plan is the most budget-friendly option. Evaluate your options and if it’s cheaper to live off-campus and buy your own food, do it.
Transportation and insurance
Schools assume that you’ll have a car and will need to purchase a parking pass from them. In the case of Washington University, car-related expenses could cost you around $3,600 for the academic year. This includes a hypothetical car payment, but in reality – if I had to have a car – I’d use loan proceeds to purchase a used car under $10,000. Cars are where wealth goes to die.
Better yet, rely on public transit for transportation and car sharing services when you need them to save yourself a tremendous amount of money. In St. Louis, a semester public transit pass costs $175, for a total cost of $350 dollars an academic year. That’s over six times cheaper than having a car. Many universities allow you to use a student ID card to access public transit for free. Let someone else worry about maintaining the car and you can rent it when you need it.
Health insurance, like tuition, is another mandatory expense. The only caveat is if you’re under 26 and have a parent with a health insurance plan that covers children. In this case, you’ll be able to have this expense waived. The good news is that law school health insurance is usually a good deal, so you benefit from their negotiated prices.
Personal expenses
Washington University assumes $5,000 for miscellaneous personal expenses. Itemizing your budget will allow you to spend much less than that.
Household goods (e.g., toiletries, cleaning supplies) should cost you no more than $900 a year. Six hundred dollars should also cover the cost of maintaining your wardrobe. A mobile plan shouldn’t cost more than $40 dollars a month.
You’ll also need to account for one-time purchases such as a mattress, a bed frame, and pots and pans. These types of purchases should cost you about $1,000 over the course of law school. Annualized, that equates to around $300.
You need to put aside some money for entertainment and self-care as well. Not having an outlet for school-related stress can lead to burnout. That being said, it’s in your best interest to keep your entertainment spending as low as possible, especially if you’re borrowing.
Income
A critical part of any budget is identifying how much you’ll be earning and where that money will be coming from. Unlike practicing lawyers who primarily rely on their salaries, law students have a broader pool of possible income sources. This budget assumes the worst, that you’ll have to borrow every penny you spend on law school. Often the situation isn’t this dire. Besides taking on loans, students have three primary ways of financing their legal education: scholarships, family assistance, and personal savings.
Scholarships and other forms of aid are preferable. Why pay for your law school when someone else could? Beyond need-based aid, law schools set aside a number of scholarships each year for competitive applicants. Applying to schools where your LSAT and GPA are above the median gives you the best shot at getting scholarships. Private scholarships are also available.
A good way to manage your “income” if it’s mostly loans is to set yourself a limit before the semester begins. First, set up your budget so you have an idea of how much money you’ll be spending this semester. Once you’ve set your budget, put enough money to cover your monthly income into a savings account. Set the account to automatically transfer your “income” to your checking account each month. If you only spend the money disbursed from the savings account, you’ll have no choice but to stay within your budget.
For some, family can also help pay for law school. While deciding how to pay for law school, sit down with your family and see if anyone will be able to help. Even a small amount of assistance can lead to significant savings in the long run because of the fees and interest you’ll pay on the money you borrow.
Very few law students have savings large enough to pay for law school outright. That’s alright. Even a few thousand dollars can make a big difference. I’ll continue to belabor the point that every dollar you don’t borrow is a victory.
Although it might not be advisable to work during your first two semesters of law school, you can save up some money over the summer if you work and continue to budget. Regardless of whether you secure a summer position at a Biglaw firm or intern for some level of government or non-profit, the savings you’ll accumulate will have a significant impact on minimizing your debt.
Three students
To drive home the importance of following a budget, let’s imagine three students at Washington University: John, Rich, and Sally.
John borrows the full cost of attendance and doesn’t budget. He’ll graduate with almost $270,000 in debt. Assuming that he borrowed at six percent and takes the average 18 years to pay off his loans, he’ll pay slightly over $2,000 a month during those 18 years. In the end, he’ll have paid over $170,000 in interest.
Rich avoids John’s mistake of not having a budget. However, Rich still needs to borrow to cover all of his expenses and graduates with almost $230,000 in debt. Assuming he borrows at the same rate as John and takes just as long to repay his debt, Rich will pay only $1,750 a month. In the end, he’ll have paid $148,000 in interest.
Rich’s case shows us the power of budgeting. Having a budget allows Rich to borrow $40,000 dollars less than John and pay $22,000 dollars less in interest, all while having a $250 smaller monthly payment.
Sally both budgets and finds financial aid that covers half of her tuition. She’ll graduate with $133,000 in debt. Over 18 years at 6 percent, she’ll pay $1,000 a month. Her total interest payment will be $85,000.
Sally’s plan shows us that maximizing your income, in her case by finding financial aid, is just as important a part of budgeting as minimizing expenses. Her scholarship allows her to take on less than half of John’s debt while also making half the monthly payment.
Sally isn’t an extreme case. You can easily out-budget her. This budget isn’t assuming you eat packaged ramen three meals a day and sleep on a cot with four roommates. If you want to cut your expenses further than the sample budget, go for it! You also can take on less debt than she did. Use the strategies outlined in the income section of this article to maximize your financial aid.
It should almost go without saying that all three of our hypothetical students will pay significantly less in interest on their student loans if they refinance them as soon as they graduate (assuming they aren’t pursuing something like PSLF).
How would you change this budget? Any items I’ve missed? Let me know what you’d change in the comments.
Joseph Parise is a junior at the University of Buffalo. Joseph grew up in New York and is majoring in Philosophy and Economics. He is currently taking a gap year to study for the LSAT exam and to serve in the US Air Force Reserves.
