Five Steps to Paying Off Your Law School Student Loan Debt Without Sacrificing Your Lifestyle

  • It’s possible to cut unnecessary or added costs from your day-to-day life without affecting the lifestyle you work hard to maintain
  • Think of any money you receive in addition to your salary as “unexpected money,” and use it to pay down your loan debt
  • If you haven’t thought about adjusting your tax withholdings to help you earn a large refund, you might look into doing so, and committing that money to your loans

These days, it’s not uncommon to graduate from law school with student loan debt in the six figures.

That can really get in the way for those of us who were hoping to enjoy our salaries to the fullest. After all, who wants to pinch pennies when you’re working as hard as we do?

Unfortunately, your loans have to get paid somehow. But rest assured, it’s possible to strike a balance. Here are five steps to follow to pay off your law school student loans without sacrificing the lifestyle you’re working hard to support.

Step 1: Figure Out Where Your Money Goes

Before you even start to put money aside to tackle your law school loans, it’s important to understand how you’re spending the money you’re currently making. So, write it down. All of it. This list should include everything you can think of that you spend money on in a year, and an estimate (note: overestimating is better than underestimating) of how much you spend on each. Consider everything from rent and groceries, to vacations and Uber costs. You might consider working on this list over a few days, to give yourself the best chance of creating as complete a list as possible.

Step 2: Consider Your Must-Haves

It’s time to make another list. This time, pull everything from the first list that you absolutely will not sacrifice. These are the things that make all your hard work worth it, the things that you think of first when you consider the lifestyle you lead. Maybe it’s your daily $5 latte or your membership to a boutique gym. Maybe it’s an annual winter vacation somewhere with a beach – no judgment. The key to making this list is being honest with yourself about what matters most to you.

Step 3: Compare

Now, look at your lists. What’s on the first list but not the second? Can you cut it or limit its costs in any way? Maybe you can do without daily Uber rides, and rely on public transportation instead. Or maybe you can cut down on takeout from the overpriced restaurant around the corner. Whatever you choose to eliminate from your routine, commit to putting the money you’d save toward your law school loans.

Think about creating an incentive system for yourself, where you allow yourself to spend money on something from your “cut list” after you make a loan payment – it can be easier than going cold turkey. What would you treat yourself with?

Step 4: Leverage Unexpected Money

Chances are, part of the reason you went to law school was the promise of a career with a good salary. And we’re willing to guess you’re able to maintain a pretty decent lifestyle on the salary you currently make. So how much are you really sacrificing by committing any extra or unexpected money you receive to your loans? By “unexpected money,” we mean money that didn’t come to you directly from your salary – payments for consulting work you’ve done, any bonuses you receive, even a birthday check from your parents. If you’re really devoted to paying off your debt, you might even consider the amounts of your annual raises to be extra or unexpected money, too.

Step 5: Adjust Your Tax Withholding

Many lawyers would prefer to take home as much money as possible in each paycheck and fill out their tax forms accordingly. But if you’re wading through law school debt, it might actually make sense to reconsider. Instead, adjust your tax withholding to the lowest possible level. That way, you’re more likely to receive one large refund check during tax season. Consider that money as “unexpected money” like in Step No. 4 and apply it immediately to your loan debt. This is a great way to take an additional chunk out of your loans every year without having to make ongoing sacrifices.

If you’re facing a sizable amount of loan debt, it’s perfectly normal to struggle with balancing the desire to pay it off with the need to maintain a lifestyle you enjoy. Once you commit to small changes like those listed above, however, you’ll be well on your way to finding a middle ground that works for you.