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Minimizing Debt

I recently listened to The Minimalists’ Podcast episode about money. It inspired me to review my thoughts and plans about money in my life and revise my current plans.

Day 178: Almost Full by Tom Small from Flickr (Creative Commons License)

Day 178: Almost Full by Tom Small from Flickr (Creative Commons License)

The Minimalists say, and I agree, “There is no such thing as good debt.” I took on a considerable loan when I bought my condo in 2014. I regularly pay more than my mortgage payment to pay off my loan faster. After listening to this podcast, I was inspired to play around with an online early mortgage payoff calculator. It showed me that I can pay off my loan significantly faster and avoid paying a substantial amount of interest by paying a bit more than I currently am each month.

As a minimalist, my overhead expenses each month are not that high. I don’t mind foregoing some temporary luxuries if it means saving over $25,000 in the long run.

Listening to this episode also made me revisit some of my other financial goals for the year – like fully funding my retirement account. I usually wait until the end of the year to do this, but there’s no reason to delay if I can do it earlier.

To date, my savings have been part of my personal and business checking accounts; however, after revisiting my financial goals, I want to open a separate savings account as well. This will be an account to deposit money that is “spoken for,” like my quarterly estimated taxes, charitable giving, retirement, as well as building a “rainy day fund” that contains at least six months worth of expenses. This can also be the account I use to set aside funds to pay off my mortgage faster and to save up for big purchases and travel.

Separating out my savings will make it easier to see how much I can save month-to-month and how much I really need to fund my life and run my business.

If you want to know more about my experience with minimalism, I suggest you read about the “packing party” I did in 2014 and got rid of everything that no longer added value to my life.

Top 3 Money Savers for Law Students

Law school is atrociously expensive. Not only is tuition expensive, you still have to pay for your rent, utilities, books, supplies, and your living expenses. Besides only buying things when they are on sale, having roommates, and keeping your apartment a few degrees colder in the winter, I want to share my top 3 tip money saving tips.

Spare Change

Image by kayaker1204 via Flickr1. Used Books

1. Used Books
When I started law school, I thought it was important to have pristine books so I wouldn’t be distracted by a previous owner’s marks. With new books, I could highlight them using my own 6-color system and fill the margins with my own notes. I also thought I’d keep these books forever because they were a resource for my new career.

After one semester of believing that, I switched to used books. They were so much cheaper, and other people’s highlights and notes weren’t distracting at all.  If anything, they enhanced my reading experience.  I sought out books that had more highlighting and dings because they were cheaper.

One time, I was looking at the listings on Amazon for a particular used text book. One was $40 cheaper than all the others because the owner accidentally spilled coffee on the book. I bought it. The coffee was only on the first page and the edge of the subsequent pages.  It didn’t even touch any of the text. Thanks clumsy guy!

At the end of every semester I turned around and resold as many books as I could on Amazon, including my study guides. The only downside to this system is a lot of books have new editions every year so you have a small window in which to sell your used ones.

(cc) Bede Jackson from Flickr

2. Free Lunch
My law school had lots of lunch time events and networking functions. Usually my first question wasn’t, “What’s the topic?,” but “What’s for lunch?” It was a win-win situation. The club got a big turnout for their speaker, and I got a free lunch. Even better, sometimes clubs would order too much food and at the end, they were giving the leftovers away to anyone, including non-attendees.

Another way to get free lunch is to network. Most attorneys understand that law students are poor and will pick up the check. For many of them, it’s a business write-off. However, you should always offer and be willing to pay, and you should only ask an attorney to lunch if you’re genuinely interested in getting to know them. The free lunch is a bonus, not the goal.

3. Free/Cheap Parking
I think parking on campus is one of the biggest rip offs of education.  My school has a big parking structure that is a 5-minute walk away from the law school. Parking there costs $720/year. Do you know how much ramen I can buy for $720?! There’s a campus parking lot that’s only 5-10 minutes further away.  A permit for the lot costs $210/year. This is where I parked my first year.

When I was in school, students could get a light rail pass for the whole year for $80. For my last two years of law school, I opted for this. I parked for free at the park and ride, rode 5-15 minutes into campus, and walked for 5 minutes from the station to the law school. If I needed my car on campus, I paid the $8/day for visitor parking. At the end of the year, it was cheaper than buying a parking pass.

The super frugal student can park on the street for free.  The only issue is they have to get there early in the morning when space is still available or possibly the afternoon after the morning students have left. Sometimes you have to be willing to drive around looking for a space.

These are just my top 3 money saving tips. There are plenty of other ways to save money while going to school. If you want to share your tips, please leave them as comments. I’d love to hear them.

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