How to: Live on a budget

One of the crappier parts of law school is learning to live cheaply. Each semester, I get a set amount of money for a loan disbursement and whatever I make from working. It’s a bit easier living with two incomes instead of one but it doesn’t mean we don’t have to use a budget.

Our budget is fairly set each month (though we are a little behind this month since I don’t get my disbursement until tomorrow). The budget is broken down into income, expenses, and savings/debts. I use excel to keep track of everything because I’m absolutely terrible at math and it’s so much easier. What we typically do is print a hard copy for the fridge and write down every single cent we spend during the month. About once a week, I put everything in the computer and make sure we aren’t over budget on anything too much.

Income for each month

Income for each month

This is how we lay out our income for the month. I get $1,000 a month in loans, plus I work about 20 hours a week. Patrick is hoping to have a full time (almost full time) job this semester so we guessed at his income. When we put something in the actual column it will automatically populate the difference.

Expenses

Expenses

These are our monthly expenses. Our rent is the only bill we have paid this month so far and because I don’t technically have income yet, we aren’t tracking expenses. Right now, we have no budget for eating out or going out to have fun because I’m living off of loans almost exclusively. Each month, I go through and figure out how much we can estimate to spend on things like groceries. Since we were able to get a lot of groceries from my parents and have giftcards to use at the grocery store, our grocery budget is significantly less than it usually is.

Savings/Debt

Savings/Debt

Saving and debt to us is a huge expense that we should be planning for each month. We hope to put away $100 each month into our joint savings (plus a little in our separate accounts). Right now, my school loans are in deferment and Patrick doesn’t have loans so we don’t HAVE to make any payments on those if we don’t want to. I also have an Old Navy card and Patrick and I both have credit cards that need to be updated and put on a repayment “plan” in our budget, though we try not to carry balances.

Outcome

Outcome.

Finally, at the end of the budget, we have our monthly outcome. The budget automatically generates the numbers at the end of the month and we can see how well we did in the grand scheme of things.

Living on a budget isn’t easy. It requires planning and attention to what is going on in our life. If you have two incomes and two people spending money, it’s even more difficult to get both people on the same page. I handle the budget at our house but I rely on Patrick to make sure he puts in all the spending on the printed sheet. In the end, I’m hoping we can reach our personal finance goals earlier than we expected by using a budget. Fingers crossed!

The wonderful world of debt

Yes, this will be another somewhat serious post. Some things just need to be discussed and that’s just how it is.

Law school is awesome, don’t get me wrong. I wouldn’t change my decision to go to law school for anything. By far, the worst part of law school is the debt you take on doing to law school. I know some people don’t take on debt going to school (jealous!) but I am not one of them. If you can go to law school and not take on debt, more power to you!

I’m not that lucky. I’ve taken on a mound of debt. With an out of state undergrad and a private law school, my debt is huge. It’s hard not to feel discouraged seeing a 6 figure debt total. Law school may not be the best financial move, but to me it’s worth it and that’s what matters.

Debt is stressful and it can easily control your life. Make sure you know your loans and don’t take out more than you need to. Know your deferral time, how much interest you have, and if you can pay on it while you’re still in school. The most important thing with your debt is to make sure you stay on top of it so there is less of a chance it will get out of control.