Lawyers are some of the highest earners in the United States, but they can also carry a heavy burden of debt. On average, someone who is a lawyer can expect to have around $135,000 in debt, according to a 2018 survey by the Association of American Law Schools. In fact, the average lawyer debt is higher than the national average of $90,000. This can be a daunting figure for anyone considering a career in law, but it is important to understand the factors that contribute to the average lawyer debt and how to manage it.
The Causes of High Lawyer Debt
The most significant cause of high lawyer debt is the cost of higher education. Law school tuition fees can easily exceed $50,000 a year, and many lawyers also have significant student loan debt from their undergraduate education. On top of this, the cost of living while attending law school can be expensive. Lawyers also often incur additional debt due to the costs of taking the bar exam, purchasing malpractice insurance, and other professional expenses.
In addition to the costs associated with becoming a lawyer, the job itself can also contribute to high lawyer debt. Many lawyers serve as sole practitioners, which means that they do not have the benefit of a steady paycheck from an employer. As a result, lawyers may find themselves relying on credit cards to cover shortfalls in their income or to pay for unexpected expenses.
How to Manage Average Lawyer Debt
The most important step in managing average lawyer debt is to create a budget and stick to it. A budget should include all of the lawyer’s expected income and expenses and should be updated regularly. It is also important to track all spending and ensure that all bills are paid on time. Additionally, setting up an emergency fund can be helpful in reducing the need to rely on credit cards in the event of unexpected expenses.
Lawyers should also be aware of their credit score and take steps to ensure that it remains as high as possible. This can be done by making all payments on time, avoiding unnecessary debt, and maintaining a low credit utilization ratio. In addition, lawyers should be aware of the interest rates on their debt and consider refinancing or consolidating their loans if possible.
Benefits of Paying off Average Lawyer Debt
Paying off average lawyer debt can provide a number of benefits. The most obvious benefit is the reduction in monthly payments, which can free up money for other purposes. Additionally, paying off debt can improve a lawyer’s credit score, which can make it easier to obtain additional credit when needed. Finally, reducing debt can also provide a sense of relief and financial freedom.
Average lawyer debt can be a daunting figure, but it is important to understand the factors that contribute to it and how to manage it. Creating a budget and tracking spending can help lawyers stay on top of their debt. Additionally, lawyers should be aware of their credit score and consider refinancing or consolidating their loans if possible. Paying off average lawyer debt can provide a number of benefits, including a reduction in monthly payments, an improvement in credit score, and a sense of financial freedom.