Living within the Student Budget: Can it Be Done?
The short answer is - yes. Data collected from current students indicates that, on average, our students are living within the standard student budget. The next question - how do you figure out if you can live on our budget?
Boston University breaks down the student budget into categories of expenses (room & board, transportation, personal expenses, etc.). In reality, no one spends their money exactly that way.
This approach may help...
Step 1 - take the total budget and subtract the charged expenses (tuition and fees) and books (you have to buy those). Everything else that is left is available to you to use toward your living expenses. Divide by 9, to get the monthly amount available for each month of the academic year.
So for 2008-09, the student budget is $55,720. Tution and fees are $38,266 and books are $1,284. Subtracting these two amounts from the total budget leaves $16,170 or $1,796 per month.
Step 2 - track your expenses. Not easy to do if you don't live in Boston now, but you can make some educated estimates.
The budget figures below show the actual average spending for law students for the 2007-08 academic year.
Average Budget Breakdown
| Academic Year | Monthly | |
|---|---|---|
| Rent | $8,418 | $935 |
| Utilities/Food | $3,987 | $443 |
| Personal | $2,270 | $252 |
| Transportation | $908 | $101 |
| Totals | $15,583 | $1,731 |
Step 3 - create your budget. A worksheet can be extremely helpful - we've listed some links for you.
Budget Worksheets:
Step 4 - Review your budget periodically throughout the year and make adjustments to your spending habits if needed.
A budget is not a once a year chore - it's a tool for you to use so that you can tell if you need to change your spending or if you're on target.
We do understand that Boston is an expensive cities to live in and on a student budget it can certainly feel like there is never enough. For students used to living at a higher income level, this will mean a change in lifestyle.
So what's the point...
Save Yourself over $7,000
Here is another way to look at it: say that you spent $1,600 per month for the next three academic years, even though you could spend almost $1,800 per month under the Student Budget.
That means that you are spending $200 less per month. If you are borrowing to cover your living expenses this means that you are borrowing $1,800 less for one academic year and $5,400 less over three years.
On a loan with a 10-year repayment term and an 6.8% interest rate (i.e. Federal Stafford Loan), you will repay $115 per month for every $10,000 that you borrow. So over 10 years, borrowing that $5,400 costs $62 per month to repay or $7,440 in principal and interest. The cost to borrow that same amount through a private loan would be higher and so would the savings.
Practical ideas
- Save money now - while you're working - have some savings to use instead of a credit card
- Look for an apartment where your rent includes heat.
- Live with a roommate.
- Take the T - having a car in Boston is very expensive.
- Put off unnecessary expenses until after law school.
- Take advantage of student discounts and on-campus activities.
- Brown bag your lunch or organize potluck dinners with friends.
- The small stuff adds up!
- Some students have found it helpful to manage their money by opening both a savings and a checking account. At the beginning of each semester they deposit their refund check into their savings account and transfer just enough each month to the checking account to meet their monthly expenses so that they don’t run out of funds before the end of the semester - look for a high yield account like ING or HBSC.
Live like a lawyer when you're a student and you could end up living like a student when you're a lawyer.