Bookkeeping For Law Students

Bookkeeping For Law StudentsThis week we welcome back guest writer Hillary Vaillancourt to talk about keeping your expenses in order as a law student.

With the frequent use of online banking, it’s easy these days to put our finances on autopilot. We create automatic payments for our bills. We get billing statements sent to inboxes and probably move them directly to the trash without even opening them. In short, we’re not paying attention to our money or our budget.

That can be a big problem down the road. As a law student (especially if you’re going to law school straight from undergrad), you probably aren’t worried yet about buying a house or perhaps getting a business loan to open your own practice.

There are numerous expenses and financial goals that can be impacted by poor financial habits in law school.

Trust me, I understand how completely time-consuming law school can be. Sometimes I feel like I’m still briefing cases, and it’s been more than ten years since I was in law school! However, your future is waiting for you. It’s important to establish good financial habits now before you start making the big lawyer dollars later.

Here’s how to manage your money now to set yourself up for success later.

What is bookkeeping?

Bookkeeping is the process of tracking your financial details. This can include recording any checks you write, any electronic payments you make, or any automatic bills that you expect to debit from your account.

Bookkeeping also includes any deposits that are going into your account. This way you know exactly how much money should be in your account at any given moment.

Another reason for bookkeeping is to keep track of expenses or deposits that may not happen automatically. For example, if you have $200 in your account and write a check for $100, you should have enough money to cover that expense. However, if you forget that you wrote that check and then spend $150 on a shopping spree, your account would only have $50 in it when the person you paid is trying to cash that check.

That would result in an overdraft fee and unnecessary expenses.

You might be saying to yourself, “Nobody writes checks anymore.” However, I can say as a practicing attorney that, yes, people do write checks. When I handle real estate closings, I write checks to pay for taxes at the county court’s office. I also write checks from my trust account for various expenses agreed upon between the buyer and seller.

Sometimes checks are the only form of payment that is accepted by certain places. In order to pay for my business license in some of my states, I had to submit my paperwork by snail mail with a good, old-fashioned paper check.

So, yes, getting into the habit of writing down all of your debits and credits to your accounts will serve you well when you graduate.

Pay Attention To Your Money

One wonderful advantage of keeping track of your money with quality bookkeeping is it forces you to pay attention to your money.

As mentioned, it’s far too easy to put your finances on autopilot when you aren’t keeping up with your bookkeeping.

Even as a law student, you should be aware of how much money you have coming in and how much money you have going out.

This may help ensure that you don’t borrow too much student loan money or that you have enough to cover rent every month. Or, maybe you want to make sure to save some money so that you can put a down payment on a house after graduation.

These are all important financial goals that can be achieved through regular bookkeeping.

Create Habits

Bookkeeping isn’t just about checking your accounts on a regular basis. Bookkeeping is also about building good habits. These types of habits will serve you well while you’re practicing law.

The number one reason why lawyers get bar complaints is the mishandling of client funds in trust accounts. Usually, these are simple mistakes, but mistakes that possibly could have been avoided with a little more care and attention.

Law school is a great place to get into these good habits so that when you do graduate and you are handling money for clients, you don’t get yourself into a sticky situation.

Even if you don’t intend to ever work with client money, or maybe you never intend to work with clients, these are still good habits that can impact your legal career. Some jobs require security clearances where financial problems could be a barrier to entry. Some jobs require a credit report to vet candidates.

Most state bars also will require you to answer questions about your financial state to show that you can be a trusted fiduciary.

Whether you plan to work with clients or not, practicing good bookkeeping habits now will be a huge advantage to you later on.


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About Hillary Vaillancourt

Hillary Vaillancourt is a lawyer and writer at The Vaillancourt Law Firm, LLC. She has experience in a wide variety of matters including food law, education law, real estate law, family law, criminal law, contracts, and estate planning. She earned her JD from New England Law|Boston and is licensed in Virginia.

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