For today’s Money Snapshot, we’re talking salary, net worth, debt, and more with reader D in New York City, who works as a Biglaw attorney. She noted, “One of the things my parents instilled in me from an early age is to never feel like anyone owes you anything, and to work hard yourselves in order to learn value. My parents are first-generation migrants and worked hard and sacrificed a lot for us.”
We got a few requests from readers to launch our own “money diary” series, so we’ve asked willing readers to fill out a form with lots of details about debt, spending, saving, and more! If you’d like to fill out the form and be considered for a future personal money snapshot, please click here to submit your response! You can see a PDF of the questions if you want to review them ahead of time. See others in the Personal Money Snapshot series here.
Please remember that this is is a real person who has feelings and isn’t gaining anything from this, unlike your usual friendly (soul-deadened, thick-skinned, cold-hearted, money-grubbing) blogger — so please be kind with any comments. Thank you! — Kat
Occupation: Biglaw attorney
Income: $400,000 base — base and bonus increases and varies per year and depending on other firms.
Net worth: $700,000–$750,000
Net worth when started working: At 23 years old (after graduating from law school), net worth was negative $30,000 because of student loans. (My student debt is comparatively lower than other lawyers as I did law school overseas.)
Partner: I am not including my boyfriend in my household income numbers or in my net worth numbers, as we don’t currently live together, though we are planning to move in together soon. My boyfriend is earning about 50% of what I am earning. It took a while to navigate it, and I think it will still be something of a tweak to navigate in the future because although he is older, his career is not so far along as he changed professions at 30 years old.
Living situation: Rent, $2,700/month
What does your debt picture look like?
No current debt
How did you pay for school?
My first law degree was through government loans, which are paid off now. My master’s degree was paid through savings — I worked for four years, saved as much as I could, then did my master’s. It cost so much…
Do you own or rent? How much do you pay monthly?
Rent is $2,700/month.
Home debt: Share your theories and strategies with us (including any that lead you to rent rather than own).
Hoping to buy one day soon — once I escape the law firm and into a less demanding job!
Have you paid off any major debt?
I cleared my law school debt ($30,000 approx). I took a while to do it as the interest rate was less than 2% for the duration of the debt — by comparison, the interest rate that the U.S. government levies on students here is criminal…
Savings, Investments & Retirement
How much do you save each month or year in retirement vehicles like 401Ks, Roth IRAs, and others?
I max out my 401k. The law firm does not match.
How much money do you allocate to other tax-savvy investments/accounts like HSAs, 529s, FSAs, and others?
I have a health care reimbursement account, where I put $1,000 pre-tax. I only learned a year or two ago that the leftover can be spent on minor “medical” expenses such as allergy medication or period pads — previous years, I let so much go to waste!
How much do you save outside of retirement accounts?
On average, 50% of my monthly post-tax salary
Talk to us about investments.
I use robo-advisor services. I am interested in branching out from the traditional stock/bonds portfolio, but not sure what seems safe at the moment, so currently continuing to save up for home purchase.
Do you have an end goal for saving or are you just saving for a rainy day?
I’m a dreamer and would love to retire from law before 40 years old and pursue something more creative like travel writing, which I do as a side thing by way of a blog, but I haven’t monetized it in any way. Not sure how to go about doing it as my friendship group and family network is strictly in the white-collar professional circle, so no one to bounce ideas off.
When did you start saving seriously? How has your savings strategy changed over the years?
My parents instilled a savings mentality since I was in primary school. We had a piggy bank that we would drop coins in, and then pocket money during high school. I went through a two-year period when I first graduated from law school where I was spending ridiculous amounts, but that changed after the second year when I knew I wanted to do my master’s degree, and I didn’t want to end up working forever as a lawyer.
What’s the #1 thing you’re doing to save money, limit spending, or live frugally?
Being more conscious about spending and the value derived from what you are spending on. For example, I used to spend A LOT of money on designer clothes/shoes and very expensive restaurant meals but have cut that significantly since the pandemic started. On reflection, it felt like I was feeling a hole…like a distraction from work and also to “keep up” with colleagues/friends. I still spend on travel though — you can outgrow clothes/shoes, but experiences are the things that live on in your memory.
Do you have an estate plan in place? A trust?
I have a will.
How much do you have in cash that’s available today?
How much do you have in cash that’s available in a week?
How much is in your “emergency fund,” and did you include it in the previous question?
How much do you have in retirement savings?
$100,000 (I only started contributing to the 401k about 4–5 years ago, so I am sadly way behind.)
How much do you have in long-term investments and savings (CDs, index funds, stocks) that are not behind a retirement wall?
How much do you spend on the following categories on a monthly basis?
Restaurants, bars, takeout, and delivery: $200–$300
Clothing and accessories: $250
Rent/living expenses: $2,700
Other major expenses: Travel — could be up to $15,000 a year pre-pandemic times
Health care – premiums and other costs: I think we have to pay about $150 a month, and the firm pays the rest.
What’s your spending range for these things? What’s your average?
Vacations – Range: Usually about $15,000 a year — there’s at least one or two long-haul flights, domestic weekend trips plus one international holiday a year.
Vacations – Average: $5,000
Charity – Average donation or giving amount: $200
Individual items of clothing – Average: $200
Apartment or house – Current main residence: $2,700/month rent
Fill in the blank on this question: I could save _____ if I stopped ______, but I don’t because _______.
I could save $10,000 a year if I stopped eating out and seeing friends, and about the same amount for clothing and travel respectively, but I don’t because I guess we have to live life!
If you’re married: When was your wedding, how much did it cost (total), and how much did YOU pay?
Not yet married, but we have discussed it, and ideally we don’t want to go above $20,000, though this will be tricky as our parents are located in two different countries. I would prefer a small wedding (i.e., no more than 20–30 people) and to spend on the honeymoon.
If you own, how much did your car cost?
I don’t own a car in NYC. If I lived elsewhere, I would!
If you own, how much did your home (permanent residence) cost?
I don’t own yet in NYC, sadly. A one-bedroom is close to a million, and a two-bedroom is close to 2 million. I’m also not sure if I want to be here long term.
Are there any other large expenses in your life, now or previously?
I moved three different countries in under five years when I was in my mid-late 20s. Even if your company pays something like airfares or partial shipping, the need to reset and restart your life is tiring. Buying new appliances for different countries in particular is crazy, and adds up much faster than say, larger furniture that can be shipped. I have been thinking of leaving NYC of late, but relocation costs are even more expensive in the post-pandemic era now.
Inheritance, Family, and Other Gifts
At any point in your life to date, has inheritance played a role in your money situation?
No. One of the things my parents instilled in me from an early age is to never feel like anyone owes you anything, and to work hard yourselves in order to learn value. My parents are first-generation migrants and worked hard and sacrificed a lot for us, and I rather they spend on themselves in their old age than save it for us — I don’t need nor want it.
How has your family provided financial support in your adult life, if any? (Or, do you provide support to them?)
Unlike a lot of students in the U.S., it is more common in other countries to stay at home during university. I am thankful for that. After law school (so around 23 years old), I left home and I refused any further financial support as I started earning by then.
Does your family provide any non-financial support, such as regular childcare?
No — unless you count regular phone calls with the parents as free therapy sessions? :P
Do you have a general money strategy?
Save as much as you can. I use a spreadsheet to track expenses. I could improve on the invest strategy, though not sure how…
Time vs. money — do you spend money to save time (e.g., cleaning service)? Do you donate your time instead of money? What else does this phrase mean to you?
Not really. NYC apartments are shoeboxes, so I clean myself every week. When it comes to transport, I would walk or take the train, unless it is late at night or heavy downpour.
What are your favorite resources for personal finance?
A few years ago, I read a lot about personal finance, but they all seemed to say the same basic things, or seem to overcomplicate or sensationalize certain things. So now, I just keep things simple.
What advice would you give your younger self about personal finance?
Think long term. It is harder now as compared to our parents’ lifetimes to own a house and raise kids, and if I could change anything, I should have saved more in my 20s when the savings account interest rate was 7–9% as compared to the less than 1–2% it is now. Also, medical expenses seem to be increasing every year past 30 years old … it’s one reason I am not sure if I want to be in NYC forever.
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wow which biglaw firm has insurance premiums that low for attorneys? i’m at my third firm and it’s always been at least $350 for even a high deductible plan
Mine’s about $70 per month for the high deductible plan and I’m not biglaw but close to it (I think we’re Amlaw 100 now? Definitely 200)
I always thought anything in the AmLaw 100 was big law. It was 5+ years ago now but my premiums were similar at an AmLaw 50ish firm.
OP, you weren’t missing out on years of possible FSA savings. The law changed only changed in 2020 to allow OTC meds and tampons/pads as valid expenses. It was part of one of the covid relief bills.
You were done with law school at 23? So done with college at 20? I assume that’s a combination of AP credits and a heavy course load? Just curious, college is a ways off for my oldest but I think trying to graduate in three years would be ideal.
Just realized I missed the part that you did law school overseas – still really curious about your timeline.
Not the OP, but I’m in the UK where law is a three year undergraduate degree. In the past you then did a 6m – 1 year “legal practicing certificate” and two years on the job training as a (well paid) legal trainee before being fully qualified.
Not OP, but I graduated law school in the US at 23. For me it was a combination of AP credits and picking a major that didn’t have a ton of required classes (history). I even got a minor in my three years at undergrad, but I don’t think my course load was particularly heavy (3–5 classes per quarter). It helps that my birthday falls after the school year ends :)
I’m in the US but my former law firm had an associate who summered there at 20 and joined us full time at 21. She was somewhat of a child prodigy who’d gone to college at 16 with a bunch of AP and community college classes and so she graduated at 18 and then did law school.
23 isn’t that weird. As noted above, if you have a summer (or early fall, depending on school cutoffs) birthday it’s basically only one year accelerated. Many people do college in 3 years instead of 4.
OP, any chance you could share your travel blog? Would love to follow along!
Hi Op, we took a similar career path! After about a decade in Big Law, I “retired” from law in my 30s for a writing career, and I also have a hobby travel blog. My day job isn’t travel related, but when my kids are grown I’d love to lean into it and try harder to make travel writing my career or at least get some fun sponsored trips out of it.
I found this one interesting but a bit odd. Seems like it’s Big Law or bust, when really so much can be done with a law degree. Odd that the person got into law with the thought of not doing it for that long….also $200 a month on groceries in NYC is wild!! And $200 a year to charity could be bumped up, at least for the tax break, if not to help your community or a cause you care about. Also not sure how only $100k saved when half of the $400k salary goes into it annually,,.this person could have a million saved in 5 years!
You lose a lot to taxes on a salary that high. Also doesn’t sound like her overall saving rate has always been this high. She said she had 100k in retirement (that she started contributing to late) and 200k in other savings. Makes sense to me.