Money Snapshot: A Biglaw Associate Shares Her Thoughts on Saving for a Down Payment, Paying off Student Loans, and Spending Responsibly

Money Snapshot: A Biglaw Associate Shares Her Thoughts on Saving for a Down Payment, Paying off Student Loans, and Spending Responsibly

For today’s Money Snapshot, we’re talking salary, net worth, and avoiding “lifestyle inflation” with a reader in NYC who works as a Biglaw associate. She notes, “We are currently saving for a down payment. Although we could qualify for a larger loan, we plan to put down between 25 and 30 percent. We plan to have a 30-year mortgage but make at least three extra payments each year to pay it off early.”

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.

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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

Location: Manhattan
Age: 30 
Occupation: BigLaw associate; went to law school immediately after college 
Income: $305,000 base plus expected bonus of $90,000
Household income: Approximately $500,000
Partner’s age:
Net worth: My husband’s and my net worth is approximately $750,000.
Net worth when started working: Net worth when I started as an associate in BigLaw at 25 was approximately negative $210,000 from student loans. I worked part time during the school year and full time during summers starting in high school.


What does your debt picture look like?
$0 — we aggressively paid off my student loans, which were approximately $210,000 when I graduated law school. We carry no credit card debt but put everything on credit cards for points and are pretty into figuring out how to maximize our points, which we use to fund vacations.

How did you pay for school?
My husband had no student loans because his parents paid for his college education. My education was paid for with a combination of scholarships, grant money, working, loans and approximately $10,000 paid for by my parents for college. I attended a public college for undergrad and a private law school.

Have you paid off any major debt? Please share a success story if you have one!
Yes. Student loans all paid off. We budgeted so we could make 1.5x the required monthly payments when starting, and any “extra” cash from raises/bonuses went straight to paying down loans. I refinanced twice to get a better interest rate. We also set our 401(k) contributions very high so we max out early in the year and get a “fake raise” once we’ve maxed out our contributions. That all went to paying down loans and now goes to our savings account for our down payment.

Savings, Investments & Retirement

How much do you save for retirement?
We each max out our 401(k)s. We also max out our IRAs (we don’t qualify for Roth IRAs) each January.

How much money do you allocate to other tax-savvy investments/accounts?
We contribute $10,000 each year to our child’s 529 and plan to do so for future children as well. We plan to stop contributing when the child is about 10 and then funding any extra expenses from cash when the time comes.

How much do you save outside of retirement accounts?
Varies each year. My husband’s entire salary goes directly to a high-yield savings account. His compensation is a combination of salary, commissions, and bonus with the bulk (about 60%) coming from commissions/bonus, so that’s variable. We also transfer any money in our checking account over a floor about a week after I am paid. I pay all our bills twice a month a day or two after my paycheck clears. Once those bills have been processed, I transfer all leftover money to the high yield account.

Do you have/use a financial adviser or planner?  
We do not. I wish we could find a good one, but we haven’t found someone that fits our needs.

Do you have an end goal for saving or are you just saving for a rainy day?
We are currently saving for a down payment. Although we could qualify for a larger loan, we plan to put down between 25 and 30 percent. We plan to have a 30-year mortgage but make at least three extra payments each year to pay it off early.

What’s the #1 thing you’re doing to save money, limit spending, or live frugally?
We attempt to limit lifestyle inflation. I met my husband when I was in law school making negative money (accruing debt) and my husband was making about half of his current salary. We live in a nicer apartment now but our “entertainment” spending hasn’t changed much. We still book vacations on points, chase happy hour specials, use Groupons for splurges, and love dive bars.

When did you start saving seriously? How has your savings strategy changed over the years?
As soon as my student loans were paid off.

Do you have an estate plan? A trust?
We do not but probably should. It’s embarrassing as a lawyer to admit that we don’t have wills (they are in process but not finalized).

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 where do you keep it?
We don’t separate out the emergency fund, but we could use the entire $300,000, which is our current down payment fund, in an emergency. Once we stop saving for a house, I’d like to have somewhere between $50,000 and $75,000 readily available.

How much do you have in retirement savings?
About $300,000 (combined funds)

How much $ do you have in long-term investments and savings (CDs, index funds, stocks) that are not behind a retirement wall?
Around $15,000


How much do you spend on the following categories on a monthly basis?

Groceries: $550
Restaurants, bars, takeout, and delivery:
Clothing and accessories: $200 — I’ve been trying to shop less and buy higher quality items. I’d say we spend about $2,500/year on my husband/myself. Our baby has a billion clothes that were gifts so we don’t currently spend much there.
Transportation: $35, maybe? We both walk to work.
Rent/living expenses: $5,000
Kid-related expenses: $3,600 (full-time daycare plus occasional night nanny)
Entertainment: Cable (we love sports so can’t cut the cord yet) about $160, Netflix $10, occasional book purchase is $10 but I usually borrow ebooks from the library, Pandora without commercials $5, random tickets/events $100.
Other major expenses: We pay about $10,000/year for our club, which also serves as our gym. We spend about $700/year on insurance but this should be more since we don’t have our life insurance finalized.
Health care — premiums and other costs: $0 — funded entirely through our jobs. Our out-of-pocket expenses for co-pays, etc., tends to be around $1,000 for the entire family each year. 

What’s your spending range for these things? What’s your average?

Vacations – Average: Usually $0. We book almost exclusively using credit card points and airline/hotel points from work travel unless we find a very good deal.

Charity – Range of donations: Annual contributions usually total between $8,000 and $10,000. We have considered trying bunching donations given the change in tax law but have not yet done so.
Charity – Average donation: We give between $500–$2,000 to a few different charities each year. We donate between $100–$300 for individual fundraisers that pop up, such as Cycle for Survival.

Individual items of clothing – Range: $75–$200, although trying to up this to buy more quality items and get away from fast fashion.

Apartment or house – Current main residence: $5,000 rent

How much do/did you spend for childcare and/or education?
Approximately $3,600 — full-time daycare plus occasional night nanny during the week when my husband and I both work late/one of us is traveling. 

Any other large personal expenses? 
We pay a cleaning service to come every other week ($175 including tip). I get a monthly facial for $125 including tip. We spent a few hundred dollars each month on formula, diapers, and random kid stuff.

Fill in the blank on this question: I could save _____ if I stopped ______, but I don’t because _______.
I could save a ton of money if I didn’t order everything from Amazon for convenience without comparing costs/quality, but I don’t because I’m busy and don’t have the time or energy!

When was your wedding, how much did it cost (total), and how much did YOU pay? 
Our wedding cost approximately$75,000. Our parents contributed about half the funds and we paid for the rest. We booked our honeymoon on points. We just wanted to chill at the beach so we went to the cheapest place we could find that had a four-star resort.

How has your family provided financial support in your adult life, if any? (Or, do you provide support to them?)
Yes, my parents paid for a portion of my college education. For a few years after college they also paid my cell phone bill since it would have been like three times more money for me to get off their family plan and onto my own. Shortly before we got married, my husband and I got our own family plan.

Money Strategy

Do you have a general money strategy? 
Avoid lifestyle inflation and bank all raises, bonuses, and other found money like tax returns (although we haven’t had one since I started working full time). I also find I get almost as much joy from planning a vacation or a special meal than the actual thing so I spend a lot of time planning vacations and get a lot of joy from “gaming” out how to go do some thing for the least amount of money/points.

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?
We have a cleaning service. I occasionally send out laundry. As our baby gets older and our income increases I’d like to outsource more.

What are your favorite resources for personal finance (podcasts, blogs, books, series, conferences)?
Boggleheads, BigLaw Investor, Money Diaries, The Financial Diet, Money Under 30

What advice would you give your younger self about personal finance?
Think harder about what the value of something is before choosing to spend/not spend on it. I have a lot of things I think I wasted money on (trendy fashion purchases, for example, that I didn’t like much a year later) and regret not spending on other things (mostly experiences;, for example, I remember not buying tickets to a sporting event a group of friends went to because it seemed too expensive at the time but I really wish I had spent the money by foregoing some other nonessential purchases). Also, buy a gift card to your favorite coffee spot each month, and when it’s gone, it’s gone. I do that now but spent way too many years with an outrageously expensive coffee habit!

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