daisyduck wrote:As for maintaining a frugal lifestyle while working BigLaw:
I'm not a biglaw associate yet, so I can't say for sure (as none of us 0Ls can) but I don't think I'll have a problem parting with the herd of lavish spenders of the BigLaw world. They spend too much anyway. Just because you make more doesn't mean you have to increase your expenses. I understand there will be unavoidable costs like getting new suits, socializing with colleagues and clients, like someone said or gifts for friends and family, but the largest chunk of your expenses will be rent and taxes (esp in nyc, where i plan to work). Living in a cheap apt and not buying a fancy new car as most new yuppies do are the main ways to reduce spending without "being anti-social and weird."
As for loan repayment calculation:
Extremely generally and simply speaking for the sake of the 'big picture', if i pay back about $5500 a month for three years, that amounts to about 200K. Even with a high effective APR, that is about how much my debt will be after graduation.
Now, with a salary of 160K+bonus (which is of course subject to reduction, ITE. but big pic guys, big pic), even after various taxes of say 40%, you will still see 8K/mo. That means I have $2,500 to cover rent, utilities, food, clothes and other expenses. I can't speak for anyone else but that is enough for me. I currently live on less than that as a recent graduate in a major east coast city, and still manage to save a couple hundred bucks a month.
So... I think it's certainly doable. Of course, I'm not going to pay exactly $5,500 every month. There will be lots of unexpected costs like say medical expenses, unexpected travel + million other things that always creep up, but if I put all extra dollars into repayments (CitiAssist Law Loan doesn't penalize you for prepayments, and reduces your interest rate by .25% if you do automatic repayments), I CAN DO IT! HOORAHHH!
I say all the more power to you, and agree that it can be done.
A couple words of caution though:
-Biglaw is getting harder and harder to get. About a third of NYU has been deferred for a year, and 2L OCI is shaping up to be a massacre from what I hear, even at T6s (my 1L friend at Columbia said consensus seems to be you need to be top 50% to be safe, rather than top 80% in past years). Do not know where you are going, but this is something to take into account.
-It is entirely possible (likely?) by the time we graduate that market rate in New York will be $145,000, with a much lower bonus than in past years. Some firms are already there.
-I do not know if you live in New York or another city, but I cannot emphasize enough that New York is really, really, really expensive to live in. From having lived elsewhere, easily twice as expensive anywhere else in the country I've been except perhaps San Fran. If you're trying to live on $2,500 per month, you simply will not be able to live in manhattan below 96th street (and thus will have a 30+ minute commute to work). The average one bedroom in manhattan (all of it, including harlem and washington heights) rents for $3,000 (post real estate bubble). NYU dorms go for 1,600, and they're literally tiny dorm rooms subsidized by the university.
I think it's a good thing to aspire to pay off your loans in three years, but I would not count on it. That is, you shouldn't put yourself in a situation where if something came up, you'd be screwed with a longer repayment period.