Budgeting 160K for newbs

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Anonymous User
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Re: Budgeting 160K for newbs

Postby Anonymous User » Mon Oct 21, 2013 7:33 pm

Still a bit more reassuring. Thanks.

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Re: Budgeting 160K for newbs

Postby Anonymous User » Mon Oct 21, 2013 8:55 pm

Anonymous User wrote:Still a bit more reassuring. Thanks.


It'll get better, too - bonus and tax refund are coming. You don't earn $170K your first 12 months - you work a few stub months, get a small bonus if any bonus, get a juicy tax refund in February because your total income for the stub year was low, then work a full calendar year at 160K before getting hopefully a healthy bonus and a decent refund the following February depending on your state and filing status.

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Big Shrimpin
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Re: Budgeting 160K for newbs

Postby Big Shrimpin » Mon Oct 21, 2013 11:39 pm

Newly minted 2nd year MFH biglaw. Here's my budget:

3.5k/mo loans (graduated with like 185K)
2.2k/mo in rent/utilities/cable (split with roommate)

I spend about 400/wk on going out, random stuff, etc.

This has worked, and I've managed to save around 10k so far (helped with a fat stub year tax refund because I started paying my loans almost as soon as I started work).

MFH is a killer on rent/social stuff. But it's just so much fucking fun living here.

dixiecupdrinking
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Re: Budgeting 160K for newbs

Postby dixiecupdrinking » Tue Oct 22, 2013 7:55 am

$7000 take home/month seems a little conservative to me, too. Isn't it more like $8000?

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thesealocust
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Re: Budgeting 160K for newbs

Postby thesealocust » Tue Oct 22, 2013 8:13 am

dixiecupdrinking wrote:$7000 take home/month seems a little conservative to me, too. Isn't it more like $8000?


It would be about 8K take home before factoring in tax returns or benefits. Insurance policies, commuter benefits, 401(k) contributions, gym memberships, paying back salary advances, etc. will reduce the size of the check.

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Big Shrimpin
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Re: Budgeting 160K for newbs

Postby Big Shrimpin » Tue Oct 22, 2013 8:16 am

thesealocust wrote:
dixiecupdrinking wrote:$7000 take home/month seems a little conservative to me, too. Isn't it more like $8000?


It would be about 8K take home before factoring in tax returns or benefits. Insurance policies, commuter benefits, 401(k) contributions, gym memberships, paying back salary advances, etc. will reduce the size of the check.


This is all TCR. I have bangarang insurance (health, dental, eyes, etc. - I don't fuck with this because I went uninsured for years), pay 112/mo for the subway, 80/mo for gym membership, etc.

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guano
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Re: Budgeting 160K for newbs

Postby guano » Tue Oct 22, 2013 8:52 am

Anonymous User wrote:
guano wrote:
Anonymous User wrote:How quickly can I pay off ~$45k in debt in NYC/BigLaw?

Presuming 7k a month in actual take home, 3k a month rent + expenses, maybe 10 months if I pay down aggressively? Thinking maybe find a decent room in Brooklyn for $1-1.5k a month, maybe bring it down to 8-9 months? The calculators are easy to find, but TLS is useful for the anecdotes.

I also may have the option of living at home for free, but I didn't spend three years pretending to give a shit about Torts in order to make six figures to do that.

Aggressively a little over a year.
Realistically closer to two.


If you live at home and don't pay rent maybe 9 months


Math: $7k take home. Minimal living expenses of $1500 per month. $5500 to loans. (9*$5,5k=$50k) so that leaves a little wiggle room

Rent with roommates, utilities & another $1500 leaves $4k/month. 12*$4k=$48k is not quite enough after factoring in interest

Decent apartment and some fun at $3k per month leaves $2500 toward loans. 24*$2.5k=$60k. This is definitely enough to pay your loans, with interest, and still enjoy the good life - though not quite living it up as much as characters on a TV sitcom


Do people agree with this analysis?

Is $1500 is really "minimal" living expenses in NYC? This is $50 a day. I am living alone in NYC right now and eating out (granted, at modest places) every night and still not hitting this ceiling. I already have a professional wardrobe.

I know people on this board may have different expectations of a "BigLaw lifestyle" vs. a college lifestyle or what have you, but there is no way I would spend $3k a month.

I've just tried running the numbers a bunch of times, and don't see how ~$45k isn't manageable within a year, or a year and a few months at worst, if someone is really paying it down aggressively.

-quoted anon

That $1500 includes rent (aggressive, pay loans off within a year). The cheapest shitholes in the outer boroughs are gonna cost at least $500. If you can keep good intake down to $10/day (ha), with an unlimited metro card you're already approaching a grand a month - and haven't yet paid the electric bill. That 's fucking miserable subsistence living right there.

Can it be done? Well, maybe Ghandi could, but I doubt even the most relaxed biglaw dresscode won't allow you to show up for work in a loincloth


Edit: just to clarify, my original post gave 3 scenarios: two based on attempting to repay the loan in a year (minimal and reasonable) and one based on paying off in 2 years (enjoying life)

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KeepitKind
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Re: Budgeting 160K for newbs

Postby KeepitKind » Tue Oct 22, 2013 9:30 am

Big Shrimpin wrote:Newly minted 2nd year MFH biglaw. Here's my budget:

3.5k/mo loans (graduated with like 185K)
2.2k/mo in rent/utilities/cable (split with roommate)

I spend about 400/wk on going out, random stuff, etc.

This has worked, and I've managed to save around 10k so far (helped with a fat stub year tax refund because I started paying my loans almost as soon as I started work).

MFH is a killer on rent/social stuff. But it's just so much fucking fun living here.


Thanks for the candid and helpful info. Does this put you one a 5yr plan to repay your loans? Or do you plan to start repaying more aggresively in the upcoming years? Just curious to hear what's comfortable for you on an nyc budget.

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guano
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Re: Budgeting 160K for newbs

Postby guano » Tue Oct 22, 2013 9:49 am

KeepitKind wrote:
Big Shrimpin wrote:Newly minted 2nd year MFH biglaw. Here's my budget:

3.5k/mo loans (graduated with like 185K)
2.2k/mo in rent/utilities/cable (split with roommate)

I spend about 400/wk on going out, random stuff, etc.

This has worked, and I've managed to save around 10k so far (helped with a fat stub year tax refund because I started paying my loans almost as soon as I started work).

MFH is a killer on rent/social stuff. But it's just so much fucking fun living here.


Thanks for the candid and helpful info. Does this put you one a 5yr plan to repay your loans? Or do you plan to start repaying more aggresively in the upcoming years? Just curious to hear what's comfortable for you on an nyc budget.

At that rate, the loans will be paid off in about 5 years (using back of the envelope math)

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Big Shrimpin
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Re: Budgeting 160K for newbs

Postby Big Shrimpin » Tue Oct 22, 2013 10:20 am

KeepitKind wrote:
Big Shrimpin wrote:Newly minted 2nd year MFH biglaw. Here's my budget:

3.5k/mo loans (graduated with like 185K)
2.2k/mo in rent/utilities/cable (split with roommate)

I spend about 400/wk on going out, random stuff, etc.

This has worked, and I've managed to save around 10k so far (helped with a fat stub year tax refund because I started paying my loans almost as soon as I started work).

MFH is a killer on rent/social stuff. But it's just so much fucking fun living here.


Thanks for the candid and helpful info. Does this put you one a 5yr plan to repay your loans? Or do you plan to start repaying more aggresively in the upcoming years? Just curious to hear what's comfortable for you on an nyc budget.


Depends. Interest rate is a killer. If I don't adjust my payments I'm looking at payoff sometime during the end of my 5th/early 6th year or something. I'm not planning on a house/kids before that (or possibly ever), so I think 5 years is feasible, maybe a bit less as my salary increases. You want to enjoy your money, too. When I get my bonus, I could put it all to loans. But I'm on pace to bill almost 2300 this year and would love to treat myself to a nice vacation/toys (after trial, of course).

I'm honestly flying by the seat of my pants, but it's worked well so far. As long as I don't get shitcanned in year 3/4 I think my plan will work out well.

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ChiefPresidentTaft
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Re: Budgeting 160K for newbs

Postby ChiefPresidentTaft » Tue Oct 22, 2013 10:40 am

Haven't seen any talk here about a Roth 401k. Any notable difference when compared with a Roth IRA? Just started at my firm and it offers both traditional 401k plans and Roth 401k.

I am a complete newb at this, but the Roth 401k has to be the way to go, right? I understand that under the traditional 401k, contributions are made before taxes and interest grows tax free, but you still get hit on the back end as you pay taxes on all of your distributions (but at a presumably lower tax rate during retirement). The Roth seems advantageous to me because I will only be paying taxes on the front end, allowing interest to grow tax free and be distributed tax free. Correct? I'm also relatively young (mid 20s) so my thinking is that my contributions now will have a lenghty amount of time to gain interest.

Am I way off the mark here?

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guano
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Re: Budgeting 160K for newbs

Postby guano » Tue Oct 22, 2013 10:46 am

ChiefPresidentTaft wrote:Haven't seen any talk here about a Roth 401k. Any notable difference when compared with a Roth IRA? Just started at my firm and it offers both traditional 401k plans and Roth 401k.

I am a complete newb at this, but the Roth 401k has to be the way to go, right? I understand that under the traditional 401k, contributions are made before taxes and interest grows tax free, but you still get hit on the back end as you pay taxes on all of your distributions (but at a presumably lower tax rate during retirement). The Roth seems advantageous to me because I will only be paying taxes on the front end, allowing interest to grow tax free and be distributed tax free. Correct? I'm also relatively young (mid 20s) so my thinking is that my contributions now will have a lenghty amount of time to gain interest.

Am I way off the mark here?

Two main considerations on Roth v Traditional:
1) expected tax rate at time of contribution vs time of retirement
2) contribution limits

The tax rate is a big issue. If you'd rather retire early and modestly, Traditional is better. If you can see yourself working into antiquity and building massive unearned income opportunities, your tax rate at retirement will probably be high and a Roth is the way to go.
Tax rates may also change in the future, which is worth considering

I believe contribution limits are the same, but since Roth is with post-tax dollars the practical effect is that you can contribute more. Someone else please correct me if I'm wrong

dixiecupdrinking
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Re: Budgeting 160K for newbs

Postby dixiecupdrinking » Tue Oct 22, 2013 10:47 am

thesealocust wrote:
dixiecupdrinking wrote:$7000 take home/month seems a little conservative to me, too. Isn't it more like $8000?


It would be about 8K take home before factoring in tax returns or benefits. Insurance policies, commuter benefits, 401(k) contributions, gym memberships, paying back salary advances, etc. will reduce the size of the check.

Right. If you're getting gym and metrocard deducted from your check that's a significant boon to your monthly COL elsewhere though. And 401(k) is strictly optional for someone who is in PAY DOWN ALL THE LOANS mode.

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BVest
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Re: Budgeting 160K for newbs

Postby BVest » Tue Oct 22, 2013 11:37 am

Anonymous User wrote:It'll get better, too - bonus and tax refund are coming. You don't earn $170K your first 12 months - you work a few stub months, get a small bonus if any bonus, get a juicy tax refund in February because your total income for the stub year was low, then work a full calendar year at 160K before getting hopefully a healthy bonus and a decent refund the following February depending on your state and filing status.



To reduce the amount of your 0% loan to the feds until February, you can request (in writing) that HR apply the part-year withholding method. If you had a job earlier in the year or had some outside income, you may also want to calculate what your withholding should be and request a specific amount of withholding for each check.

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Re: Budgeting 160K for newbs

Postby Brassica7 » Tue Oct 22, 2013 5:50 pm

I have about 65k in loans at 6.8% and another 30k at 7.9%. I want to pay back all my loans in about three years, but I am considering selecting a 20-year repayment plan. This will allow a lower monthly base payment, and I will put these "savings" to the higher interest loans. This way, I will be able to pay off the higher interest loans very quickly, and thus save money.

Is there a downside to doing this? What about selecting one of those payment plans where the monthly payments start low, then go up?

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guano
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Re: Budgeting 160K for newbs

Postby guano » Tue Oct 22, 2013 5:57 pm

Brassica7 wrote:I have about 65k in loans at 6.8% and another 30k at 7.9%. I want to pay back all my loans in about three years, but I am considering selecting a 20-year repayment plan. This will allow a lower monthly base payment, and I will put these "savings" to the higher interest loans. This way, I will be able to pay off the higher interest loans very quickly, and thus save money.

Is there a downside to doing this? What about selecting one of those payment plans where the monthly payments start low, then go up?

You got the right idea. It's a good plan. Don't do balloon payments.

Edit: someone else may give more details (I'm in a hurry) but the quick answer is that you got the right idea

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Re: Budgeting 160K for newbs

Postby Anonymous User » Wed Oct 23, 2013 11:05 am

Brassica7 wrote:I have about 65k in loans at 6.8% and another 30k at 7.9%. I want to pay back all my loans in about three years, but I am considering selecting a 20-year repayment plan. This will allow a lower monthly base payment, and I will put these "savings" to the higher interest loans. This way, I will be able to pay off the higher interest loans very quickly, and thus save money.

Is there a downside to doing this? What about selecting one of those payment plans where the monthly payments start low, then go up?


Has anyone else looked into refinancing with SoFi or one of the other companies? I'm in the process of looking into it right now, and got rates around 6% fixed and 4% variable (pegged to LIBOR). I'm looking to pay off my loans in the next few years, so I'll likely go with the variable rate. Texas big 3, going into my 2nd year, bought a home in January (mortgage rate 3.75%).

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Big Shrimpin
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Re: Budgeting 160K for newbs

Postby Big Shrimpin » Wed Oct 23, 2013 2:03 pm

Anonymous User wrote:
Brassica7 wrote:I have about 65k in loans at 6.8% and another 30k at 7.9%. I want to pay back all my loans in about three years, but I am considering selecting a 20-year repayment plan. This will allow a lower monthly base payment, and I will put these "savings" to the higher interest loans. This way, I will be able to pay off the higher interest loans very quickly, and thus save money.

Is there a downside to doing this? What about selecting one of those payment plans where the monthly payments start low, then go up?


Has anyone else looked into refinancing with SoFi or one of the other companies? I'm in the process of looking into it right now, and got rates around 6% fixed and 4% variable (pegged to LIBOR). I'm looking to pay off my loans in the next few years, so I'll likely go with the variable rate. Texas big 3, going into my 2nd year, bought a home in January (mortgage rate 3.75%).


Looked into it but in that "still waiting" phase I think (it was a while ago). How did they do the breakdown of fixed/variable? I would be hesitant to dedicate a big chuck to variable. But 6% looks real nice.

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Re: Budgeting 160K for newbs

Postby Anonymous User » Wed Oct 23, 2013 10:19 pm

Big Shrimpin wrote:
Anonymous User wrote:
Brassica7 wrote:I have about 65k in loans at 6.8% and another 30k at 7.9%. I want to pay back all my loans in about three years, but I am considering selecting a 20-year repayment plan. This will allow a lower monthly base payment, and I will put these "savings" to the higher interest loans. This way, I will be able to pay off the higher interest loans very quickly, and thus save money.

Is there a downside to doing this? What about selecting one of those payment plans where the monthly payments start low, then go up?


Has anyone else looked into refinancing with SoFi or one of the other companies? I'm in the process of looking into it right now, and got rates around 6% fixed and 4% variable (pegged to LIBOR). I'm looking to pay off my loans in the next few years, so I'll likely go with the variable rate. Texas big 3, going into my 2nd year, bought a home in January (mortgage rate 3.75%).


Looked into it but in that "still waiting" phase I think (it was a while ago). How did they do the breakdown of fixed/variable? I would be hesitant to dedicate a big chuck to variable. But 6% looks real nice.


I filled out all the paperwork and asked for both a fixed and a variable quote. I didn't ask about doing some fixed and some variable, although I imagine they'd be fine with it, since they let you pick whichever of your loans you want to refinance (you don't have to do them all -- I left my small and ridiculously low rate undergrad loans alone). I went with variable since the chances the LIBOR goes up over 2% in the next 2-3 years seemed negligible, but I can see others' hesitance to do that.

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Big Shrimpin
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Re: Budgeting 160K for newbs

Postby Big Shrimpin » Thu Oct 24, 2013 12:52 am

I could've sworn I did some kind if app and they were like okay we'll let you know if anyone wants to loan to ya.

Edit: it appears the site is more developed since I last looked in April. I dunno, I still worry about getting shitcanned and not having the backstop govn't programs like IBR or PAYE or whatever. Is that a valid concern? To be honest I've been so busy at work for the past 6 moths I haven't really had time to do much research about it.

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Re: Budgeting 160K for newbs

Postby Anonymous User » Thu Oct 24, 2013 3:43 pm

Big Shrimpin wrote:I could've sworn I did some kind if app and they were like okay we'll let you know if anyone wants to loan to ya.

Edit: it appears the site is more developed since I last looked in April. I dunno, I still worry about getting shitcanned and not having the backstop govn't programs like IBR or PAYE or whatever. Is that a valid concern? To be honest I've been so busy at work for the past 6 months I haven't really had time to do much research about it.


It's definitely true that you don't have the options for those programs once you refinance. Whether or not it's worth it is totally up to you -- for me (anon above), I am not worried about losing my job in the next few years, and even if I did I don't think I'd use IBR/etc. anyway. Then again, I'm also significantly less risk averse than the average law school grad.

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unc0mm0n1
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Re: Budgeting 160K for newbs

Postby unc0mm0n1 » Thu Oct 24, 2013 5:34 pm

Big Shrimpin wrote:I could've sworn I did some kind if app and they were like okay we'll let you know if anyone wants to loan to ya.

Edit: it appears the site is more developed since I last looked in April. I dunno, I still worry about getting shitcanned and not having the backstop govn't programs like IBR or PAYE or whatever. Is that a valid concern? To be honest I've been so busy at work for the past 6 moths I haven't really had time to do much research about it.


But couldn't you file for bankruptcy? Imean that's not the optimal solution but if all else fails, that would be an option right?

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Re: Budgeting 160K for newbs

Postby dixiecupdrinking » Thu Oct 24, 2013 7:23 pm

unc0mm0n1 wrote:
Big Shrimpin wrote:I could've sworn I did some kind if app and they were like okay we'll let you know if anyone wants to loan to ya.

Edit: it appears the site is more developed since I last looked in April. I dunno, I still worry about getting shitcanned and not having the backstop govn't programs like IBR or PAYE or whatever. Is that a valid concern? To be honest I've been so busy at work for the past 6 moths I haven't really had time to do much research about it.


But couldn't you file for bankruptcy? Imean that's not the optimal solution but if all else fails, that would be an option right?

In general, the answer to whether you can borrow from another source to pay off your student loans and then have it discharged in bankruptcy is "probably not."

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Re: Budgeting 160K for newbs

Postby Anonymous User » Mon Oct 28, 2013 9:17 pm

Do NYC V100s pay for or at least advance broker's fees/security deposits for new associates when it comes to moving/relocation expenses? Or do they literally just mean moving expenses (i.e. hiring a moving company)? What about the ones with "reasonable expenses" standards instead of hard and fast amounts?

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thesealocust
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Re: Budgeting 160K for newbs

Postby thesealocust » Mon Oct 28, 2013 9:25 pm

Most big NYC firms will cover part or all of a broker's fee if you're relocating from out of town, as well as paying for movers and transportation to the city.




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