Budgeting 160K for newbs Forum

[thesealocust]

Making market in nyc with no debt. What % of my earning should I be saving?

After-tax, 10% minimum and 50%+ if you want to be a savings/investment gunner. If you can avoid lifestyle inflation with your first job you can build a sizable nestegg very quickly on a biglaw salary, which will give you a lot of freedom in choices later on.

[unc0mm0n1]

Actually, what do you guys suggest for a credit card? Right now I have a Cash Rewards card with no fees. However, I like to travel. Would I be better served by a miles card? Do you get a decent amount of miles?

Well this depends on how much effort you're willing to put into getting miles. I'm a miles churner so I use a wide variety of cards to get free/reduced travel. But it does take a bit of planning and footwork. Me and Mrs. unc0mm0n are doing a month long post bar trip. We're going to Japan, China, South Korea, HK, Taiwan, Thailand, Philippines, Malaysia and Australia. All the flights are business/First class except for HK to Taiwan (we are actually paying for that one out of pocket) and all are paid for with miles that we've earned over the last year. We also got 18 hotel nights free including two at the Park Hyatt Tokyo and two at the Park Hyatt Sydney which both go for over $700/nt.

Do you mind if I ask you how much money you put on your credit card last year? I don't know that I'd be able to put on all much, but, I am willing to put most things on my credit card and do legwork. Also... sounds like an amazing trip!!!

You'd be surprised how much money you can put on your CC if you're creative. Me and Mrs unc0mm0n combined put about 150k on our CCs last year. That doesn't mean we make 150K. A simple way to get more spend on your CCs is to put everything on them. Even stuff you normally can't pay for with a CC. There are ways around that. We pay our rent, her loans, car insurance, phone bill etc. Secondly, not all spend is created equal. Some cards give you extra miles per dollar spent. This month I get five miles for every dollar spent on Amazon. I get eleven miles for every dollar spent in Kohls. Polo is six miles per dollar. It's a little more complicated once you're trying to get into the six figure spend. I don't really want to talk about it here but a good place to start is Flyertalk.com.

[Tiago Splitter]

Snowpeach a huge portion of miles that churners like me and uncommon1 earn come from sign up bonuses. Even if you don't want to churn just figure out which airline you are most likely to use and sign up for that card. You should get at least 30,000 bonus miles, which is enough for a free ticket, and if you are patient you should be able to find a promotion for at least 50,000 miles from your favorite airline.

[snowpeach06]

One promo free flight? I am on that. But, my landlord won't take a credit card for rent - how did you manage that one?

[Tiago Splitter]

One promo free flight? I am on that. But, my landlord won't take a credit card for rent - how did you manage that one?

You can use Williampaid.com, but they charge 2.95% which I don't think is worth it.

[guano]

If you're not that into travel, cash back is ok, but gets less bang for the buck than company specific cards (united, Disney, etc).
General "rewards" tend to be a bit bait and switch - the points system allows then to upcharge the items they sell (eg $1 per point value , but item costs 25% more than on suggested retail price)

[snowpeach06]

Thanks guys!

[ScottRiqui]

I had State Farm run a quote on my homeowner's insurance and it was almost double what USAA is charging me. A reasonable expectation for that would likely be over $3000.

I used to love USAA and would recommend all my troops get them but they have changed considerably. their credit products are terrible, auto loans are not competitive unless you have a 750+ CS, I saved nearly a $400 per six months by switching to Geico on car insurance and their Cd rates are low. I haven't tried their home insurance but as a whole I think you can do better than USAA for almost everything else.

For car insurance, you should look into switching every two years - or call your provider and ask to be priced as a new applicant (some companies will do this)

For several reasons (mainly marketing) first year rates are significantly lower than for older policies

This is very good idea in the short term if you're just looking to get the insurance "check in the box" for as little money as possible. But there are also benefits for sticking with the same company for a long time, too. There are longevity discounts, "safe driver" discounts, multi-line discounts if you have your home and car insurance with the same company, and when you file a claim or get a speeding ticket, some companies will treat you better if you've been with them for a long time.

I've had State Farm since 1988, and I pay $150/month for full coverage on two cars (100k/300k/100k limits), full coverage on a sportbike, and minimum liability on an old truck that we use infrequently. Over the years, I've had several speeding tickets, and my rates haven't gone up. Same with a couple of comprehensive claims I've filed. They've also paid off generously on claims that they legitimately could have denied, and might have if I had only been with them a very short time.

[unc0mm0n1]

One promo free flight? I am on that. But, my landlord won't take a credit card for rent - how did you manage that one?

You can use Williampaid.com, but they charge 2.95% which I don't think is worth it.

that's crazy I'd never pay that much considering how much I value miles. I pay .79% to pay my rent.

[Tiago Splitter]

One promo free flight? I am on that. But, my landlord won't take a credit card for rent - how did you manage that one?

You can use Williampaid.com, but they charge 2.95% which I don't think is worth it.

that's crazy I'd never pay that much considering how much I value miles. I pay .79% to pay my rent.

any chance you'd share how to pull this off? I'd happily pay .79 cents a mile.

[guano]

I had State Farm run a quote on my homeowner's insurance and it was almost double what USAA is charging me. A reasonable expectation for that would likely be over $3000.

I used to love USAA and would recommend all my troops get them but they have changed considerably. their credit products are terrible, auto loans are not competitive unless you have a 750+ CS, I saved nearly a $400 per six months by switching to Geico on car insurance and their Cd rates are low. I haven't tried their home insurance but as a whole I think you can do better than USAA for almost everything else.

For car insurance, you should look into switching every two years - or call your provider and ask to be priced as a new applicant (some companies will do this)

For several reasons (mainly marketing) first year rates are significantly lower than for older policies

This is very good idea in the short term if you're just looking to get the insurance "check in the box" for as little money as possible. But there are also benefits for sticking with the same company for a long time, too. There are longevity discounts, "safe driver" discounts, multi-line discounts if you have your home and car insurance with the same company, and when you file a claim or get a speeding ticket, some companies will treat you better if you've been with them for a long time.

I've had State Farm since 1988, and I pay $150/month for full coverage on two cars (100k/300k/100k limits), full coverage on a sportbike, and minimum liability on an old truck that we use infrequently. Over the years, I've had several speeding tickets, and my rates haven't gone up. Same with a couple of comprehensive claims I've filed. They've also paid off generously on claims that they legitimately could have denied, and might have if I had only been with them a very short time.

That's not bad. Have you recently gotten quotes from competitors? Just because rates haven't gone up, doesn't mean you're still getting a good deal - maybe the actuarial a have changed in your favor? An insurance company is under no obligation to inform you that you qualify for better rates.

Don't get me wrong. I'm not advocating switching every few years. What I'm advocating is repricing every few years - look what other insurers would charge you for the same coverage. There's a reason companies advertise "15 minutes could save you 15%"

[unc0mm0n1]

.

[kalvano]

Texas sucks so bad for insurance. Fuck Rick Perry. I'm actually not sure the deregulation and cozying up happened on his watch, but fuck him anyway.

[Anonymous User]

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.

[guano]

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

[Anonymous User]

OK, good to know. Thanks. Maybe I can cut back on expenses during 3L and get it down by $5-10k.

Is it true that if you return a portion of a loan within 120 days of disbursement, you don't pay interest/fees on that portion? I think our Financial Aid office said something like this. Might look into it once I see where I am in December.

-12:44 am.

edit: I also had another question: for firms that paid stub bonuses to first years, how did they calculate eligibility? Do they just divide 2000 hours by however long you've actually been there and see whether you're on track to bill that?

[run26.2]

I think they generally don't count hours for bonus purposes. They prorate it by the amount of time you've been there.

[thesealocust]

I think they generally don't count hours for bonus purposes. They prorate it by the amount of time you've been there.

^ exactly.

Basically no firm cares about stub year hours, and some even have explicitly longer periods where your hours really don't count. You're useless and dumb and squishy and will spend a lot of time running into walls and peeing yourself when you start the job.

Or doing doc review? I have no idea what litigation is, but I imagine it's just 8 years of doc review then they make you a partner or fire you

[run26.2]

Additionally, I think they probably do it because it takes some time to get significant billable hours at a biglaw firm. Many associates would have no hope of meeting the threshold in a stub year. Even if they did, it would be arbitrary, based less on the associate's desire to work and more on being put on the right case (because, let's face it, most 1st years are still eager to do work).

Actually, I think most people graduate out of doc review by their 2nd year. And as rates increase, that type of work is increasingly farmed out to firms that specialize in it because clients don't want to pay biglaw rates for doc review.

[Anonymous User]

So assuming you start in October, that's an extra $2500, regardless of what you bill? Unlike everything else in BigLaw, that doesn't sound like a bad deal. Guess I just have to hope Cravath does that again next year and my firm decides to match.

[thesealocust]

So assuming you start in October, that's an extra $2500, regardless of what you bill? Unlike everything else in BigLaw, that doesn't sound like a bad deal. Guess I just have to hope Cravath does that again next year and my firm decides to match.

Not all firms give stub year bonuses, and plenty of firms only sometimes give stub year bonuses. But yes.

Also, I wouldn't be totally shocked to see bonuses rise this year.

[redsox550]

excuse my ignorance. when does stub year end?

[run26.2]

Stub year ends January 1.

[Anonymous User]

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

[Anonymous User]

I've saved or paid down ~$52,000 from my first 12 months employed in NYC biglaw. Monthly expenses in the neighborhood of 3.0 to 3.5K per month, all in.

Some of that is 401(k) contribution though, which is kind of "cheating" to compare to paying down debt, since it comes from pre-tax dollars.