First Year Associate Budget Forum

[Anonymous User]

Wanted some opinions on my first year budgeting situation:

Making Chicago market (160K). To meet my "kill the debt monkey" goal, I know I need to be contributing about 4K a month. After taxes and aforementioned debt payments, I figure I will there will be just about 60K leftover. I just got a lead on an 2bd/2ba apartment for myself, fiancee, and dog at $2200 with one parking spot, gas, and heat included. It would be a 7 minute walk to work. If I take this, I would have about $34K left to cover all other expenses during the year. Assuming I don't have to worry about wedding costs or a future down payment (this is SOs contribution), is this a fiscally responsible decision or should I try to find something cheaper (moving anywhere else would also require the purchase of an $85 CTA pass)?

[romothesavior]

What about your fiancee? She gonna contribute too?

The other cost to maybe think about is clothes. You might need some suits, shoes, ties, etc.

[Anonymous User]

What about your fiancee? She gonna contribute too?

The other cost to maybe think about is clothes. You might need some suits, shoes, ties, etc.

Shes transitioning careers upon our move so I'm just assuming she won't make a lot (30K is probably safe) so her income will go towards wedding costs ( ) and down payment on an FHA loan (probably 2-3 years out).

Oh and I will be 26 when I start, if that is at all relevant.

[Anonymous User]

Honestly, if I was you (and I was, about a decade ago), I'd probably live somewhere on the north side and not the south loop (I assume that's where you'll be for $2200 for a 2/2 place). It will probably be a wash between rent and cab fare, but there's something to be said for being a little farther away from the office. Go to hipper restaurants, a few baseball games, etc. And most importantly, live somewhere that's not a seven minute walk from work.

(Disregard all of this if you are going to be at Kirkland. Then you want to be really close.)

[Anonymous User]

Honestly, if I was you (and I was, about a decade ago), I'd probably live somewhere on the north side and not the south loop (I assume that's where you'll be for $2200 for a 2/2 place). It will probably be a wash between rent and cab fare, but there's something to be said for being a little farther away from the office. Go to hipper restaurants, a few baseball games, etc. And most importantly, live somewhere that's not a seven minute walk from work.

(Disregard all of this if you are going to be at Kirkland. Then you want to be really close.)

Actually the place I was looking is technically West Loop, but its east of the river.

[Anonymous User]

Honestly, if I was you (and I was, about a decade ago), I'd probably live somewhere on the north side and not the south loop (I assume that's where you'll be for $2200 for a 2/2 place). It will probably be a wash between rent and cab fare, but there's something to be said for being a little farther away from the office. Go to hipper restaurants, a few baseball games, etc. And most importantly, live somewhere that's not a seven minute walk from work.

(Disregard all of this if you are going to be at Kirkland. Then you want to be really close.)

(Not the OP)

I'm going to be at Kirkland; but even if I wasn't, why would you suggest living further from work is a good thing? Longer commute=less free time or less billing time, one or the other.

Plus, the "nice parts" of the north side that have easy access to the L (having to rely on buses for your commute is brutal) are probably going to cost more than the south or west loops.

[Anonymous User]

Honestly, if I was you (and I was, about a decade ago), I'd probably live somewhere on the north side and not the south loop (I assume that's where you'll be for $2200 for a 2/2 place). It will probably be a wash between rent and cab fare, but there's something to be said for being a little farther away from the office. Go to hipper restaurants, a few baseball games, etc. And most importantly, live somewhere that's not a seven minute walk from work.

(Disregard all of this if you are going to be at Kirkland. Then you want to be really close.)

(Not the OP)

I'm going to be at Kirkland; but even if I wasn't, why would you suggest living further from work is a good thing? Longer commute=less free time or less billing time, one or the other.

Plus, the "nice parts" of the north side that have easy access to the L (having to rely on buses for your commute is brutal) are probably going to cost more than the south or west loops.

OP here: Exactly. Lincoln Park is great, but unless you want to live on DePaul's campus it seems like its 30-35 minutes to the Loop. If I can save an hour a day commuting AND buying a mass transit card every month, that seems pretty significant to me. I just want to know if leaving myself with 34K for basically everything besides rent, taxes, and loans is a sound plan.

[ToTransferOrNot]

Honestly, if I was you (and I was, about a decade ago), I'd probably live somewhere on the north side and not the south loop (I assume that's where you'll be for $2200 for a 2/2 place). It will probably be a wash between rent and cab fare, but there's something to be said for being a little farther away from the office. Go to hipper restaurants, a few baseball games, etc. And most importantly, live somewhere that's not a seven minute walk from work.

(Disregard all of this if you are going to be at Kirkland. Then you want to be really close.)

(Not the OP)

I'm going to be at Kirkland; but even if I wasn't, why would you suggest living further from work is a good thing? Longer commute=less free time or less billing time, one or the other.

Plus, the "nice parts" of the north side that have easy access to the L (having to rely on buses for your commute is brutal) are probably going to cost more than the south or west loops.

OP here: Exactly. Lincoln Park is great, but unless you want to live on DePaul's campus it seems like its 30-35 minutes to the Loop. If I can save an hour a day commuting AND buying a mass transit card every month, that seems pretty significant to me. I just want to know if leaving myself with 34K for basically everything besides rent, taxes, and loans is a sound plan.

Keep in mind that you'll probably be eating out a fair amount, and you do having the "costs of having the job" (clothes, dry cleaning, etc.). That said, your budget looks about the same as the one I've set up for myself (except that my SO is a student so no money, so we'll be getting a one-bedroom instead of a two-bedroom, which will put us in the $1800 range). Which leads me to ask: Do you really need a two-bedroom? My SO is working on her dissertation--largely from home--and she still doesn't see the need to have a home office (though it would certainly be nice).

And do you really need a car? I don't see the need for the added cost (parking alone is probably adding over $100/month to your rent). Then insurance, etc. I've lived in Chicago for three years without a car with no problem (and I grew up in Wisconsin, so it's not that I was used to not having a car before moving here). I only miss it when I want to go to the suburbs (dealing with the train can be a PITA) or want to go grocery shopping. Peapod handles the large grocery orders, local groceries handle the day-to-day stuff, and you still end up far ahead of car ownership.

[desertlaw]

Honestly, if I was you (and I was, about a decade ago), I'd probably live somewhere on the north side and not the south loop (I assume that's where you'll be for $2200 for a 2/2 place). It will probably be a wash between rent and cab fare, but there's something to be said for being a little farther away from the office. Go to hipper restaurants, a few baseball games, etc. And most importantly, live somewhere that's not a seven minute walk from work.

(Disregard all of this if you are going to be at Kirkland. Then you want to be really close.)

(Not the OP)

I'm going to be at Kirkland; but even if I wasn't, why would you suggest living further from work is a good thing? Longer commute=less free time or less billing time, one or the other.

Plus, the "nice parts" of the north side that have easy access to the L (having to rely on buses for your commute is brutal) are probably going to cost more than the south or west loops.

OP here: Exactly. Lincoln Park is great, but unless you want to live on DePaul's campus it seems like its 30-35 minutes to the Loop. If I can save an hour a day commuting AND buying a mass transit card every month, that seems pretty significant to me. I just want to know if leaving myself with 34K for basically everything besides rent, taxes, and loans is a sound plan.

Keep in mind that you'll probably be eating out a fair amount, and you do having the "costs of having the job" (clothes, dry cleaning, etc.). That said, your budget looks about the same as the one I've set up for myself (except that my SO is a student so no money, so we'll be getting a one-bedroom instead of a two-bedroom, which will put us in the $1800 range). Which leads me to ask: Do you really need a two-bedroom? My SO is working on her dissertation--largely from home--and she still doesn't see the need to have a home office (though it would certainly be nice).

And do you really need a car? I don't see the need for the added cost (parking alone is probably adding over $100/month to your rent). Then insurance, etc. I've lived in Chicago for three years without a car with no problem (and I grew up in Wisconsin, so it's not that I was used to not having a car before moving here). I only miss it when I want to go to the suburbs (dealing with the train can be a PITA) or want to go grocery shopping. Peapod handles the large grocery orders, local groceries handle the day-to-day stuff, and you still end up far ahead of car ownership.

If you're serious about debt killing, you want to see other threads that have discussed this ad nauseam. Let's not turn this thread into that, but there's an argument to be made about wanting to have some money in savings in case shit hits the fan with work and you're Lathamed. You'll want cash then, not just no debt.

That being said, you should be able to choose between the car and the 2nd bedroom. Having both seems like a bit much, but so does having neither. So choose one - the extra bedroom or the car - and then use that money to save, keep for emergencies. And see if your fiancee can help out with even a 20-hour minimum wage job or something that can bring in like $400-500/month. Even that will be a big help.

"You know what they say, mo money mo problems." - Michael Gary Scott

[ajax]

That being said, you should be able to choose between the car and the 2nd bedroom. Having both seems like a bit much, but so does having neither. So choose one - the extra bedroom or the car - and then use that money to save, keep for emergencies. And see if your fiancee can help out with even a 20-hour minimum wage job or something that can bring in like $400-500/month. Even that will be a big help.

"You know what they say, mo money mo problems." - Michael Gary Scott[/quote]

This last part about your fiancee getting a minimum wage job is poor advice if you're going to be getting married this year. Because you'll be making so much, and she so little, you'll end up owing most of her wages in Federal Income Tax. If she doesn't work, you can claim her as a dependent. I would recommend she find a solid paying full time job, go back to school, or find a gig where she can get paid in cash.

[desertlaw]

That being said, you should be able to choose between the car and the 2nd bedroom. Having both seems like a bit much, but so does having neither. So choose one - the extra bedroom or the car - and then use that money to save, keep for emergencies. And see if your fiancee can help out with even a 20-hour minimum wage job or something that can bring in like $400-500/month. Even that will be a big help.

"You know what they say, mo money mo problems." - Michael Gary Scott

This last part about your fiancee getting a minimum wage job is poor advice if you're going to be getting married this year. Because you'll be making so much, and she so little, you'll end up owing most of her wages in Federal Income Tax. If she doesn't work, you can claim her as a dependent. I would recommend she find a solid paying full time job, go back to school, or find a gig where she can get paid in cash.[/quote]

That sounds better. I still stand by the Michael Scott quote though

[ToTransferOrNot]

That being said, you should be able to choose between the car and the 2nd bedroom. Having both seems like a bit much, but so does having neither. So choose one - the extra bedroom or the car - and then use that money to save, keep for emergencies. And see if your fiancee can help out with even a 20-hour minimum wage job or something that can bring in like $400-500/month. Even that will be a big help.

"You know what they say, mo money mo problems." - Michael Gary Scott

This last part about your fiancee getting a minimum wage job is poor advice if you're going to be getting married this year. Because you'll be making so much, and she so little, you'll end up owing most of her wages in Federal Income Tax. If she doesn't work, you can claim her as a dependent. I would recommend she find a solid paying full time job, go back to school, or find a gig where she can get paid in cash.[/quote]

So you would recommend that a lawyer commit tax fraud by not declaring the paid-in-cash wages, eh?

It never "costs money to work" (unless you're considering child care and so on); all the taxes can do are lower the benefit. That said, it wouldn't make sense for someone writing a dissertation to take a crap job for an entirely different reason: If you're actually going to be employable when you're done, it makes more sense to finish the PhD and get on the job market more quickly, or to spend the extra time writing secondary articles that will help the job search.

[mirodh]

That being said, you should be able to choose between the car and the 2nd bedroom. Having both seems like a bit much, but so does having neither. So choose one - the extra bedroom or the car - and then use that money to save, keep for emergencies. And see if your fiancee can help out with even a 20-hour minimum wage job or something that can bring in like $400-500/month. Even that will be a big help.

"You know what they say, mo money mo problems." - Michael Gary Scott

This last part about your fiancee getting a minimum wage job is poor advice if you're going to be getting married this year. Because you'll be making so much, and she so little, you'll end up owing most of her wages in Federal Income Tax. If she doesn't work, you can claim her as a dependent. I would recommend she find a solid paying full time job, go back to school, or find a gig where she can get paid in cash.

So you would recommend that a lawyer commit tax fraud by not declaring the paid-in-cash wages, eh?

It never "costs money to work" (unless you're considering child care and so on); all the taxes can do are lower the benefit. That said, it wouldn't make sense for someone writing a dissertation to take a crap job for an entirely different reason: If you're actually going to be employable when you're done, it makes more sense to finish the PhD and get on the job market more quickly, or to spend the extra time writing secondary articles that will help the job search.[/quote]

So wait, can we flush this out a little bit more? If your spouse doesn't work you can claim them as a dependent? How much of a tax credit is this? And how would it compare to her making 20-30kish taxed at big-law marginal rate?

[imchuckbass58]

I think you can easily live on $34k/year (ex-rent), but I also think there are a number of unnecessary expenses you have, as people have pointed out.

Ditch the car, get a zipcar membership for the rare instances when you need to drive ($60/year annual fee, plus roughly $10/hour or $80/day with gas and insurance included).

Also maybe this is the New Yorker in me talking, but I question whether you really need a 2BR/2BA for just you and your fiancee (assuming no kid), especially since you will rarely be home during the day. A large one bedroom is probably just as good and will save you a few hundred bucks on rent.

Keep in mind I'm not saying you should live frugally to save money, I'm saying that you'll hardly even notice not having a car or not having a 2BR apartment your first year when you're working a lot. So why not save the money.

[Anonymous User]

I'd honestly go a LOT cheaper than what you're doing. Get something in the $1000 per month range for a few years, get those loans taken out early, and build yourself some savings right off the bat. Just my 2 cents.

[romothesavior]

I'd honestly go a LOT cheaper than what you're doing. Get something in the $1000 per month range for a few years, get those loans taken out early, and build yourself some savings right off the bat. Just my 2 cents.

Living in Chicago at $1,000/mo rent would generally require 1) a very small apartment, which is not ideal for a married couple, or 2) an undesirable neighborhood. OP could go cheaper, but $1,000 a month? Come on, that isn't very realistic for two people.

[Anonymous User]

I'd honestly go a LOT cheaper than what you're doing. Get something in the $1000 per month range for a few years, get those loans taken out early, and build yourself some savings right off the bat. Just my 2 cents.

Living in Chicago at $1,000/mo rent would generally require 1) a very small apartment, which is not ideal for a married couple, or 2) an undesirable neighborhood. OP could go cheaper, but $1,000 a month? Come on, that isn't very realistic for two people.

I don't know man, I lived in NYC for $750 a month and had plenty of space. Just a matter of accepting a long commute.

[MBZags]

I'd honestly go a LOT cheaper than what you're doing. Get something in the $1000 per month range for a few years, get those loans taken out early, and build yourself some savings right off the bat. Just my 2 cents.

Living in Chicago at $1,000/mo rent would generally require 1) a very small apartment, which is not ideal for a married couple, or 2) an undesirable neighborhood. OP could go cheaper, but $1,000 a month? Come on, that isn't very realistic for two people.

I don't know man, I lived in NYC for $750 a month and had plenty of space. Just a matter of accepting a long commute.

Where in NYC?

[Anonymous User]

I'd honestly go a LOT cheaper than what you're doing. Get something in the $1000 per month range for a few years, get those loans taken out early, and build yourself some savings right off the bat. Just my 2 cents.

Living in Chicago at $1,000/mo rent would generally require 1) a very small apartment, which is not ideal for a married couple, or 2) an undesirable neighborhood. OP could go cheaper, but $1,000 a month? Come on, that isn't very realistic for two people.

I don't know man, I lived in NYC for $750 a month and had plenty of space. Just a matter of accepting a long commute.

Where in NYC?

Astoria, Queens. 15 minute walk to the subway, then 45 minutes on the subway to lower Manhattan. But to me, it was worth it.

I also know you can get sub $800 apartments in bay Ridge, Brooklyn. But that's a good hour from the city on subway.

Not too bad though, let's you catch up on your reading.

[Anonymous User]

I'd honestly go a LOT cheaper than what you're doing. Get something in the $1000 per month range for a few years, get those loans taken out early, and build yourself some savings right off the bat. Just my 2 cents.

Living in Chicago at $1,000/mo rent would generally require 1) a very small apartment, which is not ideal for a married couple, or 2) an undesirable neighborhood. OP could go cheaper, but $1,000 a month? Come on, that isn't very realistic for two people.

I don't know man, I lived in NYC for $750 a month and had plenty of space. Just a matter of accepting a long commute.

I live in a tiny studio in Chicago and it takes me a half hour by bus to get downtown. After utilities/cable/internet my rent is ~$1,000. More than an hour commute a day as a first year associate seems unreasonably taxing considering already long hours.

I guess you could try to find a place in the ‘burbs along a metra stop, but then anytime you want to get downtown is a pain in the ass. Weekend metra schedule sucks, and it doesn’t go super late on week nights.

Just bite the bullet, spend ~$1,200 on a 1BR on the north side, and don’t worry about needing a car/parking space.

[bk1]

I don't know man, I lived in NYC for $750 a month and had plenty of space. Just a matter of accepting a long commute...

Not too bad though, let's you catch up on your reading.

I think this is personal. I mean as a biglaw associate you don't have a ton of free time. Do you really want to spend 2 hours of every day commuting when it is feasible to save that time?

I had a 75 minute commute (each way) prior to law school and don't think I will ever voluntarily go back to that even if it meant saving a decent chunk of money. Though I get motion sick on cars/trains and can't really read or do much of anything during a commute.

[romothesavior]

I'd honestly go a LOT cheaper than what you're doing. Get something in the $1000 per month range for a few years, get those loans taken out early, and build yourself some savings right off the bat. Just my 2 cents.

Living in Chicago at $1,000/mo rent would generally require 1) a very small apartment, which is not ideal for a married couple, or 2) an undesirable neighborhood. OP could go cheaper, but $1,000 a month? Come on, that isn't very realistic for two people.

I don't know man, I lived in NYC for $750 a month and had plenty of space. Just a matter of accepting a long commute.

I can tell you right now, no way do I want an hour commute both ways while I'm living with my SO, particularly when I'm already working very long hours at the office. When I said "undesirable neighborhood," I was including both crime as well as undesirable-ness in terms of location. Having an hour or more commute on public transportation is going to be undesirable to most people I know.

Additionally, it is one thing to have a small 1BR when you're by yourself, it is another to have another person with all their personal belongings and have a 1BR. I don't know OP's background, but for a Midwesterner like me, my conception of "plenty of space" is different than a New Yorker's.

After I posted that, I knew someone would immediately pop up and say, "No it is possible... I had an apartment for super cheap in Chicago/NYC/D.C." Yes, it is probably doable, but not without making significant concessions in living space and lifestyles. Of course, now someone will probably respond to this telling us about their massive suite on Michigan Avenue for $500 a month or something. These threads always devolve into chest thumping about thriftiness in living situation.

[Anonymous User]

Certainly didn't mean my post to be a chest bumping exercise.

At the end of the day, all of these questions are personal preference. To me, I enjoy a long commute as crazy as that sounds. Allows an opportunity to catch one's breath and unwind.