Anyone manage to save their SA money? Forum

[ughbugchugplug]

I'm starting an SA in two weeks and I want to save what I earn over the summer to use as a down payment for a small house next year. Anyone manage to do this in the NYC area? Advice?

[deepseapartners]

Even if you aggressively save, you'll only have about $20k by the end of the summer. What house in the NYC area are you going to purchase with that small of a down payment?

[A. Nony Mouse]

I think they mean the SA is in NYC, not necessarily that the house would be in NYC?

[Avian]

I ended up using most of it to avoid taking on more loans, but I would say I had a little over $20k left over after taxes and living expenses. You'd really have to be trying to run through ~$25K in the course of a single summer.

[ughbugchugplug]

Thanks for the advice everyone

Just to clarify - I'm planning on buying a small starter home in the north jersey area - they run around 200-300k. I also have significant loans, but the idea is that paying a mortgage can sometimes be cheaper than renting due to the income tax write off.

So I should assume around 20k? I'll be working 11 weeks at the normal biglaw pay

[ballouttacontrol]

You'd have to be buying some seriously expensive stuff to run through 3k a week when you're at firm events 6 days a week multiple nights a week of the firm picking up your bar tab, paying for both lunches and dinners, etc... I balled like crazy just living it up as much as I possibly could, dropped a few grand in Vegas several hundred dollar bar tabs multiple times a week super luxury sublet.... And still came out with like $11k or something

Edit, responding to above, u could probably get by spending virtually $0 other than a super cheap rent and transportation if u reallllly wanted to. Will u want to though when your friends are going out to bars and stuff tho?

[ughbugchugplug]

You'd have to be buying some seriously expensive stuff to run through 3k a week when you're at firm events 6 days a week multiple nights a week of the firm picking up your bar tab, paying for both lunches and dinners, etc... I balled like crazy just living it up as much as I possibly could, dropped a few grand in Vegas several hundred dollar bar tabs multiple times a week super luxury sublet.... And still came out with like $11k or something

Edit, responding to above, u could probably get by spending virtually $0 other than a super cheap rent and transportation if u reallllly wanted to. Will u want to though when your friends are going out to bars and stuff tho?

Cool, thanks. Yeah, I probably will want to go out a bit, but I feel like living that sort of lifestyle is how people end up being biglaw lawyers for 5 years and have the same debt when they graduate. I want to be debt free by my early 30s if possible

[dixiecupdrinking]

You're probably better off using it to pay your living expenses 3L year. Remember that you'll make the same money in 10 weeks of actually working after you graduate, so although it seems like a lot of money now, it isn't a big windfall. And I am deeply skeptical that whatever you can buy with $20k down in the NYC area will be a good use of that money.

[ughbugchugplug]

You're probably better off using it to pay your living expenses 3L year. Remember that you'll make the same money in 10 weeks of actually working after you graduate, so although it seems like a lot of money now, it isn't a big windfall. And I am deeply skeptical that whatever you can buy with $20k down in the NYC area will be a good use of that money.

Hmm, you may be right, and I'd definitely like to reduce my debtload. But there are a few towns fairly close to NYC with affordable housing - montclair, for example. Maybe the better idea is to wait until I'm a second year? I was worried that moving further away as my workload increases could be challenging.

[Anonymous User]

I saved it.... then bought a rock. Not saving anything else for the rest of my life.

[favabeansoup]

Hmm, you may be right, and I'd definitely like to reduce my debtload. But there are a few towns fairly close to NYC with affordable housing - montclair, for example. Maybe the better idea is to wait until I'm a second year? I was worried that moving further away as my workload increases could be challenging.

Would you have any other income to support the actual payments + other closing costs between when you buy your home 3L year and when you actually start working post grad?

I think waiting the extra year + not taking out as much debt (especially if it is at 6.8% interest) is the much better option here.

[Avian]

Hmm, you may be right, and I'd definitely like to reduce my debtload. But there are a few towns fairly close to NYC with affordable housing - montclair, for example. Maybe the better idea is to wait until I'm a second year? I was worried that moving further away as my workload increases could be challenging.

Would you have any other income to support the actual payments + other closing costs between when you buy your home 3L year and when you actually start working post grad?

I think waiting the extra year + not taking out as much debt (especially if it is at 6.8% interest) is the much better option here.

If you're going to have to take out more loans, I think the above is probably a better use of the money. Another thing to think about is that the federal Direct Unsubsidized loans have an origination fee of 1.068% and the Direct PLUS loans have an origination fee of 4.272%. That's mainly why my priority was avoiding taking out as much as I could for 3L.

[kcdc1]

The idea is that paying a mortgage can sometimes be cheaper than renting due to the income tax write off.

Renting is often a better financial decision than buying. A lot of people forget to factor in the hidden costs of buying (like not being able to invest your liquid assets elsewhere). See:

http://www.nytimes.com/interactive/2014 ... lator.html

[Slytherpuff]

For people who aren't saving for a house down payment: would you recommend paying down loan interest with some of your SA $$$, or saving it for housing/living expenses during 3L and bar study? (Ideally I'll do a bit of both, I'm just trying to see what people usually do!)

[RaceJudicata]

I saved it.... then bought a rock. Not saving anything else for the rest of my life.

Right there with you...

[dixiecupdrinking]

You're probably better off using it to pay your living expenses 3L year. Remember that you'll make the same money in 10 weeks of actually working after you graduate, so although it seems like a lot of money now, it isn't a big windfall. And I am deeply skeptical that whatever you can buy with $20k down in the NYC area will be a good use of that money.

Hmm, you may be right, and I'd definitely like to reduce my debtload. But there are a few towns fairly close to NYC with affordable housing - montclair, for example. Maybe the better idea is to wait until I'm a second year? I was worried that moving further away as my workload increases could be challenging.

I think quite the opposite, living closer to work is most helpful when you're just getting started and figuring out your hours and how to manage your lifestyle. It's a lot easier to tell a partner you're gonna take a call from home because you have to catch a train after you've been there for a couple years.

Also, you may find that given your hours, Montclair is really not all that close.