First Year Associates - How much money do you save a month? Forum

[Anonymous User]

Ive been trying to see if I'm spending too much and would be grateful if anyone can share how much they're saving a month on average.

Helpful to include:
1. Location: [for cost of living purposes]
2. Amount of 401k/Retirement Savings, if any:
3. Amount of HSA or other Healthcare Savings, if any:
4. Amount of cash Savings:
(Or you can just state your total savings, obviously, but would be more helpful to know how much cash etc.)
Thanks!

[Anonymous User]

As a reference point, with moderate rather than aggressive savings, you can save over $80k per year. That assumes no debt, so decrease accordingly, or offset with cuts in rent, restaurants, etc.

[Anonymous User]

Recent first year in a smaller market that is below market on pay. Saved a bit over 100k after bonus between my HSA/401k/Roth/Brokerage/Cash. Maxed the tax advantaged space obviously, but have about 10k to 15k in cash at any point in time. Single, no kids. No student loan payments due to the freeze, this will likely mess up a lot of the metrics.

[The Lsat Airbender]

Ive been trying to see if I'm spending too much

Pegging this to other people's habits is pointless for several reasons. Month-on-month numbers are also unhelpful. What are your financial goals? Work backwards from there. Plug numbers into a savings calculator like https://walletburst.com/tools/coast-fire-calc/ and see how it affects your ability to build wealth and retire.

It's safe to say that anyone on a biglaw salary should try and max out any tax-advantaged investment vehicles they have access to (401(k), HSA, mega-backdoor Roth). Student loan payments can take precedence over investing depending on the rate and quantity of debt, as well as your personal risk tolerance.

Cash savings should be something like 3-6 months' expenses ideally; it might take a new associate a couple years to get there and that's fine.

You should do these things not because everyone else is (indeed, too few people keep their financial house in order) but because of the tax advantages involved in retirement accounts/loan repayment on the one hand and the security of a cash emergency fund on the other.

[Anonymous User]

No debt, saved 80k first yar (including 401k/HSA). Should save 100k as a second year. Live in VHCOL with roommate, 3k a month on rent.

[Anonymous User]

Other than 401(k), basically zero because my SO is a student in another city so I'm paying for two rents, two people's lives, and a whole lot of last-minute (read: expensive) flights. Fun!

[Anonymous User]

1st year in VHCOL area. Rent is roughly $2.25k. I’ll be saving/repaying ~$85k this year (including 401k/HSA). Half of that is going towards student loans.

[jotarokujo]

Other than 401(k), basically zero because my SO is a student in another city so I'm paying for two rents, two people's lives, and a whole lot of last-minute (read: expensive) flights. Fun!

are they your spouse? curious why you are paying your SOs rent

[Anonymous User]

Other than 401(k), basically zero because my SO is a student in another city so I'm paying for two rents, two people's lives, and a whole lot of last-minute (read: expensive) flights. Fun!

are they your spouse? curious why you are paying your SOs rent

Engaged, had been living together for 3 years prior. Also with wfh I've been spending most of my time there, so the actual waste of money is the apartment near the office.

[Anonymous User]

I always find these useful:

1. HCOL
2. Married
3. No debt
4. Rent is around $3,400
5. $6,416 saved per month between retirement and non-retirement accounts

Together, we make close to $300,000 and, so far, our plan is to max both our 401(k)s ($41,000 annually) and then stash away at least $3,000 per month.

401(k) + Cash Savings = $6,416 per month. Our budget has wiggle room in it, so it’s possible we’ll save more than that per month.

I’m about six months in and we’ve pretty much gotten into the rhythm now. We had a lot of necessary moving expenses (furniture) when I first started because we basically had nothing all through law school. We will hit our emergency expense fund (3-6 months) next month and then, after that, the rest is going into an IRA or taxable brokerage account.

[Anonymous User]

$6,416 saved per month

For my sake, please spend that extra dollar. It's stressing me out

[Anonymous User]

1. VHCOL
2. Married
3. No debt
4. Max out my 401k and HSA monthly.
5. Rent is ~4k
6. Save 4k cash a month on average. I usually end up investing 2k of that.
7. Total annual savings is aprox. 75k/year (including retirement/HSA)

[Anonymous User]

No debt. TX. Class of 2020. As of 1/1/21, NW was $218,828. If I back out stub-year savings, I "saved," inclusive of all investment/save-advantaged accounts, $207,625.

Allocation of NW was:
1. 0.77% Cash
2. 3.9% HSA
3. 61.89% Taxable Investment Vehicle
4. 26.45% 401(k)
5. 8.79% Roth IRA
6. 0.45% Credit Card Rewards
7. -2.04% Tax Return (owed)
8. 1.05% Foreign Currency
9. -1.27% Interest Payable on Personal Loan

I spend ~$2,200/mo. now so savings is whatever I net per mo. as a 2nd-year less ~$2,200.

[Anonymous User]

1. D.C.
2. Max out 401k (20,500/year)
3. Max out HSA ($3650/year)
4. Current Monthly savings = $6000

[Anonymous User]

$6,416 saved per month

For my sake, please spend that extra dollar. It's stressing me out

Sorry, I just took the 401(k) max and divided it by 12! I guess I could reduce my cash savings to $2,999 but then we’d have the same problem.