Naive Question about Student Debt Forum

[LsatDork]

Hey,

I have a question about law school debt.
I was looking at the "Student loan payments: Actual numbers" thread in the Legal Employment section.
Even if you and your parents have no money and you borrow 42k a year and end up with about 150k a year roughly, wouldn't you be able to pay this in 2 years at most if you did BigLaw?
If you get 160k a year and are single, you could absolutely give 80k of that in debt repayment right?
I'm asking because I have been living great in NYC for the past 5 years on 12-15k, nice apt in Morningside Heights that I share with roomates, able to eat out now and again, socialize, buy nice-ish clothes, etc... and even though I imagine you need to spend more on clothing, grooming, etc... when you do BigLaw, you could definitely live on 80k right? And pay loans with the rest?

[09042014]

have you never heard of income tax?!?

160 ---> 98k after tax.

Is that 12-15k subsidized by momy or Uncle Columbia? Because you can't live on 12k in Mexico City.

[shock259]

12k/year in NY is actually impossible.

Also, don't forget interest on the debt.

[DrSpaceman]

Also consider that the idyllic and romantic communal lifestyle that you lead as an early 20-something in NYC becomes less attractive as you get older. Splitting the rent 5 ways makes less and less sense quite rapidly as you become a miserly adult.

It will happen sooner than you think.

[kaiser]

Hey,

I have a question about law school debt.
I was looking at the "Student loan payments: Actual numbers" thread in the Legal Employment section.
Even if you and your parents have no money and you borrow 42k a year and end up with about 150k a year roughly, wouldn't you be able to pay this in 2 years at most if you did BigLaw?
If you get 160k a year and are single, you could absolutely give 80k of that in debt repayment right?
I'm asking because I have been living great in NYC for the past 5 years on 12-15k, nice apt in Morningside Heights that I share with roomates, able to eat out now and again, socialize, buy nice-ish clothes, etc... and even though I imagine you need to spend more on clothing, grooming, etc... when you do BigLaw, you could definitely live on 80k right? And pay loans with the rest?

Boy do you have a lot to learn

[LsatDork]

Oh, I assumed that people meant they were earning a net income of 160k.

No, it's totally possible, I can break it down for you.
8, 000 for rent and metrocard
2, 000 for food (c-town or trader joe's)
400 on quality clothes for events
300 on beauty supplies
300 on phone
200 for gas, electricity, internet
150 on cheap day-to-day tops, jeans, etc...

Whatever is left on drinks, movie tickets, b-day gifts for friends, etc...

[LsatDork]

Also consider that the idyllic and romantic communal lifestyle that you lead as an early 20-something in NYC becomes less attractive as you get older. Splitting the rent 5 ways makes less and less sense quite rapidly as you become a miserly adult.

It will happen sooner than you think.

But that's my point, if you just keep living like this for another 2 years and pay off everything, then your quality of life gets significantly better since you'd be debt-free right?
Yes, I don't know anything at all, I do realize.

[ScottRiqui]

Oh, I assumed that people meant they were earning a net income of 160k.

No, it's totally possible, I can break it down for you.
8, 000 for rent and metrocard
2, 000 for food (c-town or trader joe's)
400 on quality clothes for events
300 on beauty supplies
300 on phone
200 for gas, electricity, internet
150 on cheap day-to-day tops, jeans, etc...

Whatever is left on drinks, movie tickets, b-day gifts for friends, etc...

at $5.50/day for food in NYC, you're either *never* eating out, or you get taken on a lot of dates. And your phone is only $25/month? I have no idea what a Metrocard costs per year, but even if it were free, you're talking about $660/month for rent and utilities - how many roommates does it take to make that work?

[BigZuck]

Oh, I assumed that people meant they were earning a net income of 160k.

No, it's totally possible, I can break it down for you.
8, 000 for rent and metrocard
2, 000 for food (c-town or trader joe's)
400 on quality clothes for events
300 on beauty supplies
300 on phone
200 for gas, electricity, internet
150 on cheap day-to-day tops, jeans, etc...

Whatever is left on drinks, movie tickets, b-day gifts for friends, etc...

$300 on phone? What kind of phone do you have? My smartphone is 80 bucks a month.

[ymmv]

Oh, I assumed that people meant they were earning a net income of 160k.

No, it's totally possible, I can break it down for you.
8, 000 for rent and metrocard

Lol right. Metrocard is $112/month, and you're telling me you found a NY apartment for $554 a month? Are you planning to share a studio with four other people or just couch-surf all through law school?

2, 000 for food (c-town or trader joe's)

Hahahahaha.

400 on quality clothes for events

Yes, you will certainly impress those interviewers with your single, untailored, perpetually dirty Men's Warehouse sales rack suit (probably with giant pinstripes).

300 on beauty supplies
300 on phone
200 for gas, electricity, internet

What are you, insane?

150 on cheap day-to-day tops, jeans, etc...

Whatever is left on drinks, movie tickets, b-day gifts for friends, etc...

You will have no social life, and you have budgeted nothing for unexpected expenses or school supplies (e.g. horrendously overpriced casebooks) near as I can tell.

[anyriotgirl]

Oh, I assumed that people meant they were earning a net income of 160k.

No, it's totally possible, I can break it down for you.
8, 000 for rent and metrocard
2, 000 for food (c-town or trader joe's)
400 on quality clothes for events
300 on beauty supplies
300 on phone
200 for gas, electricity, internet
150 on cheap day-to-day tops, jeans, etc...

Whatever is left on drinks, movie tickets, b-day gifts for friends, etc...

what is this a budget for manhattan, kansas?

[DrSpaceman]

Yes, I don't know anything at all, I do realize.

Relax- no one is trolling you here. It's an honest answer.

Life gets more expensive as you get older, often almost inexplicably so. The thought that you're going to put in 11-14 hour days and then come home to an impromptu theme party on a Thursday night is something that will have a real impact on your mental health, as well as on your work performance. I'm an older 0L, and this is hard enough to deal with in my current life as a chef. You're talking about living that way when none of your colleagues will be.

It's not impossible, but it's really pretty hard to imagine.

[180kickflip]

Oh, I assumed that people meant they were earning a net income of 160k.

No, it's totally possible, I can break it down for you.
8, 000 for rent and metrocard
2, 000 for food (c-town or trader joe's)
400 on quality clothes for events
300 on beauty supplies
300 on phone
200 for gas, electricity, internet
150 on cheap day-to-day tops, jeans, etc...

Whatever is left on drinks, movie tickets, b-day gifts for friends, etc...

[McAvoy]

$300 on phone? What kind of phone do you have? My smartphone is 80 bucks a month.

I just reverted to a dumb phone in their defense. ~ $15 a month and I just bring my tablet everywhere.

You have to take calls and text people in another room to avoid looking like a weirdo, but that's some legit savings.

[rayiner]

Oh, I assumed that people meant they were earning a net income of 160k.

No, it's totally possible, I can break it down for you.
8, 000 for rent and metrocard
2, 000 for food (c-town or trader joe's)
400 on quality clothes for events
300 on beauty supplies
300 on phone
200 for gas, electricity, internet
150 on cheap day-to-day tops, jeans, etc...

Whatever is left on drinks, movie tickets, b-day gifts for friends, etc...

Oh jesus. On what planet do you live where people talk about salaries post-tax? Your take-home in Manhattan will be about $7,500 per month. To pay off $150k in two years, you need to pay $6,750 per month. That's impossible even on your budget.

$8,000 per year is $750 per month. A subway pass is like $100/month. Where in the hell are you living in Manhattan for $650 per month? My brother lives in a shitty walk-up he shares with two other people, and he pays $1,500 per month. Where do you pay $16 per month for gas, electricity, and internet? Do you pay for health insurance, etc?

We've had this discussion before, and you can look up the relevant threads. Your tolerance for living in poverty (literally--the federal poverty line is $11,670 for a single person, not accounting for cost of living in NYC), is very different when you're a student or have a chill young-person job (barista, etc) that leaves lot's of time for socialization and going to "events." When you're a big lawyer and you only come home from work to sleep, living with five people in a 3 bedroom is going to feel very different.

[AllTheLawz]

Oh, I assumed that people meant they were earning a net income of 160k.

No, it's totally possible, I can break it down for you.
8, 000 for rent and metrocard
2, 000 for food (c-town or trader joe's)
400 on quality clothes for events
300 on beauty supplies
300 on phone
200 for gas, electricity, internet
150 on cheap day-to-day tops, jeans, etc...

Whatever is left on drinks, movie tickets, b-day gifts for friends, etc...

First time I've ever seen a budget where every single line item is impossible (maybe you can hit the beauty supply budget). Not only is this budget impossible in Manhattan.. it would be hard to live on this even in Atlanta or Houston.

[AllTheLawz]

Also consider that the idyllic and romantic communal lifestyle that you lead as an early 20-something in NYC becomes less attractive as you get older. Splitting the rent 5 ways makes less and less sense quite rapidly as you become a miserly adult.

It will happen sooner than you think.

But that's my point, if you just keep living like this for another 2 years and pay off everything, then your quality of life gets significantly better since you'd be debt-free right?
Yes, I don't know anything at all, I do realize.

Also, every time I see someone use this reasoning it makes me want to hunt them down. Time is a non-renewable resource. You can't just exchange two years of a miserable life for four of a "double-good" life. You just end up wasting two years of your life living unreasonably shitty when you could've been having a reasonable life all along.

[LsatDork]

Yes, I have the ATT $25 a month unlimited texts US + 102 countries, plus 250 minutes, that's enough for me.
I sublet my place for 2-3 months a year because I usually go to fellowship programs in the summer with housing provided.
We have a spacious 4 bedroom 2 baths close to Columbia.
Of course I don't budget for unexpected things because my parents can help me if there is an emergency.
Al lot of my nicer clothes were gifts (Christmas, graduation, b-days, etc...) or family members' that got small faster than they got used.
If you want to know I also scored a 25 a year membership at a brand new gym in great area (Gertrude Ederle Rec Center). They have great classes.
Haha, I don't know why this is so shocking to you. I find it more surprising that anybody would assume that you can't live well and take care of yourself properly unless you spend 20k a year.

[anyriotgirl]

Yes, I have the ATT $25 a month unlimited texts US + 102 countries, plus 250 minutes, that's enough for me.
I sublet my place for 2-3 months a year because I usually go to fellowship programs in the summer with housing provided.
We have a spacious 4 bedroom 2 baths close to Columbia.
Of course I don't budget for unexpected things because my parents can help me if there is an emergency.
Al lot of my nicer clothes were gifts (Christmas, graduation, b-days, etc...) or family members' that got small faster than they got used.
If you want to know I also scored a 25 a year membership at a brand new gym in great area (Gertrude Ederle Rec Center). They have great classes.
Haha, I don't know why this is so shocking to you. I find it more surprising that anybody would assume that you can't live well and take care of yourself properly unless you spend 20k a year.

I don't know maybe because most adults aren't heavily subsidized by their parents

[AllTheLawz]

I'll help you out (b/c Im crazy bored). This is what a borderline reasonable "cheap" monthly budget for a NYC professional looks like off the top of my head:

Rent: $1,200
Cell Phone (who doesn't have a data plan?) $50.00
Internet $25.00
Power/Utilities $35.00
Trash $25.00 (maybe not a thing in NYC)
Eat Out $200.00
Groceries $100.00
Metro: $112
Entertainment $150.00
Misc (clothes and other crap) $150.00
Health Insurance $250
Total: $2272/mo ($27264/yr)

Add in the need to save at least 10% ($16k/yr) of your gross annual salary in some form as an adult.

[rayiner]

Yes, I have the ATT $25 a month unlimited texts US + 102 countries, plus 250 minutes, that's enough for me.
I sublet my place for 2-3 months a year because I usually go to fellowship programs in the summer with housing provided.
We have a spacious 4 bedroom 2 baths close to Columbia.
Of course I don't budget for unexpected things because my parents can help me if there is an emergency.
Al lot of my nicer clothes were gifts (Christmas, graduation, b-days, etc...) or family members' that got small faster than they got used.
If you want to know I also scored a 25 a year membership at a brand new gym in great area (Gertrude Ederle Rec Center). They have great classes.
Haha, I don't know why this is so shocking to you. I find it more surprising that anybody would assume that you can't live well and take care of yourself properly unless you spend 20k a year.

How many people do you share that 4 bedroom with?! $8,000 per 9 months = $889 per month, minus money for a subway pass = $775 per month. If you share with three other people (one person per bedroom), you're saying you pay $3,100 per month for a 4 bedroom apartment near Columbia. Trulia shows most of these 4BR/2BA apartments near Columbia in the $4,000 range... Also note that Morningside Heights really isn't a pleasant commute to most firms, which are located in Midtown East or Financial District.

Also, everyone here is assuming that your parents and family won't buy you work clothes or bail you out in the case of unexpected expenses. When you're a grown-up working a $160k/year job, you're expected to budget for these things, and also do a little bit more than give $25 gifts on birthdays and Christmas. Also, things like health insurance, etc, that up to this point was covered by school or parents' will come out of your pocket.

Your food budget is $166 per month, which is impossible in NYC. What are you going to do, cook dinner when you get home from work at 10 pm? Carefully brown-bag lunch every morning after getting five hours of sleep, before you get on the 45 minute 1/2/3 ride from Morningside Heights to FiDi?

[LsatDork]

I know, I said nowhere that this is how somebody working BigLaw should live. 12k is reasonable for a student like me. A little more to afford things like nice clothes and have an emergency fund is more appropriate, I would think somewhere around 20-25k.

But from the Actual Numbers thread it seems like the median yearly payments for BigLaw associates with 160k salaries and debt in the 120k-ish range is about 13k a year.
I don't really see why it would be worth it to live on 80k a year, while one accumulates interest, and waste money on rent because they can't qualify on a mortgage yet with all this school debt. It seems like a huge waste of money, while one could get it over with in 2-3 years right?

[ymmv]

I'll help you out (b/c Im crazy bored). This is what a borderline reasonable "cheap" monthly budget for a NYC professional looks like off the top of my head:

Rent: $1,200
Cell Phone (who doesn't have a data plan?) $50.00
Internet $25.00
Power/Utilities $35.00
Trash $25.00 (maybe not a thing in NYC)
Eat Out $200.00
Groceries $100.00
Metro: $112
Entertainment $150.00
Misc (clothes and other crap) $150.00
Health Insurance $250
Total: $2272/mo ($27264/yr)

Add in the need to save at least 10% ($16k/yr) of your gross annual salary in some form as an adult.

TBF though good data plans can be obtained for <$50. Virgin Mobile (Sprint network) is $30/month for unlimited text/data and 300 minutes of call time, additional minutes $.02 each.

But then again, I have no idea how to spend only $100 a month on groceries/home supplies while still eating decently, so this all could be much worse.

[Kafkaesquire]

Also consider that the idyllic and romantic communal lifestyle that you lead as an early 20-something in NYC becomes less attractive as you get older. Splitting the rent 5 ways makes less and less sense quite rapidly as you become a miserly adult.

It will happen sooner than you think.

NYC, idyllic? LOL

[rayiner]

I'll help you out (b/c Im crazy bored). This is what a borderline reasonable "cheap" monthly budget for a NYC professional looks like off the top of my head:

Rent: $1,200
Cell Phone (who doesn't have a data plan?) $50.00
Internet $25.00
Power/Utilities $35.00
Trash $25.00 (maybe not a thing in NYC)
Eat Out $200.00
Groceries $100.00
Metro: $112
Entertainment $150.00
Misc (clothes and other crap) $150.00
Health Insurance $250
Total: $2272/mo ($27264/yr)

Add in the need to save at least 10% ($16k/yr) of your gross annual salary in some form as an adult.

I think you might be shocked at what $1,200 buys you in NYC, even in Brooklyn or Queens. $25 for internet also seems low--you'll want a connection fast and reliable enough where you can comfortably use Citrix to log in on evenings and weekends. $200 is comical. I used to eat breakfast/lunch at the subsidized firm cafeteria every day (which is half the price of eating lunch in Manhattan), and it was still ~$200 per month. If you're one of those types that can cook a pot of beans and rice over the weekend and eat it all day that's great, but otherwise $100 per month on groceries is questionable.