The Atlanta Lawyer January/February 2015 - Page 8

Law School Life dollars and sense Financial Planning for Law Students By Meredith Rainey Permar, 3L at Emory University School of Law and Tiffany Taylor, 2L at Emory University School of Law M oola. Dough. Cold, hard cash. For some of us, the dream of bringing home the big bucks is the reason we went to law school in the first place. For others, giant checks were never a consideration—until they began writing them to cover their law school expenses, of course. The New America Foundation recently reported that the typical law student graduates with over $140,000 in debt and pays $1,187.00 each month for student loans. Whether or not you fit into this category, it is important to prepare now for your future. The Atlanta Lawyer sat down with Patrick J. McGonigle and Jeffrey B. Rosengarten, financial planners with Homrich Berg, to discuss financial planning for law students and what we should be doing to secure our futures. Mistakes to Avoid Spending too much, relying on credit cards, and not participating in 401(k) programs are some of the biggest mistakes that young professionals make when it comes to their financial well-being. While students might not be able to add to a 401(k) until after they begin their careers, they can take the initiative to prepare for the future while they are still in school by taking the steps below. Create a Budget A personalized budget is really the first building block of a financial plan. Writing down your expenses, categorizing them, and allocating your income provides a strong foundation for your financial plan and saves you money because budgeting helps you identify where you are overspending so that you can adjust your habits accordingly. 8 THE ATLANTA LAWYER January/February 2015 The Emergency Fund The first hurdle, once you have set up your budget, is to build up an emergency fund in a money market or savings account that can be accessed in urgent situations. If you don’t know where to start, aim for saving enough money to cover 3-6 months’ worth of expenses in case of job loss, difficulty finding work, and financial hardships. Make a Savings Plan Decide how much you should realistically be saving right now. There is no magic number, but you should target saving 10-20% of your earnings. Save or invest your chosen amount of income first rather than at the end of the month because money has a tendency to disappear in between paychecks. When it comes to saving, some is always better than none. Compound Interest and Start Early Get an early start! Because of the power of compound interest, the earlier you begin saving