Tag: law students

Recent Law Grads: Continue Living Like a Law Student
Law school graduation season is upon us. Whenever I open LinkedIn these days, I’m greeted by pictures of my students in their graduation gowns holding diplomas and posing with family members.

If you’re a new law school graduate, enjoy your time celebrating with friends and family. When you have a moment to catch your breath, take some time to reflect on how far you’ve come since you started law school. Besides what you learned in class, I bet you’ve learned a lot about yourself since your first day as a 1L.

So, are you sick of all the advice you’re getting about starting your legal careers?

Let me guess some of the advice you’ve been getting lately:
1. Your reputation is everything. The legal world is smaller than it seems, and reputations travel fast.
2. You’re still learning. Don’t expect to know what you’re doing right away. Practicing law is a different skill set than most of what you do in law school.
3. Find mentors early. Learn from people ahead of you. Good mentors can help you avoid preventable mistakes.
4. Be easy to work with. Lawyers who are pleasant to work with tend to build stronger careers over time.
5. Your first job does not define your entire career. Legal careers are far less linear than they appear in law school.
All good advice. Interestingly, much of it has very little to do with the law itself, right?

If you’ll humor me, I have one more piece of advice to add to the list:

Continue living like a law student.

This is advice that I wish I listened to when I graduated.

Instead, I spent years digging out of the hole I created for myself because of my poor money decisions. To this day, I still think about all the mental energy I exerted trying to get my finances in order in my 20s.

The problem was I did not continue living like a law student. Here’s what happened.

When I graduated law school, I did not continue living like a law student.

As soon as I started making money after law school, I started spending on things I really didn’t need.

About a year after I graduated, I moved into an apartment by myself. I started spending more freely on my social life. I took taxis (no Ubers back then) when I could easily have hopped on the bus or walked.

At the time, I was a judicial law clerk making around $70,000 per year. That’s the equivalent of roughly $109,000 in 2026 dollars.

Despite a decent income, it was because I was careless with my money that I fell into credit card debt so quickly after beginning my career as an attorney.

On top of my poor spending choices, I had student loan debt. Because I had debt and hardly any assets to my name, my net worth was a negative number.

Every month that went by, my debt grew because of my thoughtless spending choices. That meant my net worth fell deeper into negative territory.

Looking back, my problem was that I spent money that I didn’t have and justified it based on my career potential. That was a mistake.

What I should have done was continue living like a law student until I was on more solid ground.

One way to help you think about living like a law student is to make your spending decisions based on your wealth, not on your income.

Let’s explore what that means in the context of a new big law lawyer.

Continue living like a law student by spending money based on your wealth, not your income.

Let’s say you are starting in big law upon passing the bar. At the current salary scale, that means you’re making $225,000 in salary, plus another $25,000 or so in bonuses. We’ll call it $250,000 in total compensation.

That’s a lot of money.

It’s so much money, in fact, that you might convince yourself you can make some lifestyle changes.

For starters, you figure it’s time to leave the old law school roommates behind and move into a nicer, but smaller apartment by yourself.

Even though the tradeoff for living by yourself is paying more in rent, you justify it because your income is so high.

Besides paying more in rent, you can’t help but order in more meals now that you’re earning a high income. You’re working long hours, after all. Who has time to cook?

Even though you survived on frozen chicken breasts in law school, that won’t cut it anymore now that you’re a practicing attorney.

Finally, you start taking Ubers to get around town. It’s only $15 per ride, and you make more than $20,000 per month (before taxes).

Even though you took the bus or the “L” home in law school, you can afford a ride! Uber it is.

As a fresh graduate, you may be thinking that you would never spend money like that. I hope you’re right.

Unfortunately, this is exactly what happens to a lot of new lawyers, including me, because we mistake a high income for a high net worth.

Photo by Patty Brito on Unsplash

Don’t mistake a high income for a high net worth.

Earlier, I said “That’s a lot of money” when introducing the big law starting salary.

And, it is.

But, what I should have said was, “That’s a lot of income.”

See, earning a lot of money is not the same as having a lot of money.

There’s a key difference.

Income is temporary. There’s no guarantee that your income will always be there. People lose their jobs all the time. People also switch careers, which can result in lower income.

Wealth is your financial foundation. When you earn money and don’t spend it, you can build wealth.

Of course, when we talk about wealth, we are talking about all of your assets minus your liabilities. This is your net worth.

When your liabilities are greater than your assets, you have a negative net worth, like I did when I graduated law school. By the way, the same is true for most people when they graduate law school.

A high income is not a bad thing, but it can be a wasted thing.

A high income means you have a lot of money coming in.

That’s not a bad thing, but it can be a wasted thing.

What you do with that money is what determines your wealth and financial progress.

If you use your high income to acquire assets, you are winning the game. The same goes for paying off your liabilities.

If you use your high income to buy expensive things, you’ll be stuck in place. At the end of the year, you’ll likely be in no better shape than someone making a fraction of what you make.

That’s why I prefer to think about how much money I keep each year, instead of how much I make.

It’s why my advice to you is to continue living like a law student for as long as you need to until your overall financial situation improves.

But, I thought high earners deserve to splurge!

You may think that as a new lawyer earning $250,000 per year, you deserve to splurge on life’s finer things. Does your thought process change if you acknowledge that your net worth is a negative number?

Think about it: most new lawyers leave law school with hundreds of thousands of dollars in debt. They also have little to no assets. That means they have a negative net worth.

Should someone with a negative net worth really be splurging on a fancy apartment?

If that person is looking to build a solid financial foundation, the answer is obviously, “No.”

This person should continue living like a law student and spending in accordance with his net worth, not his income.

By the way, is it really so bad to continue living the way you have been for just a few more years? Are you truly miserable? I doubt that most of you are.

You can take significant steps forward on your financial journey by just doing the same things you had been doing throughout law school. Keep your same apartment. Don’t update your entire wardrobe. Cook the frozen chicken breast.

Instead of inflating your lifestyle, use that high income to acquire assets and eliminate liabilities. A high income means you can pay off your debt faster. It means you can build up your emergency savings and fund your investment accounts sooner.

As you take those steps, you’ll see your net worth climb, and you’ve earned the right to start spending more.

We all know that it’s bad to live beyond our means. The problem is we don’t evaluate our means properly.

You don’t have to be a personal finance expert to know that living beyond your means is a bad idea.

Most of us intuitively understand that we should live within our means. Actually doing so can prove to be more problematic.

Part of the explanation may be that we don’t think of our spending in terms of our net worth.

We may not appreciate that if we are spending extravagantly while our net worth is still low, or even negative, we are living beyond our means. It doesn’t matter what our income level is.

That’s why I recommend recent law graduates spend based on their level of wealth (net worth) instead of their income.

Of course, this lesson applies to all of us, not just recent graduates.

This is challenging for lawyers and professionals who feel compelled to keep up with the Joneses.

When you’re making $750,000 per year, you may think you need to buy the $100,000 luxury car. Or, you may not hesitate to spend $10,000 to upgrade your family’s plane tickets to first class.

But, can you really justify that level of spending when your net worth does not match up with your income?

What happens if that income goes away?

Instead, you should prioritize saving and investing until your net worth justifies that higher spending threshold.

Photo by Cole Keister on Unsplash

Spending money based on your wealth does not spending from your wealth.

When I say spend money based on your wealth, I don’t mean that you should spend from your wealth.

In other words, this is not a post on spending down your wealth in retirement.

Rather, what I mean is that you should consider your net worth before deciding how much of your income you are comfortable spending.

For example, if you earn $250,000 per year from your job and have a negative or low net worth, you should continue living like a law student.

If you earn $250,000 per year and have a net worth of $1M, you would be justified in splurging from time-to-time.

If you earn $250,000 per year and have a net worth of $10M, you shouldn’t worry about spending extravagantly with that income. Why?

The reality is that your investment earnings on $10M will far exceed your $250,000 income from work.

Even a 5% investment return on $10M would earn $500,000 per year, double what you earn from your job. You actually might start thinking about why you still have that job in the first place.

These numbers are just for illustration purposes. Still, the idea is that your spending decisions should factor in your net worth at least as much, if not more so, than your income.

Continue living like a law student when it comes to spending.

Whenever you are evaluating your current financial position, especially your spending decisions, I recommend that you focus on your wealth at least as much as your income.

That’s why my number one tip for recent law graduates is to continue living like a law student.

Income is temporary. It can go away at any moment.

If you are fortunate enough to earn a high income straight out of law school, use that high income to acquire assets and pay down liabilities. That means you’ll have to avoid spending extravagantly until your level of wealth can justify it.

Wealth is foundational. Yes, there will be drops in the markets and your net worth can decrease. That is to be expected.

However, if you focus on spending in line with your net worth, you’ll naturally adjust your spending if your net worth temporarily drops. When it rises again, you can justify spending more. The key is to be flexible.

If you can think in these terms, you will build a strong financial foundation that will give you choices down the road.

At the end of the day, financial independence is all about choices.

The lawyers who create choices for themselves will be the ones who don’t have to worry about money as they move through life.

They will be the ones with true wealth that supports extravagant spending, if they choose.

Lawyers: what is the best tip you received upon graduating law school? What advice do you wish you received back then?

Let us know in the comments below.
May 20, 2026
Two Simple Questions to Evaluate Your Financial Position
I’ve been a student of personal finance for nearly two decades and have taught personal finance since 2021. Since I started Think and Talk Money in 2024, I’ve offered my opinions on what I consider to be the most important concepts in personal finance.

After more than 150 blog posts, I’m still surprised at what opinions I share that generate the most pushback. For example, I recently gave you two simple questions to ask yourself to evaluate your current financial position:
1. What happens if something goes wrong, like you lose your job or you have an unexpected medical expense?
2. Can you take advantage if an incredible investment opportunity presented itself?
@thinkandtalkmoney
Build your financial fortress. #younglawyers #personalfinance #financialfreedom #moneytok
♬ original sound – Thinkandtalkmoney

My recommendation was that if you didn’t like your options when considering these questions, it’s a good sign that you should think about building a financial fortress. Building a fortress means having cash on hand. If you don’t have cash on hand, you’re not in a strong financial position, regardless of how much you earn or how many assets you own.

People did not like hearing that they needed to keep cash on hand.

I was surprised at how much pushback I received on this notion of keeping cash on hand. Some readers thought keeping cash on hand was not a productive use of money. Another reader challenged the idea that cash was important for investment opportunities.

You can read my full post on keeping sufficient cash reserves here. In essence, cash is your first line of defense to protect your family. Cash covers you in times of medical or other emergencies, or if you lose your job.

Unfortunately, that’s happening to a lot people these days as big tech reallocates resources to developing AI. Meta (Facebook) recently announced it’s cutting 10% of its workforce. Oracle is similarly cutting thousands of jobs to focus on AI. Having cash on hand keeps you afloat when your income dries up.

To put it succinctly, cash is your safety net so you don’t lose all that you’ve built when times are tough.

Cash is not just about playing defense. Cash also lets you take advantage of unexpected investment opportunities. These opportunities could be anything from buying stocks to buying into a business or law firm. This is sometimes referred to as “keeping your powder dry.” When you have cash, you can act decisively and with confidence.

Think of cash on hand as a survival tool.

Author Nick Maggiulli wrote about a similar concept in his recent blog post, “Survival is the Only Success.” Here’s what Maggiulli had to say after discussing millionaires and billionaires who had shockingly lost their fortunes:

All of these falls from grace illustrate a deeper truth—survival is the only success. It doesn’t matter what you do in life if you can’t sustain it. You could make $100 million, but if you end up in a prison cell or broke, who cares? That’s not success. In fact, it’s the opposite.

***

But they didn’t stop. Why? Because greed is a hell of a drug. Greed drives people to behave in absolutely irrational ways. It drives some people to risk everything for just a little bit more. It’s the most negatively asymmetric payoff you could imagine—the upside is capped, but the downside is unlimited.

And yet people still make this trade all the time. There are people out there doing it right now. They may look successful today, but they won’t hold onto their success.

Like Maggiulli, when I talk about having cash on hand, it’s because I want you to survive. Who knew survival was such a controversial issue?

As attorneys, we should be even more motivated to survive than most. We’ve invested so much money and time into our educations and our careers. It would be a shame to see all that we’ve worked for disappear because we got greedy.

Keeping cash on hand is the antidote to greed. Yes, you’ll give up some potential investment returns. But, you will have gained peace of mind that you can survive and keep what you’ve already acquired.

The deeper you are into your career, the more you’ll start thinking about survival.

17 years into my career as an attorney, this is where I currently find myself. I’ve worked hard to get to where I’m at today, and I don’t want it to all be for nothing. That’s why I am currently dedicated to saving up three years of cash.

If you’re a new lawyer, you may not feel the same way. Trust me, you will.

If surviving sounds controversial to you, please drop a comment below and let me know your preferred alternative.

On the other hand, if surviving sounds important to you, consider building up your cash reserves.

You don’t need to sell all of your assets and move to an all cash position. Investing is still as important as ever. However, don’t lose sight of preserving what you’ve created. Plus, as your career progresses and your assets increase in value, you have more to lose.

If, like me, you are hoping to build up your cash reserves, it all starts with knowing where your next dollar earned is going.

Photo by Ian Keefe on Unsplash

Most of us don’t know where our next dollar is going.

The reason a lot of lawyers struggle to build up a cash reserve is because they don’t have a plan for where their next dollar is going.

Their income hits their checking account, they spend it on this or that, and pretty soon that money has disappeared. They haven’t used the money to advance any of their priorities, like building a fortress.

The money is just gone.

To me, this is one of the most important money mistakes that we need to fix right away. If not, as your earnings increase, you’ll continue making the same mistakes, just with more money to lose.

Having a plan for our money, before we earn it, is essential if we want to build our cash reserves. With a plan, we can eliminate those disappearing dollars with confidence that our money is being used to serve our purposes.

So, how do you create a plan for your money before you earn it?

You need to have a budget.

Don’t think you’re too sophisticated or make too much money for a budget.

Some people hear the word “budget” and immediately tune out. They think they’re too sophisticated or make too much money to worry about budgeting. Or, they don’t want to create a budget because they’re afraid of what it might reveal about their spending habits. Don’t be like these people.

If you truly want to take control of your finances, there’s no getting around this first step. I’ve read hundreds of personal finance books, listen to money podcasts and read blogs every week, and continue to learn from the leaders in this field. In all my years studying and teaching personal finance, I’ve yet to find any credible person who believes you can reach your financial goals without first creating a budget.

All of your most important money decisions stem from your budget. No, you don’t have to budget forever. No, you don’t have to be a servant to the spreadsheet. Once you have a plan in place that’s working, you likely won’t need to continue tracking your spending.

But, to take control of your finances, you need to know where your money is going. It’s as simple as that.

How to set up a budget that creates excess cash.

The first step in generating excess cash is to evaluate where your money is actually going each month. Once you know where your money is going, you can come up with a realistic plan and make thoughtful adjustments that puts your money to good use.

I call this process a Budget After Thinking.

The best part of creating a budget? You would be amazed at the confidence you can build if you can stick to a simple plan for your money.

For a step-by-step guide on how to create a Budget After Thinking, read my post here and follow-up posts here and here.

My budgeting philosophy is premised upon your actual spending habits and realistic adjustments. In other words, forget about aiming for predetermined, generic goals like saving 20% of your income.

I’ve taught enough law students and lawyers to know that these rigid, predetermined targets don’t work. With massive student loan debt and soaring costs of living, generic savings targets just aren’t helpful.

If you aim for some predetermined amount, you’ll end up cutting out everything you like spending money on to the point where you will resent your budget. Then, you’ll give up on your budget and fall back to your old habits.

The beauty of creating a Budget After Thinking is that it is based upon a baseline budget of your actual, current spending habits.

In evaluating your current habits, you can then make thoughtful and realistic adjustments to that budget that will actually last. Through this process, you can accomplish the main goal of generating more fuel for your ultimate financial goals. That might mean building up your cash fortress or investing for long term goals.

Two simple questions to evaluate your financial position.

Let’s revisit our two simple questions:
1. What happens if something goes wrong, like you lose your job or you have an unexpected medical expense?
2. Can you take advantage if an incredible investment opportunity presented itself?
The more cash you have on hand, the better you’ll feel about your answers to these two questions. That doesn’t mean you should stop investing, but it does mean that you can reallocate some of your excess money to savings.

When you have cash, you can survive without losing all that you’ve built up. You can thrive by taking advantage of unexpected opportunities. In other words, create excess cash to survive and thrive.

This concept is particularly important if you’re at all concerned about the current state of world affairs.

If you’re not a fan of cash, drop a comment below and let me know more about your approach.
April 28, 2026
Build a Financial Fortress for Security and Optionality

Warren Buffett, Mark Cuban, Kevin O’Leary, Jamie Dimon, and so many other billionaires share the same fundamental money belief:

Having cash on hand is a necessity. If you don’t have cash on hand, you’re not in a strong financial position, regardless of how much you earn or how many assets you own.

Let’s start with Cuban, who has long advocated for the importance of having cash on hand.

Photo by Daniel Mačura on Unsplash

Cuban says cash is king.

As early as 2008, he wrote on his blog:

The first step to getting rich is having cash available. You arent saving for retirement. You are saving for the moment you need cash. Buy and hold is a sucker’s game for you. This market is a perfect example. Right at the very moment when cash creates unbelievable opportunity, those who followed the buy and hold strategy have no cash. [T]hey can’t or wont sell into markets this low, that kills the entire point of buy and hold.

Those who have put their money in CDs sleep well at night and definitely have more money today than they did yesterday. And because they are smart, disciplined shoppers, their personal rate of inflation is within their means. Cash is king for those wanting to get rich.

In Cuban’s eyes, you can’t become and stay wealthy without having cash available to deploy when opportunity knocks.

Mr. Wonderful says you need cash to protect what you’ve built up.

Kevin O’Leary aka “Mr. Wonderful” of Shark Tank fame agrees. He believes that to be considered rich, you need $5 million in liquidity (cash or treasury bills). In a recent interview, he explained that $5 million is the magic number because that would earn $250,000 in pre-tax income at current interest rates, which is enough for any family to survive on.

While $5 million cash is out of reach for just about all of us, O’Leary’s reasoning is simple and applies universally. If you don’t have cash available, you’re one calamity away from losing everything you’ve built up. When all your money is tied up in real estate, a business, or other investments, you have no protection when things go wrong.

Buffett says cash is like oxygen.

Warren Buffett believes that cash is so important that it’s like oxygen. He explained to CNBC:

[Cash is] at certain levels necessary, but cash is not a good asset… You do need oxygen, and if you’re ever without it for four or five minutes, you will learn… And cash is that way. So you always need to have it available, because you do not know what will happen.

Like breathing, Buffett views having cash as a necessity, even if he would prefer to have his money compounding in investments.

None of us know what’s going to happen in the future. Having cash available is the best way to prepare for whatever happens.

Dimon says to build a financial fortress.

Jamie Dimon, CEO of JP Morgan Chase, credits the success of his bank to maintaining a “fortress balance sheet.” That means ensuring his bank was prepared to withstand any challenges by maintaining liquidity (cash on hand) and never getting over leveraged (too much debt).

Dimon stayed true to this philosophy even when the industry criticized him for being too conservative. The result of his fortress strategy is that JP Morgan Chase has grown to become the biggest US bank by a significant margin.

So, what can we learn from these billionaires when it comes to our personal finances?

It can all be boiled down to one core idea:

Keep cash on hand to build a financial fortress.

What does it mean to build a financial fortress?

Building a fortress with sufficient cash on hand serves two main purposes:

1. You can protect yourself from disaster. This type of cash is known in personal finance as Emergency Savings.

2. You can take advantage of opportunities. That may mean investment opportunities or life opportunities, like switching careers. I refer to this type of cash as Parachute Money.

When you have both Emergency Savings and Parachute Money, you’ve built a financial fortress.

At that point, you are in complete control of your finances and your life. If you want to have ultimate security and optionality in life, you need to build a fortress.

Today, we’ll look at what it means to build a financial fortress by keeping sufficient cash on hand.

First, let’s think about protecting everything we have worked so hard for.

Photo by Edoardo Bortoli on Unsplash

Build a fortress for protection with an emergency savings account.

The first step to building a financial fortress is having an emergency savings account. This is your ultimate security blanket for whatever life throws at you. When the billionaires are talking about having cash on hand to protect yourself from disaster, this is the account they’re talking about.

For example, if you lose your job and the corresponding income, your emergency savings will keep you and your family afloat until you’re working again.

The idea is to use your savings so you don’t have to pull from your long-term investments or rely on credit cards.

Keep in mind that your emergency savings is not just for when you lose your job. Your emergency savings will also protect you in times of emergency (brilliant, huh?), like unexpected medical bills or expensive home repairs.

The idea remains the same: instead of pulling from your investments or falling into debt, you will have cash available in your savings account to cover your needs.

Listen to the billionaires: fully funding an emergency savings account is a crucial step in protecting what you have built up.

Aim for 3-6 months of Now Money saved for emergencies.

In your Budget After Thinking, Now Money represents the consistent, reoccurring expenses that you need to pay every month to take care of yourself and your family.

Aim for building up 3-6 months of your Now Money saved in a dedicated emergency savings account. That said, if you’re in a more volatile industry, you may be better served striving for 9-12 months of emergency savings.

Why only focus on Now Money instead of your full monthly spending?

Since you will only be using this money in times of emergency, you can, and should, forego some of life’s luxuries until you get back on track.

The same is true for fueling your Later Money goals. Take a pause until you sort out whatever it was that caused you to spend your emergency savings in the first place.

In short, having cash on hand in a separate emergency savings account represents your first line of defense when you lose your source of income or have a major unexpected expense.

But, having cash on hand is not only about playing defense. It’s also about being opportunistic when the moment is right. That’s where Parachute Money comes in.

Build a fortress to create opportunities with Parachute Money.

Parachute Money is one of my favorite concepts in all of personal finance.

The analogy goes like this:

Pretend your life is like flying on an airplane.

For whatever reason, you decide it’s time to get off this airplane. Maybe conditions outside of your control have forced you to jump. Or, maybe you’ve decided that it’s time to take control and make a change.

Either way, you’re ready to jump.

All you need is a parachute.

You have a choice between the only two parachutes on the plane.

The first parachute has only one string (or line) connecting the canopy to the harness . You think to yourself, “This doesn’t seem very safe. What if that one string breaks? That would end very badly for me.”

Then, you look at the second parachute.

The second parachute has 10 strings. You say to yourself, “OK, this one looks much safer. If one string breaks, the parachute still has nine other strings to keep me safe. Even if something goes wrong with one or two strings, I would glide safely to the ground.”

It’s obvious which one of these parachutes to choose, right?

So, what does a parachute have to do with money?

Each of your income sources, plus your cash on hand, is like a string on your parachute.

The central idea of Parachute Money is to create multiple sources of income and have sufficient cash on hand so you have optionality in life.

Picture each source of income and your cash on hand as separate strings on your parachute. The more strings on the parachute, the stronger it is.

With Parachute Money, if one of your sources of income dries up, like when you lose your job, you are more than covered with your other income sources and cash on hand.

Of course, the more sources of income and cash you have, the stronger your personal financial position is.

Parachute Money includes your primary job, any side hustles, any income generating assets, and your cash savings. It also includes the income of your significant other, if you share finances.

Billionaires know how important flexibility and optionality are. That’s why they prioritize having cash available, even if that means taking a more conservative approach to investing at times.

Just like the billionaires mentioned above, when you have cash to deploy, you can take advantage of investment opportunities. You also have the option to make big life changes, like switching jobs, without risking your family’s well-being.

The key to Parachute Money: give yourself options with various assets, income sources, and cash on hand.

Personally, I have my primary job as a mesothelioma and personal injury attorney, invest in the stock market, own rental properties, and serve as an adjunct law school professor. I’m also more determined than ever to build up my cash savings to solidify my financial fortress.

Photo by Daniel Mačura on Unsplash

How much cash on hand do you need to build a fortress?

We talked about how 3-6 months of emergency savings is a good target for most people. That should be ample time to get back on track if you lose your source of income or face an economic emergency.

But, how much cash on hand do you need to solidify your fortress? Remember, emergency savings is just the first step in building ultimate financial security.

Like most money decisions, this is a personal choice you need to make after thinking and talking with your loved ones. I can’t tell you how much you need for your fortress, but I can tell you what I’m doing.

Personally, I am striving for three years of cash saved up to solidify my fortress.

Why three years worth of savings?

My thinking is that three years of savings is more than enough money to provide for my family if disaster strikes. At the same time, three years of savings provides me enough cash to deploy if an incredible investment opportunity presents itself.

One year of savings does not feel comfortable to me. I have three young kids and four investment properties. I need to be prepared for anything.

Two years of savings might be sufficient, but it still feels a little uncomfortable to me. Three years of savings feels just right.

The reason I’m not saving more than three years in cash is because I don’t want to miss out on the long-term benefits of compound interest by having more money tied up in cash instead of investments.

For the billionaires, three years of cash savings might not be enough. For the average lawyer, three years of cash savings may sound like too much. Evaluate your personal situation and do what feels right to you.

When you combine emergency savings and parachute money, you have built a fortress.

The ultimate level of financial success comes from having an emergency savings account for protection and parachute money for optionality.

No matter what happens with the economy, you are protected in a variety of ways. When other people are worried about losing their jobs, you will be thinking about options.

If you haven’t prioritized an emergency savings account or parachute money, let the current uncertainty in the world serve as a reminder of how important these concepts are.

As just one example, Meta (Facebook) just announced plans to lay off 10% of its workforce next month, with more layoffs to come. Whether you are in the tech industry or an attorney or a consultant, there’s no guarantee that your job will last forever.

The overall economic outlook is hazy at best right now. Ask five “experts” what the economy will look like in two years and you’re likely to get five different answers.

It’s up to each of us to build in multiple layers of protection in our financial lives to avoid disaster and to prepare for opportunity.

That’s why I’m building a financial fortress.

Do you have an emergency savings account? Parachute money?

How strong is your fortress?

Let us know in the comments below.

April 21, 2026
My Advice: Sometimes You Gotta Spend the Money

The financial independence community sometimes gets a bad rap for encouraging excessive saving at the expense of present day spending.

The reputation is not entirely undeserved.

I listened to a podcast once where the guest admitted to the folly of trying to replicate Trader Joe’s trail mix by buying each of the ingredients individually and mixing them himself.

I thought to myself, “This is what financial independence is about?”

That never sat right with me.

The podcast guest was happy enough to admit that the meager savings from making his own trail mix was not worth his time or energy. Still, if there was ever one aspect of the financial independence community that turned me off, it was advice like “make your own trail mix.”

He was not alone in promoting what I considered excessive frugality. The word “miser,” referring to someone extremely stingy with money, comes up regularly in criticisms of people pursuing financial independence at all costs.

To this day, I’ve never connected with the voices that promote extreme saving at the expense of present day convenience and fulfillment.

I’ve also come to learn that this type of personal finance advice doesn’t work for lawyers.

Advice like “make your own trail mix” doesn’t work for lawyers.

As lawyers, we invest a lot of time (and money) into our education and careers. It’s no secret that we work long, stressful hours. One of the tradeoffs for all the hours we put in is that we have the opportunity to earn high incomes.

Considering we work long hours and earn good money, advice like “make your own trail mix” isn’t very helpful. It’s not worth saving a few pennies in exchange for our limited free time when we could be doing the things that make us happy. When we’re not working, our time and energy should be better spent elsewhere, like being with our family, socializing with friends, or relaxing.

What I’ve learned teaching personal finance to lawyers is that we are generally not interested in saving every penny possible until we can quit our jobs. This makes sense to me. Putting that much constraint and pressure on ourselves does not sound like a fulfilling existence.

The lawyers that I work with know they need to save for retirement. At the same time, they want to use some of their hard-earned money for a better existence today.

That’s why I recommend that lawyers spend money in ways that increase happiness, convenience and time. One of the best ways to practice this type of intentional spending is to create a Budget After Thinking.

When you follow a Budget After Thinking, you give yourself permission to spend on things that make you happy today, while still achieving your long-term goals.

Personally, shopping at Costco is an example of spending money today that brings me happiness, convenience, and time.

Photo by Monaz Nazary on Unsplash

What I learned about spending money by shopping at Costco.

This past Sunday afternoon, my wife and I took the kids to Costco. I was thinking about all this while we walked through the store loading up our two carts.

It was a nice family outing. We killed a couple of hours, the kids had fun, and we have food and supplies to last us for a month.

On average, we shop at Costco once per month. We get our staple items (toilet paper, ground beef, coffee, etc.) and always end up with a few things not on our shopping list. On this weekend’s trip, the kids talked their way into Kit Kat chocolate bunnies (didn’t even know they made those) and enough AA and AAA batteries to power an airplane.

The thing about shopping at Costco: no matter your best intentions walking into the store, the final bill is always big. Somehow, the cart always fills up. What a business!

Anyone who shops at Costco will instantly know what I’m talking about.

I’m no longer shocked or disappointed with the final bill. When my wife jokingly asks what the total is, my answer is always the same, “A lot.”

What I’ve learned is that despite spending a lot of money at Costco, I view this as money well spent. We usually pick up some fun items that are relatively inexpensive and make us and the kids happy. Plus, because we load up on essential items to get us through the month, we don’t spend much time or money each week at the grocery store.

Even though the final bill is always big, I view shopping at Costco as an example of intentionally spending money in a way that increases happiness, convenience, and time.

Which leads me to one of the most important money lessons I’ve ever learned:

Sometimes, you gotta spend the money.

Sometimes, you gotta spend the money.

Personal finance is not only about saving. Yes, saving is crucial to achieving our long-term goals. But, I don’t recommend that we save so dogmatically that we make ourselves miserable along the way.

As lawyers, we work hard and we work a lot. If all we did was save every penny we earned in hopes of quitting our jobs one day, we would quickly burnout.

Instead of making your own trail mix, remember this piece of advice:

Sometimes, you gotta spend the money.

Buy the direct flights.

Costco is only one such example of when it makes sense to spend the money. I spend a lot of money at Costco each visit. But, we enjoy our family outings and get most of the essential items we need for the month in one trip. That’s money well-spent on happiness, convenience and time.

If my goal was to save every penny possible, I wouldn’t feel the same way about Costco.

Not a Costco shopper? Here’s another recent example when I decided to just spend the money.

My brother-in-law’s wedding is in Scottsdale this fall. When I booked our flights, I could have saved real money by connecting in Denver or Los Angeles instead of flying direct to Phoenix. But, at what other cost?

Anyone ever flown across the country with young kids?

A four-hour flight with three young kids is hard enough. My wife has it especially tough with the baby on her lap the entire flight. By the time we land, it feels like we just worked out for 4 hours.

The last thing in the world that we need is to extend the adventure with a connecting flight, even if it saves real money. My priority is to arrive in Arizona feeling energized and excited to celebrate this once-in-a-lifetime event with my family.

Sometimes, you gotta spend the money.

Personal finance is tied to our emotions.

Humans are emotional creatures. Of course, we can rationally look at examples and charts and won’t dispute the long term magic of compound interest. At the same time, we have emotions and feelings that need to be tended to now.

At Think and Talk Money, we regularly explore how personal finance is tied to our emotions. There’s nothing wrong with admitting that in certain situations, the right choice is to spend the money.

Traveling is a good example of spending money to increase happiness. In fact, the happiness effect has been well-documented when it comes to traveling. People get a happiness boost in planning the trip, then taking the trip, and finally remembering all the fun things they did on the trip.

That’s why so many people “love to travel.” It brings them happiness before, during, and after the trip.

Personal finance is about how we spend money today, not just in the future.

Personal finance is not just about long term goals, like saving for retirement. Just as important, personal finance is about how we spend our money in the present.

It’s not realistic to expect people to put off all happiness until some unknown time in the future. It is realistic to make reasonable choices now to ensure a better future.

What might be a reasonable spending choice for one person may be totally unreasonable for someone else. That’s perfectly fine. Still, we all need to make those choices for ourselves.

What I’m suggesting is that if you’re spending most of your time each week at your job, like most of us lawyers do, shouldn’t we think about using some of the money we earn so we can elevate our present day lives?

The key is understanding what those things are, so we actually spend our money in pursuit of those things.

That’s the essence of what it means when I say, “s , you gotta spend the money.”

So, what’s a recent example of where you decided to spend the money?

Let us know in the comments below.

March 25, 2026
Young Lawyers: What to Do When the Market Slides
The stock market has been sliding so far in 2026.

As of this writing, the S&P 500 is down 3.3% in 2026 and the Dow is down 3.8%.

The market can change suddenly, for better or worse. Nobody knows what’s going to happen. Don’t believe anyone who tells you otherwise.

During times like this, it’s important for all of us, and especially young lawyers, to remember the fundamentals of investing.

I was asked recently, “What am I doing with my portfolio while markets are falling in early 2026?”

Despite how chaotic it may seem in the world today, this is not a difficult question for me to answer.

I’m not doing anything.

I invest in the stock market to help achieve my long-term goals. My two main long-term goals are to save for college and to save for retirement.

Each objective is so far away that time is on my side.

Our oldest child is six-years-old, so I have 12-13 years until she even begins college. Over the past two years, we super-funded a 529 college savings plan for my oldest daughter and my son. We plan to do the same for our baby girl.

I fully anticipate that the market is going to go up and down over the next two decades while my kids are in school. That’s part of the process.

As for retirement, I have even more time in front of me. Same as what we just talked about with saving for college, I fully expect the market is going to go up and down many times before I retire.

Time is on my side. That’s why I’m doing nothing.

Like you, I don’t enjoy seeing my portfolio drop so suddenly.

It’s not fun to read the headlines right now. My brain seems to jump to the worst case scenario. Maybe you do the same thing. As lawyers, we’re trained to think of the worst case scenario, right?

This is one of the reasons why I only look at my portfolio once per month when I track my net worth.

To remind myself to hold steady during the down times, I think of a study that examined what would happen if an investor missed the 10 best days for the market in each decade since 1930.

As summed up by CNBC:

Looking at data going back to 1930, the firm found that if an investor missed the S&P 500′s 10 best days each decade, the total return would stand at 28%. If, on the other hand, the investor held steady through the ups and downs, the return would have been 17,715%.

These results illustrate how risky it would be for me to try to time the market. The last thing I want to do is miss the upswing. I have no idea when it’s coming.

But, time is on my side.

I’m going to be in the market when that upswing eventually comes. It may not be until years from now. That works for me and my investment horizon.

Think of it this way: the market is on sale right now.

One other mental hack that’s helping me right now:

I’m telling myself that the market is on sale. How so? I can buy the exact same stocks today for less money than they would have cost even a few days ago. I do love a good sale.

In the end, no matter how bad things seem right now, I plan to continue making regular contributions to each of my investment accounts.

Since I’m investing for the long run, I’ll let the market do its thing while I’m off doing my own things.

Disclaimer: Your situation may be different. I am not an investment advisor. Do your homework and make the best decisions for your personal situation.

What is my personal investing strategy?

When it comes to investing in the markets, I’m about as boring as can be.

My wife and I invest primarily in index funds. We are not active traders. We don’t seek out the newest, hottest stocks.

All we do is make regular contributions to our various investment accounts and let the markets take care of the rest.

As an example, for my daughter’s 529 plan, we chose a passive investment option that’s a mix of stock index funds and bond index funds.

Our portfolio automatically rebalances over time based on my daughter’s projected first year of college. Essentially, the closer we get to her first year in school, the more conservative our portfolio becomes.

We chose a similar option for our other kids’ 529 plans. It’s boring but it works.

Why index funds?

I wrote a post detailing the 7 reasons why I love index funds. Here’s a preview:
1. Anybody can do it
2. No wasted mental energy
3. Low fees
4. Automatic diversification
5. The closest thing to predictability
6. I don’t have stock FOMO
7. Good enough for Buffett, good enough for me
Like so many others in the financial independence community, I fell in love with index funds after reading J.L. Collins’ book The Simple Path to Wealth. You can read my full review of The Simple Path to Wealth in my post here.

Even if you work with a financial advisor, it’s crucial to educate yourself so you can make informed decisions, especially in times of economic uncertainty like we’re in right now. As Collins explains, benign neglect of your finances is never the solution.

By the way, it’s not just Collins urging us to invest in broad based index funds. So does the single greatest investor of our lifetimes, if not ever: Warren Buffett.

In 2013, Buffett famously instructed that after he dies, his wife’s cash should be split 10% in short-term government bonds and “90% in a very low-cost S&P 500 index fund.”

Good enough for Buffett, good enough for me.

For more on index fund investing, check out our full series on investing.

Photo by Free Walking Tour Salzburg on Unsplash

How much money should you put towards each of your financial goals?

Between saving for emergencies, saving for college, and saving for retirement, there are a lot of options. In addition, you may have other short term goals, like paying for a wedding or a house. Or, you may want to invest in real estate.

So, how do you determine how much to allocate to each goal?

There’s no perfect answer here.

The first thing you should do is to spend some quality time formulating your version of Tiara Goals for Financial Freedom.

Then, let those goals inspire conversations with your people to help you make the best decisions. This is exactly how my wife and I came up with our financial goals for this year.

It also helps to attach specific targets to your financial goals, like we did when we estimated how much you should be saving to pay for college.

Once you know what you’re striving for, it’s time to commit to a Budget After Thinking. The primary focus of a Budget After Thinking is to generate fuel for the most important goals in your life.

Are you saving too much for retirement?

Spend enough time on the internet, and you’ll get many different answers about how much to save for retirement. There are just too many variables in play to generally answer this question, like what kind of retirement you want and when you want to retire.

My perspective on retirement savings evolved after reading Die with Zero by Bill Perkins.

In Die with Zero, Perkins suggests that many of us are saving too much for retirement at the expense of using that money to live our best lives now.

Perkins’ book is one of the most compelling personal finance books I’ve read in a long time, and I highly recommend it.

Perkins is not suggesting that saving for retirement isn’t important. He’s saying that the hard data shows that most of us are over-saving.

Believe it or not, you may be closer than you think to achieving your retirement goals.

That’s a very powerful realization.

Think about the options you can create for yourself if you no longer need to save a hefty chunk of your paycheck for retirement.

Personally, after reading Die with Zero, I used the Think and Talk Money Coast FIRE calculator to estimate my projected retirement savings. As Perkins would have expected, at our then-savings rate, my wife and I risked over-saving for retirement. In other words, we have reached Coast FIRE.

With that realization, I made some adjustments and am now targeting my other financial goals at a faster rate. I’m also not skipping out on any experiences that appeal to me because of fears about retirement.

What is Coast FIRE?

Coast FIRE relates to Perkins’ thesis that many of us are over-saving for retirement.

The central idea behind Coast FIRE is to aggressively fund your retirement accounts early in your career so you won’t have to save for retirement as you get older.

For lawyers more established in their careers, Coast FIRE represents the idea that all those earlier years of saving means you no longer need to worry about retirement. You can sit back and let compound interest do its thing. Your retirement years are covered.

This is the essence of Coast FIRE: knock out retirement planning early on to create more career and life flexibility later. Coast FIRE does not mean you can stop working altogether. It means that you no longer need to save for retirement.

Why is achieving Coast FIRE so beneficial?

Because once you hit your projected magic retirement number, you no longer need to fund your retirement accounts. With retirement covered, you can reallocate those funds to other financial or life goals. That means you have more optionality in life.

For example, you won’t need to earn as much money if you’re not allocating a big chunk of your income to retirement. That opens up the possibility of switching jobs or working fewer hours. It also means that you can focus more dollars on your present-day self.

Achieving Coast FIRE also means that you can focus on adding present day liquidity to your portfolio. Liquidity means having cash and investments immediately available in case you need it. Increasing liquidity is an important step for maximizing optionality in your life.

On top of that, when markets are dropping, knowing that you have cash-on-hand can give you a lot of confidence to ride out the dip.

How do you figure out if you have achieved Coast FIRE?

The easiest way to determine if you’ve reached Coast FIRE is to use an online calculator, like the Think and Talk Money Coast FIRE Calculator.

Here’s an example.

Let’s say you are 35-years-old and plan to retire at age 65. After 9 years of working at a law firm, you have $400,000 saved up in your various retirement accounts. You also currently contribute $3,000 per month to your retirement accounts.

Your goal is to have $200,000 annually to spend in retirement.

We’ll assume an average annual return of 10% (on par with the historical results of the S&P 500). We’ll also factor in a 3% inflation rate (the historical average in the United States). Finally, we’ll assume a safe withdrawal rate of 4.7% in light of the updated “4% Rule.”

Now, we’ll plug these numbers in the Think and Talk Money Coast FIRE Calculator.

Based on the above variables, your Coast FIRE number is $559,009.

What does this mean?

At your current saving rate, you will have $559,009 saved up and will reach Coast FIRE in six years. That means that at the age of 41, you will no longer need to fund your retirement.

The big win is that the $3,000 you had been saving for retirement can be repurposed for other life goals or experiences.

Yes, you need to keep earning money to sustain your present lifestyle. However, you have the option to pursue a lower paying, lower stress job because your retirement years are already covered.

Note: Your FI number (magic retirement number) is significantly higher: $4,255,319. That’s how much money you’ll need saved up by the time you turn 65 in our example to spend $200,000 annually in retirement and not run out of money. Because of compound interest, your balance should grow to that amount without any additional contributions after age 41.

When markets are falling, stick to investing fundamentals.

If you are a young lawyer with a long investment horizon, you shouldn’t be concerned when markets are falling like they recently have been.

Time is on your side. Stick to the fundamentals.

I prefer to invest in broad based index funds, like Collins and Buffett recommend. Regardless of markets rising or falling, I make regular contributions and let compound interest work its magic.

Because I have already achieved Coast FIRE, I am now focused on building more liquidity, which translates into more optionality.

It’s not as much fun to track my net worth these days, but the cyclical nature of the markets is part of the process we need to accept.

Young lawyers: what do you tell yourself when markets are falling, knowing you have a long horizon?

Does it help stay the course if you talk to your people?

Let us know in the comments below.
March 17, 2026
Pay Attention to the Little Stuff to Reach Your Money Goals
Being good with money starts with the little stuff.

What I’ve learned teaching personal finance is that too many of us want to race right to the finish line. We want to skip ahead to mile 26 without completing the rest of the marathon.

Money doesn’t work that way. There’s no magic switch to skip over the hard part. The little stuff matters.

Picture the young lawyer who graduates with $100,000 in student loan debt. Absent some unlikely windfall, it’s going to take years of consistent payments to eliminate that debt.

No matter how badly the young lawyer wants that debt to go away, he’s going to carry it for a while. There’s simply no fast way to eliminate hundreds of thousands of dollars of debt.

But, there are faster ways.

I’ll show you exactly what I mean below using the Think and Talk Money Student Loan Calculator.

What you’ll notice is that every $20… $30… $50… decision can make a big impact on your overall financial picture.

This isn’t to say that you shouldn’t spend your money on stuff that makes you happy today. What it means is that you should spend that money knowing how meaningful it could be down the road if used for your financial goals.

Of course, this is easier said than done. When you’re staring down six-figures of debt, focusing on the little stuff may not seem that exciting. But, if you can make these types of small adjustments now, you can buy back years of your life.

Focusing on the little stuff is how you get ahead.

This discussion is not just for lawyers paying off student loans. The same idea applies if you’re trying to pay off credit card debt, save up to buy a home, or invest for your kid’s college.

There are no fast ways to accomplish these goals.

But, there are faster ways.

In my opinion, too many of us don’t want to do the little stuff that will accelerate our financial journeys. We don’t take advantage of these faster ways.

Instead of making intentional money decisions on a consistent basis, we spend mindlessly and hope to get bailed out with a huge bonus later on.

That’s too risky. What if that bonus never comes? You’ve formed bad habits and set yourself up for trouble.

If this sounds like you, you’re not alone. Too many Americans behave this way when it comes to spending instead of saving.

Would it surprise anyone to learn that most Americans are not satisfied with the amount they have saved?

According to a recent survey from Yahoo Finance/Marist Poll:
- Only 10% of households are completely satisfied with the amount of money they have saved.
- Only 20% reported saving more in 2024 than in 2023.
To me, these numbers prove that we aren’t doing the little stuff when it comes to our money.

Unfortunately, these results aren’t surprising at all. They closely mirror the stats I first showed my students in my financial wellness class back in 2021.

What happens when we don’t do the little stuff?

Let’s look at another stat that illustrates what happens when we don’t do the little stuff:
- About 33% of households would not be able to pay their bills or expenses for one month, if faced with a sudden loss of income.
- This number rises to 38% of Gen Z and 41% of Millennials who report they could not pay their bills for even a month.
What do these numbers really mean?

1 in 3 people currently reading this post, in the comfort of their homes they have worked so hard for, would not be able to afford those homes for even one month if they suddenly lost their jobs. It’s worse for Gen Z and Millennials.

Put another way, maybe you’re on the train commuting to work while reading this. How many people are in the train car with you? 30 or so?

Pick out 10 passengers, really look at their faces.

They’re just like you, typically responsible people, working a job to provide for themselves and their families. If these 10 people suddenly lost their jobs, they wouldn’t be able to pay their bills next month.

That’s scary.

Count me in the group of people not completely satisfied with their savings.

If you read these stats and are honestly not worried about your savings, you are in the minority and are doing a tremendous job managing your personal finances.

Keep up the good work and please let us know in the comments below what strategies are working for you.

On the other hand, if you’re being honest with yourself, you’re most likely in the 90% of people that are not completely satisfied with their savings.

Count me in this group.

From 2017 to 2024, my wife and I prioritized using all of our available money to acquire real estate. The downside was that left us limited funds for savings.

We now have work to do to build our savings back up. Instead of presently shopping for investment properties, we are now focused on paying down mortgage debt and increasing our savings.

Most people attribute their low savings to rising cost of living.

What is the most common explanation given by people that have so little saved? The rising cost of living across the nation:
- Nearly 66% of Americans believe that the cost of living for the average family is not affordable in their area.
Millennials and Gen X are the most worried about the cost of living, with more than 70% of each group feeling unprepared. 64% of Gen Z and 59% of Baby Boomers likewise feel unprepared.

Cost of living includes necessary expenses like housing, food, transportation, and healthcare. In other words, Now Money.

There are any number of reasons we can point to that are combining to drive up the cost of living, like limited housing inventory, higher interest rates, and more expensive groceries.

Our goal should be to focus on what we can control. That means the little stuff.

Let’s explore one way to pay more attention to the little stuff.

Photo by nrd on Unsplash

So, what exactly can we do to focus on the little stuff?

When it comes to establishing good money habits, don’t overcomplicate it. There’s nothing wrong with starting small.

A good place to start is with how much money you’re spending on food, whether that means restaurants or groceries.

Why start with food?

There are endless options when it comes to spending money on food. We can choose to spend a lot, or a little, or somewhere in between.

Curious how much the average American spends on dining out?

According to a recent survey from CNET:

The average adult spends $59.19 per week, which adds up to $236.76 per month and a whopping $2,832 a year. Some age groups spend even more.

Of all generations surveyed, millennials (born roughly between 1981 and 1996) spend the most on restaurants and takeout. The average millennial spends $86.55 per week on takeout, which comes out to $346.20 per month and $4,154.40 a year.

Dining out is not the only area to target when it comes to how much you spend on food. CNET also found that we waste a lot of groceries that we end up throwing out:

The average US adult wastes a significant amount of money on food from the grocery store that never gets used. An average of $31.25 weekly is spent on groceries that aren’t cooked or eaten, amounting to $125 per month and $1,500 a year.

For today’s example, let’s focus on this one area of consumption to see how the little stuff can make a big impact on our finances.

How the little stuff can take years off your loan payments.

Let’s focus just on that $125 per month on wasted food from the grocery store. It may not seem like a lot of money to waste, but it adds up.

Let’s revisit our recent law school graduate with $100,000 in student loan debt. Let’s assume he has a 7.5% interest rate and currently pays $1,200 per month.

Using the Think and Talk Money Student Loan Calculator, we can see that with no additional payments, it will take him 9 years and 11 months (119 months) to pay off his loans. He will pay a total of $141,696.

Now, what if he can make an additional payment of $125 per month just by paying more attention to what he’s buying at the grocery store?

With an extra monthly payment of $125, he could eliminate his loans 16 months faster and save $5,999 in total payments.

Think about that.

That’s more than a year of his life back without having to worry about loan payments. All he had to do was pay attention to the little stuff at the grocery store.

What if you make a series of little decisions like this with your money?

Let’s take it one step further. Let’s say our recent law grad also decides to spend $100 less on dining out each month. That’s only $25 per week, which is about what one lunch and one coffee cost these days.

By adding that $100 per month on top of the $125 he saved at the grocery store, he can shave off more than two years of loan payments and save $9,657.

This example illustrates how consistently paying attention to the little stuff can pay massive dividends down the road.

In this case, small adjustments with food can lead to thousands in savings and accelerate your journey to financial freedom.

Pay attention to the little stuff to accomplish your financial goals.

The big takeaway here is that achieving your financial goals starts with the little stuff. There’s no secret weapon or magic wand. You can’t finish mile 26 without completing miles 1-25.

Just like with our recent law grad with six-figure debt, start small and reap the benefits down the road.

Like we said earlier: there’s no fast way to achieve your money goals. But, there are faster ways.

Paying attention to the little stuff may not be exciting, but it works.

If you know a better way, I’d love to hear about it in the comments below.
March 3, 2026