A professors in law school gave me a bit of financial and life advice.
This is what he told me.
1. Pay yourself first.
No matter what you make or what your expenses are, it seems your checking account balance always drains to zero. To prevent that, make saving a priority. Pull out a certain dollar amount before rent or any other bill comes due. If there is still any more left at the end of the money, transfer that over to savings as well. If you consistently have money left over at the end of the month, increase the amount of money you pull out at the beginning.
2. F$CK YOU Account.
This is similar to an Emergency Fund, but in this instance, you create the emergency. So often in life, we are faced with situations where we may not put our best foot forward because of financial insecurity. We don’t ask for a raise or the best salary in negotiations. A F$ck You account of 3-6 months expenses may give you the testicular fortitude to stick to your guns and ask for what you want.
This can also work in your favor for moral gray areas where you may not be comfortable. The professional world is full of gray areas, especially in the legal world. If a partner throws an assignment on your desk that makes you ethically uncomfortable, you are much more likely to stand up for yourself and pass on the assignment if you’ve got a hefty bank account to back you up.
Don’t commit ethics violations. Have a F$ck You Account.
3. Prioritize your Debt.
Debt should be prioritized according to financial logic.
- Pay yourself first.
- Put Money in the Market
- 6.8% Debt (aka Student Loans).
Credit card debt jumps to the top if you have it. Also, if any debt is causing psychological harm, pay off that debt first.
4. Get a Financial Planner Early.
5. Get into a home soon.
Get into a home soon and then ease up slowly. No matter what DO NOT BE HOUSE POOR.
6. Avoid Personal Investments.
Avoid personal investments and financial entanglements. When you get to the point where it becomes Monopoly Money you want to play with, then sure, entangle away. But never loan money unless you don’t expect to get it back.
7. Every year, Get “Fired.”
Live for a month every year as if you’ve just been fired. How much can you save? Look at all of your automatic withdrawals and question every line. Look at your discretionary spending. Is your spending consistent with the who you want to be? Set it in your calendar, once a year. “You’re Fired.”
Pretty sound advice, eh?
Were you given any financial advice that stuck out above the rest?