By almost any measure, I had hit the jackpot. I graduated from law school in 2013, with honors, and landed a job at one of the largest law firms in the midwest. In an era when law students were – and still are – frequently finding themselves unemployed or underemployed, I was one of the “lucky” ones. My starting salary in my first ever real job was $110,000 per year.
Here I was, a 26-year-old kid making a salary that my middle-class parents had never earned in their entire lives. The most I had ever earned in a year before was about $20,000.
According to the Bureau of Labor Statistics, the average salary for 25-to 34-year-olds in the United States is $38,324 a year. I was making nearly 3 times that amount. By my third year at the firm, my salary rose to $125,000 per year. I was a baller! But, like almost all new lawyers (or almost anyone entering a high paying professional field), I also had a sizable student loan debt – about $87,000 worth.
So what is a newly minted 26-year-old lawyer to do with this type of income? I worked hard to get through law school after all. Don’t I deserve to live it up?
And that’s how many young lawyers do it (or doctors or dentists or anyone entering a high paying field at a young age). The new lawyers around me mostly followed the same sequence of events. Some bought new houses within a year or two of starting work. Those that didn’t buy a house lived in the hippest neighborhoods and in the hottest luxury apartments in town, replete with jacuzzis, balconies, and rooftop patios. One young lawyer that I knew spent half of his take-home pay on a penthouse apartment!
Everyone had student loan debt as far as I was aware. But that was normal for a new young lawyer. When you have this huge income coming in, you’ll be fine! Heck, my standard repayment for a 10-year student loan was in the neighborhood of $1,000 per month – about 11% of my starting salary. That’s not really all that much when you think about it – certainly manageable to be able to live well and pay your student loan bill without worry.
That’s not the way I approached my new job
I didn’t want to be the normal young lawyer and take 10 years to pay back my student loans. There was an opportunity to do something great with this newfound income. Most importantly, I knew I didn’t want to be stuck in the shackles of the golden handcuffs, forced to stay in a job because of the money. A time will probably come when your job is the worst thing in the world and I didn’t want to be forced to have to stay in a job I hated because I needed the paycheck to keep up my lifestyle.
So the way I approached my salary was to treat it as a windfall. I didn’t act like I made six figures. Instead, I acted like I made normal money for someone my age. I lived in normal apartment buildings and paid average rent for my area. But that didn’t mean I was living like a pauper. I still went out to eat, lived in good neighborhoods, and hung out with friends.
I just didn’t spend like I was making six figures. Instead, I spent like I was making a normal income for a 26-27-year-old young professional. If my closest friends were making less than half of what I was making, then why not just live like I was making that too? I treated the rest of my income as a bonus and used it to pay my loans and get myself more financially settled.
Now, 2.5 years later, I’m free from the student loan shackles. And because I was free from student loan debt, I was able to take a new, more satisfying job, making $50,000 less per year without even blinking an eye!
If you are young and have a high income, treat it like a windfall.
I’m not saying to act as if you don’t deserve the income. If you are young and worked hard to get to where you are, you absolutely deserve to be paid appropriately! But don’t get caught up thinking you’re suddenly a big shot because you’re in your 20’s and making a ton of money. You’ll have plenty of time in the future to be a big shot if you want. You don’t need to be a big shot yet! Most of your peers aren’t big shots. It won’t look weird if you live modestly right now.
I think this video of Dave Ramsey answering a question from a new lawyer/doctor couple is a great example of the way most young, high-income earners act once they get into their first jobs. Basically, a young lawyer and doctor couple tells Dave that they have $420,000 in student loan debt and are starting their careers and expect to make $550,000 a year. They want to buy their “dream home.” Even after being told not to buy the home and instead, to live cheap and pay off the loans, you still get the feeling that this couple is going to buy the house – because that’s what you are supposed to do when you make that much money.
Imagine what they could do if they lived like they made $80,000 per year and treated the rest as icing on the cake.
Don’t squander your high income
When I left my job to move into government work, I asked some of my peers how they stood on their student loans. No one that I had spoken to had made a dent in their loans. Instead, they appeared to have spent it on their apartments and fancy restaurants, basically, living the life that’s expected of a six-figure earner. After 2.5 years, they basically had nothing to show for all their hard work.
You never know what the future may hold and you want to give yourself the flexibility to do what you want to do and not be dictated by what your monthly payments are. You’ll have your entire life to make money. Treat those early high-income years as a bonus and get yourself on the right footing. Your future self will thank you.
More Recommended Ebike/Scooters
Check out these other ebikes/scooters I've had the chance to do a review for:
- GEN3 Outcross Bike – The GEN3 Outcross is a solid, affordable fat tire ebike that does a good job of doing what I need it to do. It works great for city riding, giving me a smooth ride in all conditions. It’s works really well as a winter ebike since the fat tires give it good traction over snow and ice. Check out my GEN3 Outcross Review.
- Himiway Escape Bike – The Himiway Escape is an interesting bike for anyone looking for a moped-style ebike. If you’re a gig economy worker, the Himiway Escape is particularly interesting and it’s possible to think of it as an investment, especially if you can opt to do deliveries with the Himiway versus using a car. It’s not cheap, but you can definitely make your money back when you compare the mileage you’ll put on your car versus using an ebike. Check out my Himiway Escape Bike Review.
- Espin Sport Bike – The Espin Sport is a good ebike for someone who is looking for an ebike that feels and rides more like a regular bike. There are many ebikes that are really only bikes in name. In reality, they’re basically electric mopeds. The Espin Sport, by contrast, is a bike you could probably ride without the battery and you’d feel like you’re just riding a regular bike. Check out my Espin Sport Review.
- Varla Eagle One Scooter – The Varla Eagle One is an excellent scooter that can make sense for a lot of people. It can work as a primary mode of transportation. You can use it to work on gig economy apps like DoorDash, Uber Eats, and Grubhub. And it can also be a recreational vehicle if you’d prefer to use it for that. Check out my Varla Eagle One Review.
- Fucare H3 Scooter – The Fucare H3 is a fun scooter and I’ve enjoyed testing it out. For a daily commuter or quick trips or errands, the Fucare H3 is probably the scooter I’ll use. It’s portable and easy to maneuver, so it’s just easier to take on the road when I need it. Check out my Fucare H3 Scooter Review.
More Recommended Investing App Bonuses
For additional investing app bonuses, be sure to check out the ones below:
- M1 Finance ($10) – This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $10 for opening an account. Check out my M1 Finance Referral Bonus – Step-By-Step Guide.
- SoFi Invest ($25) – SoFi Invest is an easy brokerage account bonus that you can earn with just a few minutes of work. Use my SoFi Invest referral link, fund your SoFi Invest brokerage account with $100 and you’ll get $25 of free stock. I also have a step-by-step guide for the SoFi Invest referral bonus.
- Moomoo (5 free stocks) – Moomoo is a free investing app currently offering 5 free stocks (usually worth around $75-$100) if you open an account using a referral link and deposit $2,000. Read my Moomoo referral bonus guide for more information.
- Webull (5 free stocks) – Webull also gives you 5 free stock valued between $3-$3,000 each if you open an account using my referral link. Here’s a guide I wrote about how to earn your free stocks using Webull.
- Robinhood (1 free stock) – Robinhood gives you a free stock valued between $2.50-$225 if you open an account using my referral link.
- Public (1 free stock) - Public gives you a free stock valued between $3-$70 if you open an account using my referral link.
More Recommended Bank Account Bonuses
If you’re looking for more easy bank bonuses, check out the below options. These bonuses are all easy to earn and have no fees or minimum balance requirements to worry about.
- Chime ($100) - Chime is a free bank account that offers a referral bonus if you use a referral link and complete a direct deposit of $200 or more. In practice, any ACH transfer into this account triggers the bonus. This bonus is easy to earn and posts instantly, so you’ll know if you met the requirements as soon as you move money into the account. I wrote a step-by-step guide on how to earn your Chime referral bonus that I recommend you check out.
- Digital Federal Credit Union ($100) – Digital Federal Credit Union (DCU) is a free, nationwide credit union that I recommend to readers for two reasons. First, DCU has a $100 referral bonus if you open a free DCU checking account with a referral link. Second, DCU has a saving account that gives you 6.17% interest on your first $1,000. Check out my in-depth post on how to set this account up.
- Upgrade ($100) – Upgrade is a free checking account that’s currently offering a $100 referral bonus if you open an account and complete three debit card transactions. These bonus terms are easy to meet, so it’s well worth doing this bonus as soon as you can. Importantly, this bonus says that it’s now scheduled to end on January 31, 2023. As long as you get your account opened before January 31st, you should be eligible. Here’s a post I wrote with more details: Upgrade $100 Referral Bonus – Step By Step Directions.
- SoFi Money ($275) – SoFi Money is a free checking account from SoFi. They’re currently offering a $25 referral bonus if you open a SoFi account with a referral link and deposit $10. You can also make an additional $250 as well if you complete a direct deposit. This is a good bank that is also 100% free, so you won’t have to worry about managing this account. Here’s a post I wrote with instructions on how to earn your SoFi Money bonus: SoFi Money Referral Bonus: Step By Step Guide.
- Current ($50) – Current is a free fintech bank that’s offering new users a $50 referral bonus after signing up for an account using a referral link.Current is an easy bonus to earn and also gives you access to three savings accounts that pay you 4% interest on up to $2,000. That means you can put away up to $6,000 earning 4% interest. That’s very good and makes Current an account I recommend to everyone. Check out my step-by-step guide on how to earn your Current Bank bonus.
- Fairwinds Credit Union ($100) – Fairwinds Credit Union is offering a referral bonus for users that sign up using a referral link. Fairwinds has no fees or minimum balance, so this is a particularly easy bonus to earn. Since this is a smaller credit union, my gut instinct tells me this offer won’t be around long, so if you’re in a position to meet the bonus requirements, grab this bonus before it’s gone. Here is my step-by-step guide on how to earn your Fairwinds Credit Union bonus.
- OnJuno ($60) – OnJuno is a fintech/neobank that is currently offering a $10 referral bonus if you open an account using a referral link and make a deposit of $50 or more. You will also get 1000 JCOIN. The 1000 of JCOIN is cryptocurrency. At the time I'm writing this, it'll be worth about $50. Check out my OnJuno referral bonus guide here.
- Varo ($30) – Varo is a free fintech banking app similar to Chime or Current. It’s currently offering a $30 bonus to new users that open a new Varo account with a referral link. The bonus for this bank is very easy to meet, all you need to do is spend $20 within 30 days of opening your Varo account. Check out my step-by-step guide to learn how to earn this bonus.
- Novo Bank ($40) - Novo bank is a free business checking account that’s currently offering a $40 bonus if you open a Novo business checking account using a referral link. In addition to being a good bank bonus, Novo is also a good business checking account. It has no monthly fees or minimum balance requirements and operates a good app and website. Indeed, it’s the business checking account I currently use for this blog. Check out my post on how to easily open a Novo account.
- Albert ($150) – If you can manage to do a real direct deposit, Albert is an easy account you can use to earn a referral bonus. Here’s a review about Albert I wrote. And here’s a step-by-step guide on how to earn your Albert referral bonus.
- Netspend ($20 + 5% Interest Savings Account) – Netspend is a company that provides 5% interest savings accounts. If you sign up using my referral link, you’ll get a $20 signup bonus once you make your first deposit into your Netspend account of $40 or more. That means you get a 5% interest savings account and a free $20 to start! Make sure to check out my in-depth guide on how to set up these accounts.
Kevin is an attorney and the blogger behind Financial Panther, a blog about personal finance, travel hacking, and side hustling using the gig economy. He paid off $87,000 worth of student loans in just 2.5 years by choosing not to live like a big shot lawyer.
Kevin is passionate about earning money using the gig economy and you can see all the ways he makes extra income every month in his side hustle reports.
Kevin is also big on using the latest fintech apps to improve his finances. Some of Kevin's favorite fintech apps include:
- SoFi Money. A really good checking account with absolutely no fees. You'll get a $25 referral bonus if you open a SoFi Money account with a referral link, and an additional $250 if you complete a direct deposit.
- DCU. Digital Federal Credit Union (DCU) is a free, nationwide credit union that I recommend to readers for two reasons. First, DCU has a $100 referral bonus if you open a free DCU checking account with a referral link. Second, DCU has a savings account that gives you 6.17% interest on your first $1,000.
- Novo Bank. Novo bank is a free business checking account that’s currently offering a $40 bonus if you open a Novo business checking account using a referral link. It’s the business checking account I currently use for this blog.
- M1 Finance. This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $10 for opening an account.
- Personal Capital. One of best free apps you can use to monitor your portfolio and track your net worth. This is one of the apps I use to track my financial accounts.
Feel free to send Kevin a message here.
FP major props dude! Well done not falling into the trap of lifestyle inflation and quickly paying off what many would see as an insurmountable student loan debt. Many people start working and are immediately paid more money than they have ever made in their lives and fall into the consumer spend spend spend pattern. They must not understand the repercussions of this down the line or simply do not care.
Thanks Dollar Engineer! I think its just a lifestyle thing. When you enter into these big money jobs, there’s a feeling that you deserve certain things now The thing is, these jobs might not last forever. And it’s not normal for a mid-20’s person to make six figures. If you live like you make half of that, you’ll still be able to keep up with all the Joneses!
Way to go FP! You are certainly wise beyond your years in money management. If more people took a thoughtful approach to their spending, they could be in a similar situation. Unfortunately, many people get caught up in living the lifestyle they think they should be living and not thinking about the future.
You bought yourself an option to take a lower paying but more satisfying job – well done and keep up the good work!
Thanks Jon! It was definitely great when I made that last payment and knew I could leave if I wanted to.
Great advice! So many recent graduates with high incomes don’t think about the consequences of living “normally” and spending so much of their money on rent and trendy restaurants instead of paying down their debt first. They are setting themselves up to be buried in debt the rest of their lives because they think they can afford the nicer things. Glad to see you and many other bloggers realize that this isn’t normal and make debt payoff a priority.
Thanks Paige! It’s not even so much about getting the nicer things as it is living beyond where you should be at that age.
What I mean is, my non-lawyer friends were making less than half what I was making! If I lived just like the “normal” 26 year old and treated the remainder of my income as a windfall, I was still living as well as my “normal” friends.
The high earning young person is an anomaly, not the norm, right? I could live like I was making 50k a year and no one would think that was weird, since that’s what they were already making anyway.
Sorry, I wasn’t super clear in what I meant. It was really early and I had just woke up. By “normal” I meant living beyond your means or not spending/ saving wisely when coming into the real world making significant money as I’m sure you saw many of your peers doing as lawyers tend to be paid pretty well. Many recent graduates unfortunately see that amount of money and think they can do whatever they want with it with no consequences.
I would say a high earning recent graduate would not be the norm, but being in the social services field, many of my fellow recent graduates tend to make more and therefore spend more than I did following graduation. I am seeing people who make twice as much as I do struggle to pay student loans because of the other lifestyle choices they have made.
Even living off of $50k a year (depending on where you live) can be quite a nice lifestyle, and paying off debt with your remaining income would still have it paid back very quickly.
Hope that makes more sense, sometimes it’s hard to convey things over text.
Definitely makes sense!
Combined Mrs. A.E. and I do pretty well, we earn way more money than we need to get by – using our raises over the last 3 years we have been able to drastically transform our finances without cutting a lot of spending on fun experiences.
You figured it out early – and will be making a lot of people jealous down the road!
Happy to have another MN blogger in the mix
Thanks A.E.! I’ve been super inspired by the PF community, so hoping I can share some of my knowledge and experiences.
Great to hear that you’ve been living well too and banking the raises!
Some people can’t get ahead because they have a spending problem. Some people can’t get ahead because they don’t earn enough. Some people spend too much and don’t enough. It sounds like you’re set up to have a high income and low spending; the best of both worlds. If you keep this mentality, you’ll find it difficult NOT to succeed :).
I agree with you, life is long and uncertain, as long as you’re enjoying life along the way – why not save a big portion of your income? Go you!
Tristan
Some people spend too much and don’t earn enough*.
Yes this! I graduated from college at 21 and made $100k my first year, which is a crazy amount of money for someone who went to college in a cheap college town. So I didn’t live it up too much and I saved a ton. I’ve kept that up over the years as my income went up to $200k and back down to $150k. I’m now sitting on a net worth of just under $800k thanks to my hard work of savings in the last six years.
That is awesome! I’m hoping one day to be in the same position as you! Unfortunately, as a lawyer, I didn’t get to start working until 26-27 years old, and then I had to spend a few years digging myself out of the hole I put myself in. Ms. Panther, who is currently in residency, isn’t even going to start working until she’s 32, so it makes it even more important for us to save in order to catch up!
Absolutely Mr. FP – my husband makes 160K and that goes up to 220K a year after bonuses and stock but he’s only, only guaranteed that contract for the next 3-4 years. After that it’s a slumber. Still high paid but no sure climb. We save a huge amount a year and live cheap because we fear lifestyle creep. Thank you for writing this!
That’s a lot like lawyers that have a 3-5 year work horizon, then can see their income drop suddenly when they get fired, burn out, or move on to lower paying fields.