Financial planning may not be your forte, but it’s necessary if you want a certain quality of life and professional satisfaction. It’s even more crucial in a high-stakes, high-income career like practicing law.
Lawyer jobs are growing at a 9% rate at the moment. It’s a career that offers plenty of growth and competitive opportunities. Because of this, it’s only right that you treat yourself like a brand and a business.
A pinch of savvy goes a long way when charting your financial destiny. We’re happy to point you in the right direction.
The tips in this article will help any lawyer with their strategic financial planning.
Make a Plan for Your Student Loans
The average student who graduates from law school carries a hefty $160,000 in student loan debt.
You need a plan ASAP for any loans that you took out en route to your degrees. Find out how much you owe, down to the penny. Learn how much of that amount is principal, how much is accrued interest, and the date you can expect to pay it all off.
Figure out how much you can afford to pay every month and get on a payment plan. The sooner you handle these issues, the sooner you can begin profiting from your career.
Set a Budget for Your Personal Expenses
Creating and sticking to a budget is a foundational piece of financial literacy. Too many people spend money as it hits their checking account, without giving much forethought to it.
Create a basic budget that you can stick to and revisit it regularly. There are several apps available that can help you with your budget. Many of them will sync to your bank account so you can track and classify your expenditures and other transactions in real-time.
Create a Plan for Retirement
Despite our best intentions, no one can work forever. Retirement planning is a big part of wealth-building that you need to address.
Making the right investments early in life will allow you to retire on your terms, and at whatever age you see fit. Study some investment vehicles that can help you make this happen.
You might want to build your retirement portfolio with a mixture of dividend ETFs and a Roth Individual Retirement Account (IRA). The law firm that you work for might also have an impressive benefits package that includes a 401k or even shares in the company.
Start retirement planning in earnest as early as you can so that you have options.
Hire an Accountant and Financial Planner
Just like you wouldn’t advise anyone to represent their own legal interests, never bite off more than you can chew with your accounting and finance. Retain the services of a certified public accountant (CPA) that can handle your personal finance and recordkeeping.
A financial planner will also advise you on investments that can secure your future. Get some references from other lawyers and personal colleagues that you come across in your travels.
Invest in Assets That Build Your Portfolio
Acquiring wealth is a strategy that never ends. Track your portfolio regularly to know your net worth and how your assets are performing.
Subscribe to portfolios that discuss stocks and other investments. The more you learn, the easier it’ll be to pick winning investments that lead to a robust and diverse portfolio.
Your financial future hinges on your ability to make these investments, so always do your due diligence before taking a position in the market.
Take Care of Your Taxes
Taking the time to handle your taxes makes your financial life far more secure. Tax planning is a year-round process, and not just something that you handle when April rolls around.
You’ll avoid audits and other pain points when you have a plan for handling your taxes upfront. Something as simple as paying estimated quarterly taxes each year can help you avoid penalties and audits.
Strategic tax planning with a financial professional lets you avoid critical mistakes. These professionals often cater to specific needs – such as tax planning for small business or tax planning for lawyers.
Keep some money in a tax savings account so that you can always cut a check when the time comes.
Plan Financial Goals Alongside Your Career
You must be a visionary when it comes to planning your career and your financial life. These things coincide, so start setting clear and attainable benchmarks to strive for.
Set goals such as making partner or opening a firm of your own. This might also coincide with financial goals of having a certain amount of money in the bank, buying a home, or driving a certain kind of car.
Study the industry to always know what the best lawyers are earning. Find out which cities are the most in-demand and competitive in this field.
Attorneys in the Knoxville, TN area earn about $119,000 per year, according to median ranges. Trying to crack that upper percentile of earnings takes strategic planning and goal-setting.
Climbing this ladder opens you up to other career opportunities while securing your financial future.
Live a Growth Mindset
Finally, make sure that you’re never satisfied. Wealth and career fulfillment belong to people who continuously fall in love with their mission. There’s always something new to be learned and new financial goals to meet.
Psychologist Carol Dweck has made a career studying and teaching the “Growth Mindset”, which states that abilities and talents are learned through challenges and trials. This differs from a fixed mindset, which presumes that people are born with the talent that they have and max out at a certain point.
Live with a growth mindset so that you keep your mind open to fresh ideas and perspectives that can help you professionally and financially.
Handle Your Strategic Financial Planning
The strategic financial planning points above will set you on the right course. This foundation will help you check all of the boxes for your career while achieving your goals of financial freedom.
Bennett Financials has a skilled, amazing staff to help you with all your accounting needs. Take the time to contact us via our site, or call us at (865) 217-0244 for more information.