Money Goals: The First Almost-Year of Work

An exciting bit of news: I'm starting my fellowship-ish in mid-July, about a month and a half sooner than expected! I've always been a bit coy about what exactly I'll be doing, because it'd potentially be bad for my anonymity: There aren't many Asian-American women leaving their New York firms for a federal court clerkship this year (though there's also no easy way to search for people based on those exact criteria, so my privacy is still relatively safe). It's an incredible opportunity, a near-requirement for certain types of highly sought after government jobs, and I'm so excited for this chapter of my career.

Because clerkships are government positions, I'm taking a large pay cut, one that makes it impossible to stay on the ten-year loan repayment track (monthly payment: $2200) while living in NYC and that will make those 12 months a bit of a "lost year" when it comes to building my savings. The clerkship salary numbers mentioned here don't include the added cost-of-living adjustment for judicial clerks in a few states like New York, but you get a very general idea of where I'll be. Financially speaking, I'll fix things a bit and hopefully get back on track by returning to the private sector and receiving a post-clerkship bonus to make up for those "lost months" of loan payments. 

To prepare for the impending change in my financial circumstances, I started 2016 with some fairly ambitious financial goals. Today, I'm reporting on how I did, now that I'm reaching the end of my first period of working in the private sector.

Goal 1: Save six months of expenses as an emergency fund. Success! My calculations for this goal are, I should mention, imperfect: I find it really hard to assess what my "emergency mode" monthly expenses would actually look in case of job loss or other disaster. I set the number at $15,000 and I met that goal around around late March, during tax refund season. I've since continued adding more cash to my savings every month.

Goal 2: Get on an ultra-aggressive (monthly payments totaling around 150% of my 10-year repayment plan monthly minimum) student loan repayment schedule. Postponed! Around the time I met Goal 1, I changed my mind about being able to meet this goal before my clerkship. The prospect of putting a relative stop to adding cash to my "emergency fund" savings account every month made me extremely anxious, so I delayed this goal. You can always put saved cash into your loans later, but you can't claw back what you already paid, was my thinking. Because the total amount of time I might eventually spend in biglaw is highly uncertain, I like the flexibility of having a bit more cash, so the aggressive repayment goal must wait. 

I am, however, generally paying a little extra to my student loans whenever I'm comfortable, so my actual monthly repayment probably averages out closer to ~$2500/month. I recently updated my current debt and repayment numbers in my handy-dandy debt reduction spreadsheet (obtained at another website), and I was surprised to find that I'm actually still ahead of schedule, on a roughly eight-year repayment track rather than a ten-year track, which is fantastic. 

(Implicit) Goal 3: Have some retirement savings. Check! This isn't too hard because I am contributing a percentage to my 401k every month, even if there's no employer match (fairly standard for biglaw attorney-types). I also had a random impulse and ended up putting just around ~$2000 into a Roth IRA for last tax year when I received my tax refund. The next twelve months will not be as easy for any of my still-undefined retirement savings goals, as I'm fairly certain that judicial clerks do not get access to a 401k or similar plan.