Angela Vorpahl: Hey guys, welcome back of
my channel.
I'm Angela Vorpahl and in this video we are
going to be touching on the very taboo topic
of money, but not just touching it, making
full on contact because I'm going to share
with you guys the income and expenses that
I had in two very different jobs, in two very
different sectors, in two very different geographical
locations right out of law school, to give
you an idea of what you can expect in your
first jobs out of law school and also what
the income expense ratio is in different parts
of the country in different legal sectors.
I was sort of hesitant to post this video,
but I figured that on the off chance, it helps
give somebody insight into the legal industry
job market or plan financially for their future,
that it would be worth it.
So if you're excited to dive in, smash that
like button and let's go.
Angela Vorpahl: I'm going to show you guys
a comparison of my income and expenses for
a month when I was a federal judicial clerk
in Dallas, Texas and a month when I was an
associate at a law firm in New York to give
you just an inside glance into what a typical
month might have been for these two very different
jobs, two very different locations.
When I graduated at law school in May of 2011,
took the bar in July of 2011 and started the
clerkship right away in August of 2011.
The clerkship was for a year, which is pretty
typical of clerkships.
Some clerkships last two years depending on
the judge, but this one was a year.
Angela Vorpahl: In Dallas, my yearly income
as a federal clerk was $66,000, and I went
back and looked at my tax form for that year
and my federal, state and city taxes were
18%, which meant that my in pocket income
for the year was $54,120, which meant that
my yearly in pocket income was $4,510.
For rent, I lived in a pretty spacious one
bedroom apartment in central Dallas, not uptown
or downtown, but very accessible.
Really, really liked the place.
Shout out Tonti Lakeside Apartments.
I paid $950 a month.
I paid $66 a month in utilities, light, gas,
water, internet.
My cellphone bill was $117.
Angela Vorpahl: Transportation, which really
just meant filling up my tank of gas twice
that month was $88.
Big purchases were 485.
I made this category for things that weren't
normal monthly purchases.
Things like buying a piece of furniture or
maybe getting tickets to a show that I wouldn't
normally buy on a monthly basis.
And then I have an everything else category,
which is kind of a free for all.
And that is obviously the biggest category.
I spent $1,640; and that things like groceries,
laundry, if I needed to go to the pharmacy
for something, if I bought lunch or bought
dinner, any household items, and if I went
out at all, so entertainment.
Angela Vorpahl: And just a caveat, to let
you guys know, I don't think I cooked more
than three times that year in Dallas.
And so, pretty much all of my lunches and
all of my dinners were bought out.
So, take that into consideration for that
particular price item.
And that brought my monthly expenses to $3,346.
And at the time I wasn't really budgeting,
I was doing sort of retroactive budgeting,
meaning I wasn't...
I knew I was making enough money to pay for
all of my expenses.
Angela Vorpahl: And so, I didn't really have
to hold back on anything, but I did want to
see how much I was spending versus how much
I was saving.
I didn't go by a specific formula or anything.
But I did recently hear about the 40/30/20
budget plan with 50% of your monthly income
going to things you need, 30% going to things
you want and 20% going to savings.
And so, I just wanted just some sort of benchmark
to see what that percentage would have been
for my time that month in Dallas.
My expenses were almost 75%, with savings
at 20.
So, 74-26, 75-25 split.
Within that, someone's idea of what a budget
should look like.
Angela Vorpahl: A couple of things to note
on the Dallas side.
Texas doesn't have any state or city income
taxes.
And so, this 18% up here is purely federal.
That is a bonus feature of living in a state
that does not have those additional taxes.
Another thing to note on the expenses side
is that I don't have a student loan monthly
payment, and that is because I actually got
a full ride scholarship to law school.
And so, the only money that I owed was money
I had borrowed from my parents and wound up
paying them back within the first few months
after graduation.
Angela Vorpahl: So I don't have...
I was very fortunate not to have that as a
monthly expense, but if you are coming out
of law school, for most people, that is absolutely
something that's going to have to start being
paid back almost immediately.
So keep that in mind.
And so, yeah.
So that's Dallas, that's federal judicial
clerkship.
If you guys have any questions about the clerkship
or the payment or my expenses or Dallas or
anything like that, leave them in the comments
section below and I'll be more than happy
to answer them.
Angela Vorpahl: Moving on to New York.
This was July, 2013, and keep in mind that
I came in as a second year associate.
I actually don't know if I told you guys that,
but if you get a clerkship, most law firms
will consider that as your first year at the
firm.
So they don't dock you a year, you come in
as a second year associate in terms of salary
and in terms of seniority.
And so, you don't lose any years towards your
partnership path.
So that's a bonus as well.
That year I made $192,000.
That amount would have been for a second year
associate.
It would not have reflected the clerkship
bonus, which they would have paid me in 2012,
the year before.
Angela Vorpahl: The taxes for federal, state
and city were around 30%.
So, much higher.
New York has both state and city taxes.
Just another point to keep in mind.
It's as you can imagine in lots of ways very
expensive to live there.
And then my yearly income after taxes taking
out that 30% is $134,400 for the year in hand.
And so, that means I had $11,200 to spend
in any given month of that year.
My rent that I paid for a small studio apartment
near Union Square, which I absolutely loved,
was in love with that apartment.
I paid $2,300 a month for it, which is definitely
high.
I mean, it's New York high.
Angela Vorpahl: But it's also pretty standard
for the area.
But there are absolutely more affordable options
in New York.
You can live in less expensive neighborhoods.
I recently spent a month in Harlem, loved
it.
There's of course Brooklyn.
The further out you go, Queens, Astoria areas,
you have Upper East Side, lots of different
neighborhoods where you can find more spacious
places for less money.
That's what I opted to spend, and I don't
regret it.
It was a wonderful apartment.
Angela Vorpahl: The utilities.
I looked back and they were $55, which actually
surprised me.
It was definitely a much smaller space than
my Dallas apartment, but I was still surprised
that it was so low.
I tended to remember it being more expensive,
but the numbers don't lie, I guess.
My cellphone bill was $88 and it was lower
because the firm actually subsidized our cellphone
bill a little bit, some percentage, based
on the rationale that we were using our work
emails on the phone and so they decided to
compensate us for that.
Some firms actually give you a totally separate
phone.
I have to say that having everything on one
phone is much more convenient and you aren't
connected 24/7 but you're going to be connected
24/7 to work anyway even if you have two phones,
so one phone is definitely preferable.
Angela Vorpahl: The transportation expenses
that month were $145, which would have been
reflected in an unlimited subway or unlimited
metro pass, which I think was around $115
and then about $30 more on taxis that I spent
for that month.
Big purchases were about the same, $540.
One thing I will say is that I'm a huge fan
of buying home decor items, which I was able
to do a lot more of in Dallas because I had
more space.
And in New York it was such a tiny apartment
that there really was nowhere else to put
things.
And so, I was forced to restrain myself to
that, could be reflected in less money than
I otherwise would have spent.
Angela Vorpahl: And then the everything else
category actually surprised me.
I spent $1,030 that month, which I would have
expected it to be much higher.
I actually went back and looked at a couple
of months before and a couple of months after
and they were around the same.
The only thing I can think to attribute it
to, I should say, is that groceries, food,
going out is definitely, definitely more expensive
in New York than it is in Dallas.
But I wonder if maybe I was going out a lot
less in New York because I was working so
much.
Maybe that could have been part of it.
Angela Vorpahl: The other part of it might
have also been that a lot of law firms in
New York will pay for your dinner if you are
working past a certain time.
So I think our informal time cutoff was like
8:30 or 9:00.
If you're going to be working past then, then
you can buy dinner up to $35, at least that
was the practice back then.
And so, that could have been attributed to
the fact that I wasn't buying as much food.
That's a possibility.
But I do have to warn you that number surprises
me a bit.
But nevertheless, there you go.
Angela Vorpahl: And so, my total monthly expenses
were $4,158, about $800 more than Dallas.
Again, you would need to take into account
what you're willing to pay for rent.
Also, any student loan debt that you're going
to pay off.
And so, to do the percentages, just to get
a sense, my expenses were 37% of my monthly
income and my savings, or 63% of my monthly
income.
Obviously a ton more just based on the income
itself.
Angela Vorpahl: One of the things I will reiterate,
which I mentioned in another video that I
made called the truth about a big law firm
salary, is that the best decision I ever made
when I started working for a law firm is that
I, depending on your point of view, but I
spent relatively modestly much less than I
in theory could have.
And the result of that was that I was able
to save a ton of money and I was able to make
myself financially independent and I didn't
need the job to make ends meet.
Angela Vorpahl: And again, my largest expense
as you can see was rent, which I could have
obviously cut down even more.
I could have gotten a roommate if I needed
to and if I had to have, I absolutely would
have to still have maintained that financial
independence because it really allows you
to do anything.
It allows you to change jobs as long as you
were to leave the legal industry altogether.
It allows you to be able to start a family
without thinking twice, to start a new business
without thinking twice.
Angela Vorpahl: And so, it really does make
a huge difference as opposed to a lot of the
associates and colleagues I was working with;
felt like they had to stay, felt like they
were stuck and that they couldn't leave.
Not only because of student loan debt but
also because of the house or apartment they
had purchased or the schools they had put
their kids in or the high ticket items that
they had become accustomed to.
So, keep that in mind.
Angela Vorpahl: But anyway, here are the numbers.
Let me know in the comments below if you guys
have any questions about New York, about Dallas,
about how much I spent, about how much I made.
I like to consider myself an open book, so
I don't think that I've had a question yet
that I wasn't willing to answer, so don't
hold back.
And yeah, I hope you guys enjoyed this deep
dive.
It was fun putting it together and sort of
reminiscing on old times and that's it.
I hope it was helpful.
