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.