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My budgeting is like this:
Rent: 40 K
Grocery: 8 K
Maid: 4k
Cook: 8K
Electricity: 2K
PNG Charges: 0.3 K
Commute: 10 K
Overhead: 10 K
Internet + Netflix and other OTTS: 2.5K
I am a recluse and don't socialise much. If you are a party person, add 15 k to 20 k on top of this.
This is very very true. People who have money start thinking spending greater money equates to a greater experience. That USD 200 wine is going to suck if you brought because you were too rich for Sula rather than an actual interest in wine. Heck, usually the best experiences are free. I learnt this the hard way on a beach destination: I paid a fortune for a very underwhelming sunset cruise. Borrowed some goggles from hotel and went snorkeling off coast next day, and that was the best thing ever.
- build credit history, didn’t say rake up credit card bills you can’t pay off every month. Always pay off in full (failing to on a couple of occasions over 24 months is not a crime)
- not coming from a position of privilege. Invest in these things for first 2 years so you can better take care off your dependents, debt obligations etc
- SAVE - cut out Netflix and all OTT (10K), smoking (350*365 = 130K), zomato (100K), useless media subscriptions (20K), gadgets (buy a iphone, you don’t need a tablet or a gaming PC or a console) (80K), impulsive online shopping (60K). And voila you saved 4 lakhs in your first year.
- Staycations are a massive waste of money. Also please consider the environmental impact of your frequent and largely unnecessary weekend ‘getaways’.
- DO NOT - play poker, gamble, bet on sports. If you do, then you neither respect your time nor money.
- if money is still becoming an issue, don’t hesitate to ask for an interest free 3-4 month salary advance. Tell your employer you need to put down a lease deposit.
- You won’t spend big forever. Keep your spending same as you progress from A0 to A3.
On the ‘immediate need’ to shoulder expenses and family debt. Unless your family house is about to be repossessed, stop deluding yourself. You are fine. Your small A0 savings earning 2% interest (after tax) in your new age digital bank account with a flashy mobile app won’t last to see you save the world from climate change even if you ate only avocado toast everyday.
Go read. Weak people make excuses.
Including bonus only it isn't that much.
Let's look at each piece -
The 1st 6 points can be summarised into - "Dont Save Spend" - Law firms want you to do exactly that. If you do not save in your initial few years, there is no way you can take a risk in your mid to late 20's if you so desire to do so. You will get into a spending cycle and I guarantee it's way easier getting used to more than used to less and next to impossible to get used to less when you are used to more. For most people it's not a switch that they can throw on and off when they feel like it. As people have pointed out, some people have families to support and loans to pay off. Not everyone can and should live like what the Tier 1 Partner suggested in their early 20's.
"Network with non-lawyers" - This is actually good advice. Network constantly with non-lawyers. But also network with non law firm lawyers. This will be your network in the future for referral work. The practical challenge for an associate (of any level) with this advice is, when? Where is the time? As an associate in most firms your fate is dependent on how much you work and your quality of that work. Especially in the first few years of working, your quality will oscillate wildly on the basis of many factors outside of your control (quality of instructions, reasonability of client, overall work load and a boss/mentor/supervisor who actively trains you so that you become better). Given such large variables and the systemic problems that associates face, where in the world do they get the time to network so extensively. Also, I don't understand this 'paying for drinks' business. Most clients in the future insist on paying for 'your' drinks, not the other way around. I think this is some overrated ancient wisdom which does not apply anymore. No one got a client because he paid for their drinks.
Last point was about restaurants and vacations which I would summarise more kindly into "have experiences and be interesting" - This is also fairly decent advice but not in the way the original commenter imagines. You dont need to go to expensive restaurants and spend lavishly on luxury destinations to have experiences and be interesting. Your personality is a sum factor of your past experiences and your current circumstances. If you are inherently an interesting person, your most mundane 'experiences' can be interesting as well. If you are uninteresting or uninterested, you can be sitting in Rome or Paris at the louvre and you won't suddenly become an interesting person. Work on your personality yes, don't buy into the story that you need to spend money like a fool to become interesting. I have spoken to T1 partners about their trips overseas and their only feedback was 'bc transport and booze was too expensive'
However, some of the things he said, I would like to state my views on them:
1. Saving when you're an A0 really does not amount to much. 30% of your salary at a Tier 1 firm will be 30-40k and it really isn't a large sum of money in the larger scheme of things. Don't feel too bad if you aren't able to save money, and infact do spend on yourself. Honestly, saving money makes a lot of sense after you're an A3-A4 because 30-40% of your salary is a much larger number. The only downside to this is saving is a habit that one needs to develop. Even if you do spend all your salary as an A0, my advice would be to ensure that your expenses do not keep going up as your salary increases. My expenses are similar to what I used to spend as an A0, however, my salary is significantly larger, so I'm doing quite okay in the savings department.
2. Do not ever use credit on a credit card. Ask your friends, parents, whoever for money but do not pay CC companies interest @ 30-40% p.a. If you do are not in a position to borrow from friends, parents, etc., and a necessary expense still arises, please apply for a personal loan from a bank but again DO NOT USE CREDIT ON A CREDIT CARD. Having said that credit cards are useful and you get great benefits and discounts as well as help build your credit profile (very useful while applying for a housing loan later in life), however, ALWAYS pay your bill in full every month.
3. Do buy your peers lunch and a round of drinks. Corporate law is 40% about the law itself, and 60% about people giving you the opportunity to advise them on law. To be a successful lawyer, you do need to be social. Your peers, your clients. your friends and their friends, could have a significant role to play in your career. Buy them lunch because it's a nice thing to do, and people remember stuff like this. However, it's not as important as 1.3 makes it out to be because most people aren't that shallow, and I personally do not judge people on how many times they've bought me lunch or drinks. Still, please do not be the guy that racks up a bill at a restaurant or bar and then mysteriously disappear when it's time to square up. It's unethical, a stupid way to save money, and I personally find that to be a negative character trait and it does often play a role on the first impressions I form.
Having said all of this, I fully acknowledge that I come from a position of relative privilege, and I had no educational loans to pay off, and my parents were not dependent on me. If you do have obligations, I respect you as will your colleagues and peers, and empathise with you, and I just want to say that law does pay quite well compared to other professions and you'll do fine in the long run.
Btw I shared a room…
And what happened to the age old wisdom that you are never to wear clothes as expensive (and God forbid costlier) as what your Partner wears ? If you have that kind of money the better place for you is Counsel practice, where you can sink in years worth investment with zero assured income.
55-57 K for a month is average for comfortable living. This was my average monthly expenditure chart in 2019-20 as an A0 (APPROXIMATELY).
35K - Rent for a bedroom in a decent 2/3 BHK apartment, near to office.
4-5K - Daily travel - cabs.
4K - Bai.
6K - groceries and household expenses, laundry.
2K - Electricity + Wi-fi.
5-6K - eating out, drinks, etc. (this is highly variable)
You're also speaking from a place of extreme privilege: not A0s can afford to maintain this lifestyle, many of us have families to support and loans to pay off. You're basically penalizing those whose families didn't have spare cash to pay fees upfront.
At today’s salaries Amarchand pays you 1.5 lakhs a month. It will be a tight squeeze but manageable. Defer loan payments to later. Take a couple of credit cards and start building a credit history. Top quality clothes / shoes easily last 5 years.
There’s always time, I sadly procrastinated and whined a lot. 3 hours a week to workout is not tough. Stay close to office to save commuting time.
- R
Don’t use your first 12 /24 months salary to invest and save. You need to give a fair shot to the law firm life before deciding that it is not for you. If it is not for you, two years’ savings aren’t going to help you over 35 years more of working life and 70 years of life. How do you give it a fair shot?
- Live in a luxury condo. You would want to invite your partner, seniors, peers and juniors and hope they come at least occasionally. Pay attention to decors, have a good bar and lighting. You need to impress whenever you get the chance.
- Dress sharp. Buy only the best in clothes and footwear. Boys buy suits and ties that your partner buys. Girls buy proper formal western wear or wear a saree. Again follow the brand your partner or a well turned out partner shops at.
- Pay very close attention to grooming. Your hair, nails everything matters in a professional services business. Good looks matter especially to create a perception in a brief meeting, it’s the shortcut human mind uses.
- Don’t be a cheapskate. Buy everyone drinks and occasionally even lunch. Don’t worry about reciprocity. Everyone admires generosity. People may even be slightly kinder when you mess up ( which you will).
- Rather than buying a car, take Ola / Uber to work but go in a luxury car everyday. You will stay close to office so it won’t be more than 1500/day.
- Workout 2-3 times a week. Good clothes don’t look good on a beer belly.
- Network with non lawyers. Buy them drinks, build long term relationships with a genuine interest in their lives. They could be your future clients. Be moderate with your own drinking, your health is obviously important.
- You can now afford many restaurants that you couldn’t in college, sometimes even expensing out to the client. Be careful with your diet and stay in good shape.
- Take an offbeat but luxurious vacation once a year. Figure out how expensive hotels, cars, restaurants work so that you don’t look like a fool if and when you go on a firm retreat / travelling for work.
- Have stories to tell from vacations you have gone to. Partners need to win work and have impressive personalities.
- Invest in experts. Therapist, PT trainer, CA, GP, a cook who can give you healthy homemade meals - whoever you need.
Why is all this relevant for an A0? Because you learn these things over years. You can’t acquire clients overnight. Or a personality.
You are carving a niche for yourself in an incredibly competitive world which to, make matters worse, is a small, mostly closed community. It will be tough but it will be worth it. If you are afraid of hard work or reconsidering your choices because the world has faced a pandemic, I suggest you take up a less taxing career and don’t bother at all. No one is going to supply the passion, determination and gumption you need on a daily basis.
Coming to the question: 30k-32k for a single room in a shared flat in Lower Parel, around 3k for basic provisions/ veggies, 3k/3.5k for cook/maid. Weekend expenses depend on how much time you get and where you go.
Bombay is the most expensive place in the country. If you want to cut down on expenses without comprising on luxury, shift to Delhi/Gurgaon/Noida
1. Rent would be between 30-40k for one person, in a one bedroom in a shared apartment. You may need to fork out more if you plan to live on a studio.
2. If you buy ready-made meals, maybe INR 600 a day (all veg and again a very loose figure).
3. Public transport would be very cheaply priced. Ola/Uber - depending on your location. Anything between INR 200-500 per trip assuming no surge pricing.
4. Laundry, maid etc - INR 5000-ish. Electricity bill will offset you by another INR 5000 (again super ballpark, assuming you switch on the AC for about 10 hours a day).
5. Restaurants - INR 1000-1500 per person per week (unless I’m Rip van Winkle and I’ve forgotten prices in Mumbai).
I hope you’re able to save enough money. Budgeting is definitely required..even for those working at a tier-1 law firm.
1. Basic decent 1 private room with AC (in a shared flat)
2. 3 good meals a day (1 meal non-veg)
3. travel by public transport and cab on exceptional days
4. Other costs like cleaning, laundry, dish washing (domestic help).
5. Going out once a week to restaurants.
You can save 80% of your salary if you survive on kauva biryani and vada pav, buy your clothes at cantabil, travel by local train and drink Smirnoff. But know that you will be judged and will not progress beyond SA.
Have it everyday.
To all those who have their offices situated in Lower Parel/Kalaghoda, I would really appreciate if you guys could please share your estimated budget in terms of food, travel, rent...
Thanking you in advance.