As lawyers, we hate making mistakes, and we will work hard to avoid them. But we consistently make mistakes when it comes to money. This blog explains what those mistakes are and how to overcome them.

Disclaimer: The information in this blog is my personal opinion and experience and is not legal or financial advice in any way! Also, just FYI, this post may contain affiliate links. 

1. Thinking you’re too young to plan for retirement

So many of us pass responsibility for retirement planning onto our future selves.

Meet Jade. 

investment retirement saving

Jade recently qualified at a top 100 law firm. She is delighted with her massive salary uplift from trainee to NQ (probably the biggest one she’ll ever get) and wants to make the most of it.

She pays the minimum amount into her firm’s pension scheme. She thinks she’s too young to worry about retirement – there’s “no rush”.

Jade doesn’t understand the power of compound interest. If Jade were to save £300 per month from age 25 at an 8% annual return, by age 65 she’d have just over £1,000,000.

But if she waits until age 45 before making a start, she’d need to save a whopping £1,700 per month to make the same amount.

Solution: Retirement isn’t optional. Almost everyone will retire at some point. Don’t get to retirement after working so hard and have nothing to show for it. Aim to put away 15% of your gross pay into an index fund to start benefiting from compound interest.

2. Working hard with no end goal in sight

So many women are on an endless hamster wheel of work with no end goal.

Meet Julie. 

Female Lawyer Investments

Julie is a lawyer in a City law firm. She has worked hard her entire career and has always lived comfortably on her City salary. She is now reaching retirement.

She hasn’t saved much so she requests her pension statement. She is shocked by how little she is entitled to. She is now worried that she won’t be able to maintain the same quality of life after retirement. 

Julie had never given much thought to exactly how much income she would need in her retirement. She now regrets not having an end goal. She regrets that she has only ever used her salary to cover her current lifestyle, and has done nothing for her future self.

Julie was running a financial race with no finish line in sight.

Solution: Don’t start on a decent salary only to end up with a less than modest retirement fund. Set a retirement goal by envisaging the life you want. Then write down what age you want to retire and calculate exactly how much income you’ll need to live free from any money concerns.

3. Leaving money stuff to your partner

Many female lawyers are outperforming and out-earning their partners. But a surprising number of us still leave money matters to our other halves.

Meet Jodie.

Female Lawyer Investments

Jodie is a rising star in her firm. She is the “breadwinner” in her household and is motivated by the money she earns.

However, she feels that it’s not “her role” within the household to be assertive with money matters. She leaves all financial decision-making up to her husband. 

As a child, did you ever ask your mum for money only to be told to “ask your dad”? Women are socially conditioned to believe that men are responsible for money and that even talking about money is “unladylike”.

We often imitate the income habits of our parents. But our parents come from a different generational mindset. It’s time to rectify this crisis of responsibility.

Solution: Developing better financial literacy will improve your confidence. If you tend to shy away from investment decisions, consciously flip the switch. Start by following these 9 steps to take control of the financial reins.

4. Acquiring things rather than wealth

So many people drift along without a plan and end up acquiring more liabilities than assets.

Meet Jenine.

salary pay investment saving

Jenine is an Associate in her early 30s. She earns a decent salary. She has a nice car, lives in a nice apartment and treats herself frequently as a reward for all of her hard work.

On the face of it Jenine looks wealthy because she lives a luxurious lifestyle. She has lots of material things that represent her decent salary. However, Jenine has no savings, the car is on finance and she doesn’t own her home. 

Jenine has been acquiring things rather than acquiring wealth.

This often leads to a false sense of security: a feeling that you must be financially secure if you’re able to spend money on expensive things. But many of the things that initially feel like assets often result in accumulating bad debt.

Solution: Wealth isn’t about how much you spend, it’s about how much you keep. Start by understanding the difference between liabilities (things that take money out of your pocket) and assets (things that generate an income and put money in your pocket).

5. Rewarding yourself with materialism

We work hard and we treat hard.

Meet Sarah. 

shopping spending or investing

Sarah is a Senior Associate at an international law firm. For Sarah, law often means long hours, high pressure and demanding clients. Work is stressful. So, a few times a week, she’ll treat herself. Because she deserves it.

Sometimes the treat is a coffee on the way to work. Sometimes it’s a pizza for dinner. Sometimes it’s a new handbag.

Sarah gets a little boost when the treat arrives. But once that initial high has worn off, she goes back to feeling stressed.

Sarah doesn’t realise that her daily £4 coffee, weekly £10 pizza and occasional larger guilty treats cost around £500 per month on average. If she invested that amount in an index fund over 20 years she’d have almost £300,000.

Solution: We work hard and we deserve the occasional treat. But do you know what we deserve more: to retire happy, healthy and wealthy.  Start by making a budget and tracking your expenses. Then begin rewarding yourself with things that will actually improve the future you.

6. Having a law degree but being financially illiterate 

We are technical experts when it comes to legal stuff. But one thing that law school didn’t teach us is financial literacy.

Meet Cherelle.

financial literacy investment

Cherelle is a highly intelligent woman. She is a high performing lawyer and considered a trusted expert by her clients.

Despite her qualifications and expertise in law, she knows very little about finances. As a result, she doesn’t know how to invest her money to make it grow. 

Cherelle knows that financial education is something that she ought to invest in. But she finds the financial jargon daunting and can never seem to find the time.

She has started to feel anxious about the future because she knows she should be doing something with her money. She just doesn’t know what.

Solution: We can’t rely on educational institutions to teach us financial literacy. You must invest in financial self-education. Put yourself higher on your to-do list. Find time to appraise your finances, get financially educated and set financial goals. Make a start – today!

7. Saving rather than investing

We are often told that females are more risk averse than males – and lawyers are, by their very nature, risk averse professionals.

What does this mean for Jasmine (who is both female and a lawyer!)?

saving investing real estate

Jasmine is a hard working, sensible and detail-focused lawyer. She has been in a job consistently since the age of 16 and is now in her late 20s. She has managed to save £50,000 over the years. She keeps this cash in what she considers to be a safe place: her bank account.

Jasmine knows that her pot of cash is depreciating year on year because inflation is higher than the interest she receives from her bank.

However, when it comes to investing, she thinks like a lawyer. She is massively risk-averse.

She has friends who have invested wisely and made great gains as a result. But she is so scared of losing her hard-earned cash. Rather than investing it, she takes a greater risk: she leaves her money to lose value.

Solution: Saving means accumulating your money. Investing means making your money earn more money (with no additional effort)! Don’t let your risk-averse mindset hinder your financial goals. Spread the risk by diversifying your investments across property and index funds.

8. Not talking about money (and not asking for the salary you deserve)

Lawyers tend to find money conversations awkward. This often results in female lawyers being paid less than they deserve.

Meet Jennifer.

equal pay pay reviews salary

This week is Jennifer’s pay review. Like many female lawyers, she goes above and beyond in her role. However, she feels underpaid and knows she is paid less than her colleague, Michael (who is 2 years less qualified and doesn’t pull his weight).

Jennifer has also recently had a pay cut due to the COVID-19 pandemic.

Her line manager calls her into the meeting. He explains that it has been a challenging year due to the pandemic. He gives Jennifer a vague indication of the firm’s salary benchmark against competitors. He then tells Jennifer what her pay increase will be. He tells her not to discuss it with her team.

Jennifer informs her manager that the increase is less than she had hoped for. She also wants to tell her manager that she is underpaid compared to her colleagues. But she feel too awkward. So she accepts defeat, thanks her manager and leaves the room. Deflated.

Solution: Pay review conversations might be more delicate following COVID. But that is no reason to be paid less than your male counterparts or less than you deserve. Always prepare in advance for any salary reviews. Use logic and facts and be specific about exactly what you want!

9. Relying on only one income stream

Relying on one income stream (i.e. your salary) is a risky strategy in times like the present. But it’s a strategy that most of us (unconsciously) adopt!

Meet Amelia.

salary review investment get paid

Amelia’s firm has cut her pay and hours by 30% due to the COVID-19 pandemic. There are rumours of redundancies on the horizon so Amelia is nervous.

She has been meaning to save up an emergency fund for months. But other expenses always seemed to crop up and she struggled to budget.

She now only has enough savings to cover her living expenses for 2 months if she loses her job. She has no other income.

Amelia is in a risky position with no back-up plan. 

Solution: It is CRUCIAL that you build an emergency fund. You should also aim to create multiple income streams. This can include income from side businesses, rental property and index funds. Always aim to invest any profit you make and if you get a pay increase or a bonus, invest it!

10. Not taking care of your MOST important asset: You

investing saving

Have you ever noticed that people who are disciplined when it comes to physical health often have their act together in other areas of life?

Exercise is one of the most important habits you can develop to transform your life. Physical fitness can boost your memory, concentration and mental sharpness. But so many female lawyers neglect their health in favour of working long hours, poor eating habits and no exercise.

Good physical health takes discipline and perseverance – just like financial health. So taking care of yourself is important. This will harness the skills you’ll need for a secure financial future.

There is also a correlation between financial health and mental health. Of course money doesn’t buy happiness, but it sure reduces stress levels!

Solution: Prioritize your physical and mental health. Focus on getting a balanced and nutritious diet. Aim to get at least 7 hours sleep each night. Do at least 30 minutes exercise a day. The discipline you’ll learn through getting your health on track will soon be transferred to your pocket!

Help a sister out! Are there any other mistakes you see other female lawyers making? Let us know in the comments below or drop me an email

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