From the Multnomah Lawyer: Saving After Graduation: Don’t Let Short-Term Debt Overshadow Long-Term Savings

For most attorneys right out of school, the default thinking is all about paying down student debt. After all, the average law school student loan works out to about $300,000. With such a huge amount looming over one’s head, it is a reasonable assumption that any and all discretionary income should be diverted toward paying down that debt.

However, such action is not always the right way to go. In fact, developing a strategy for long-term savings - along with embracing fiscal discipline – is most often the preferred course of action for young professionals. In other words, the destination for the extra money you have at the end of the month does not have to go exclusively toward paying down debt.

The transition from living frugally during school to suddenly experiencing the freedom of a sizeable paycheck can often lead to fiscal confusion. As such, it is critical early on in one’s career to find a group of trusted advisors to help set a financial course. A banker, CPA and financial advisor are going to become critical partners throughout one’s career, and much of their valuable counsel is going to center around a savings plan that prepares for the big life goals ahead such as buying a home, kids, buying into a firm and retirement. Additionally, having emergency savings in case of job loss or other factors must be considered.

While much of their counsel will depend on individual circumstances, we find that a common, and very prudent course of action most often prescribed for a young attorney, is to put money in some kind of savings vehicle first, even before sending a check toward the pay down of student debt. Now of course, we are not recommending that one completely forget about that sizeable college loan, far from it. It is an obligation that must be met.
We are simply making the case that the time horizons for your student debt and your career savings plan are much different, with the latter being so much longer and more important long-term than the former. So if one has an extra $200 at the end of the month, it makes sound fiscal sense to devote a majority of that pot of money toward savings and the minority toward paying down student debt. You can structure payments towards student loans to accommodate your income and eventually you will retire the debt. However, the savings you put in place now - no matter how small - will continue to feed your life and career goals in perpetuity.

It’s a cliché, but nevertheless an important statement that all attorneys should heed: “It’s never too early to save for the future.” Paying off your student debt is important, but saving for the future is vital. For most pros, the short-term pain of paying off student loans is greatly eclipsed by the security and prosperity derived from a sound and sustainable lifelong savings plan.

Elise Bouneff is Senior Vice President and Relationship Banking Officer for Columbia Bank. She can be reached at

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