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Student Lawyer

Personal & Financial

How to Create the Best Money Strategy for Your Life

Rho Thomas


  • All of the so-called “rules” of personal finance are made up. They’re other people’s ideas of the best practices for managing money.
  • It’s important to question whether the money rules you come across fit your financial situation.
  • Don’t use what you see others doing to tear yourself down, make yourself feel less than, or take yourself off track from your goals.
How to Create the Best Money Strategy for Your Life

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The internet and social media make it easier than ever to access countless money rules and tips and see how other people use their money. But that ease of access also makes it easy to fall into the trap of allowing external sources to dictate how you use your money and where you should be financially—and this is one of the biggest mistakes I see lawyers make.

Let’s talk about why you’ll never get the best money advice from external sources and how to create the best money strategy for your life.

Why You Should Question Money Rules

We’ve all seen the personal finance articles that tell us we must save X percentage of every paycheck or that we should have Y net worth by Z age.

Says who?

All of the so-called “rules” of personal finance are made up. They’re other people’s ideas of the best practices for managing money.

I often see lawyers beating themselves up or feeling like they’re not doing enough when they’re not following all the personal finance rules they’ve come across, without thinking about whether those rules make sense for their situation.

It’s important to question the rules you think you’re supposed to follow for your finances. They may sound like great advice, but are they great advice for you?

When Following the Money Rules Goes Wrong

To underscore this point, let’s look at a common money rule that most people never think to question, along with some examples where not following it was a better strategy.

Many lawyers believe they should max out their 401(k) or other retirement account as soon as possible because that’s what they’ve always heard. Maxing out retirement accounts is touted as a responsible way to manage your money, and don’t get me wrong—it is. But it’s not the only way.

When you put money into most retirement accounts, generally, it’s tied up for decades. You can’t access it before you reach a certain age without paying penalties and taxes. In certain seasons of life, you may want that money available for other goals.

Many lawyers come to me with the goal of paying off their credit card debt, for example. When they have so much money going into their retirement accounts, they have less money available to pay off that credit card debt.

In an extreme example, one lawyer’s aggressive retirement saving had actually contributed to them having credit card debt in the first place. They had so much going into their retirement accounts that they didn’t have a lot of wiggle room with their cash flow each month.

When unexpected expenses came up, they covered the shortfall by putting those expenses on credit cards. However, because they didn’t have a lot of wiggle room, they didn’t have extra funds to pay off the credit cards.

The Math on Retirement Contributions and Credit Card Debt

If we look at the math, on average, the money in a retirement account would earn about 8-10 percent interest (the average stock market return). In contrast, credit cards typically have interest rates of 25–30 percent. Based on these interest rates, the credit card debt will grow exponentially faster than the balance in a retirement account. In many instances, the lawyers I work with have decided temporarily to decrease how much they were putting into their retirement accounts to pay down their credit cards faster.

My husband and I made the same decision during our journey to pay off almost $500,000 of student loan debt. Most of our loans were at 6.8 percent and 7.9 percent interest. When we looked at the details of our financial situation, we realized that the amount of interest accruing on that much debt was basically canceling out what we were contributing to our retirement accounts.

We decided to decrease our contributions to the amount needed to get my husband’s employer match and used the rest of the money to pay down our debt more quickly. Once we finished paying off the loans, we ramped up our retirement contributions.

Ultimately, the idea isn’t to keep your contributions low forever. It’s to recognize that there’s a balance. Yes, saving for retirement is important, but you’re allowed to pause or slow down on that temporarily when other financial goals are more pressing for you. It’s your money.

You Decide What to Do with Your Money

None of this is to say that you definitely should or shouldn’t contribute to your retirement account if you have debt. The point of these examples is simply to illustrate why it’s important to question whether money rules you come across fit your financial situation.

You get to decide for yourself whether to follow them, even if your decision goes against the mainstream or what some authority figure says. Don’t get so caught up in what someone else says you should do that you forget about your own authority in your life and your finances.

Don’t Fall into the Comparison Trap

Beyond the arbitrary money rules, many lawyers compare where they are financially with where they perceive the people around them to be. Although those people aren’t explicitly telling them what to do with their money, many lawyers allow what they see other people doing to influence what they do. There are a few issues with that approach.

First, when you look at what other people are doing and believe you should be where they are, you diminish your own accomplishments. The progress you’ve made feels like it’s not good enough. You start to focus on everything you haven’t done and keep thinking you need to do more or better, which is really discouraging.

Sometimes, that leads to working to achieve things you don’t even want. Other people are doing them, so you think you should, too. In other cases, it leads to doing nothing at all because you’re thinking you’re so far behind and feeling overwhelmed and paralyzed by where to go from there.

But when we look at what other people are doing, we often forget that it may not be an apples-to-apples comparison. The people you’re comparing yourself with may have different circumstances or be in a different stage of their financial journey.

You Lack Critical Information for Any Comparison

You have no idea how people are paying for the things you see them doing. We see what people want us to see, and more often than not, that’s the highlight reels. We don’t know what’s going on behind the scenes.

They could have saved for their purchases, gotten money from family, been given a gift, or gone into a bunch of debt. You just don’t know. When you try to keep up with what others are doing because you think you should be able to do those things, too, without knowing how they did it, you can put yourself behind where you want to be financially.

Don’t do it.

There’s no standard of where anyone should be financially at a particular point in life. There will always be someone who’s further along than you or has more than you, just like you’ll always be further along than someone else and have more than someone else.

Don’t use what you see others doing to tear yourself down, make yourself feel less than, or take yourself off track from your goals. It’s never a useful exercise.

Use Your Goals to Create the Best Money Strategy for You

So, where do you look if you’re not looking to personal finance experts and random people in your life for what to do with your money?

You look to yourself.

It starts with deciding what you want for your life and your finances. What goals do you have? What do you want to accomplish?

Starting with your goals will always help you create a better money strategy than arbitrarily following what other people say you should do or what other people are doing. The goals you want to achieve will dictate what you need to do with your money.

From there, you can determine whether the money rules you come across and the things you see other people doing make sense for you. You can question those external sources of advice and make sure the advice you take will get you to where you want to go.

Deciding your goals at the outset gives you a more useful reference point for your financial comparisons. Instead of comparing yourself to other people, compare yourself to yourself. If you’re closer to your goals today than you were last month or last year, you’re doing great.

Ultimately, the best money strategy for you is the one that leads you to your goals, regardless of whether anyone else agrees or would do the same.