Let’s face it. Law school didn’t teach you much about personal finance and investments. The financial life of lawyers can be complicated. Legal finances are complex, and lawyers often don’t have skills and knowledge in this area to handle everything right. Upon graduating, you are thrust into a career with a huge student loan only to realize you have a second job: managing your finances. Below are common financial mistakes that lawyers are likely to make.

1.   Inadequate savings rate

According to Black Fin Internet Marketing, lawyers need to have a higher rate of savings compared to other people. This is because they start working late. A typical college graduate is expected to spend 43 years working while a lawyer might spend 35. A typical lawyer begins working late, which implies they start saving late. On top of this, lawyers have much bigger student loans due to the cost of law school and undergraduate requirements.

2.   Over-entertainment

Being a lawyer requires effort and commitment. Most of the time, you will work until late in the evening. Of course, after a hard day at work, you will want to play hard by unwinding with colleagues and friends in the evening. The problem is that you are likely to overdo it, and the impact on your finances will be undesirable. The best way to unwind after a hard day’s work is to go home and relax. You can limit entertainment and alcohol to weekends.

3.   Bad debt management

It is known that most lawyers graduate with significant debts. Being in debt can act like a financial downward spiral. To prevent such a situation from happening, ensure you set aside a percentage of your income for investments every month. Some excellent investment options for lawyers include bonds, mutual funds, stocks, and whole life insurance policies.

4.   Not realizing that money spent is money

You just graduated from law school and within no time you got a well-paying job with a  big law firm. Most recent graduate lawyers equate the good paycheck with a new found freedom and independence.  Your parents are no longer doling money out to you and you are no longer in the limited shape of financial aid, scholarship or allowances – it’s your own money. That sense of autonomy can result in reckless spending behaviors.

Paychecks create an illusion of financial security but it is how well you spend your money that will determine your financial wellbeing.

5.   Lack of a financial plan

What are your investment goals and objectives? What strategies will you use to reach your goals? You see, in order to succeed, you will need to have a clear financial plan. Such a plan will act as a guidepost for all your investment goals and a foundation for investment decisions.


Lawyers like to prepare and plan. But the question is, are you planning and managing your finances as well as you are for your next client meeting? Hopefully, these tips will help you take good care of your money and avoid the common financial mistakes that lawyers make.