By Financial Adviser Hannah Meikle and Andrew Nuttall
In our experience working with legal professionals over the years, we’ve noticed that while they are often high earners, they sometimes struggle to translate their income into genuine financial security and freedom. This freedom allows them to make choices and decisions – whether that be retiring early or taking time off to travel or care for family – without stressing about the financial impact.
For lawyers aiming to secure their financial future, we recommend focusing on several key areas:
- Cash Flow Management: Everyone should develop and adhere to a realistic budget – no matter how much they earn. A budget eases the stress of uncertainty and helps ensure that extra income is invested or spent wisely.
- Emergency Preparedness: Ensure you are well-prepared for financial emergencies. This may be an unexpected expense or an inability to work for a period (whether from illness or otherwise). In addition to having adequate insurance, it’s crucial to maintain liquid, accessible funds. Having a financial safety net can provide peace of mind and stability during challenging times.
- Retirement Goals: Aim to reach a point where continuing to work is a choice rather than a necessity. Achieving this requires setting clear financial targets and consistently working towards them. Start by defining what a comfortable retirement looks like for you, including your desired lifestyle and potential expenses.
- Debt Control: In our experience, it is common for lawyers to take on large or multiple mortgages and they are often still paying off debt well into their 50s or even 60s. High-interest debt can be incredibly detrimental to a person’s ability to build wealth. Actively managing and reducing debt is key to building genuine wealth.
- Focus on Your Goals and Values: Achieving financial freedom means being able to make choices that allow you to enjoy life. Define what your overall values and goals are and ensure that your financial decisions align with them. Without this structure and focus, people tend to make sporadic or impulsive financial decisions that don’t contribute to their long-term objectives.
Ultimately, achieving financial security as a lawyer involves taking a well-rounded approach to money management. This ranges from everyday budgeting to strategic planning for retirement and beyond. A comprehensive plan not only helps to ensure financial security but also allows you to focus on your career and personal life with the peace of mind that your finances are in order, and you are on track to reach your goals.
Hannah Meikle is a Financial Adviser and a retired lawyer.
Andrew Nuttall is a Financial Adviser who has worked with members of the legal fraternity for over 30 years.