The Money Confidante
PART 1 of 2
Wealth management can for many reasons often present a challenge for lawyers, especially female lawyers, and never more so than in 2021. Chances are you’re starting the year off on a different financial footing than you were this time last year, as 2020 altered the financial landscape for many, and required all of us to adjust.
Even if you haven’t personally experienced any financial losses or hardship, the last twelve months have thrown up so many challenges that our attention has been spread pretty thin. It would be no surprise at all if you hadn’t given your financial planning and wealth management the attention it needed.
This year will hold more challenges, and it would be shortsighted of us to think differently. While you’re dealing with changes to your professional life, to your social life, and to your family life, you don’t want to lose your way with your financial life. With just a little refocusing where it really counts, you can keep your money working hard for you. In this post and next week’s, we’ll talk through key aspects of what wealth management should look like for female lawyers in 2021.
It’s All Change For Lawyers and Financial Planning
While they may have healthy salaries, female attorneys are not people who are time-rich. Their work hours were already long and often unpredictable, and then 2020 really changed the working environment for many female lawyers by bringing the competition between work and home life to a new level.
Many lawyers experienced a decrease in work demand, and many partners have taken significant pay cuts. Bonuses have been cut, raises postponed. Others have been laid off all together due to firms needing to suddenly downsize to weather the storm. On the other hand, lawyers in some sectors saw a rise in demand thanks to the instability of 2020. For instance, sadly but maybe unsurprisingly, the demand for family lawyers surged in the middle of the year. Contract lawyers have been more in demand too, as have attorneys with employment practices.
Regardless of significant changes to the amount of work, female lawyers certainly experienced a significant amount of upheaval in the way in which work was done. The theme of 2020 was change, and women rose to meet the challenges. If your financial planning didn’t accommodate those changes, then you may well be seeing some disconnect now. And you know the best way of looking after your money while you have other things on your plate? Delegate.
Make It All Feel a Bit Easier - Delegate!
Accomplished women attorneys tend to get to their level of profession by excelling in their field, often by taking on a tremendous amount of work personally. With the added demands brought on by the pandemic, finances for many have become an afterthought.
There are many ways you can get help with your finances to make sure you’re steering the right course. Conduct a review of your circumstances with a financial planner or even just with your spouse or partner if that feels like a more comfortable first step.
Take thorough stock of your financial position. Look at your income against your expenses and ask yourself if you are using your money wisely. Could you curb spending in one area to bolster investments or savings elsewhere? Or could you spend your money differently to allow you to enjoy your free time more, enhancing your quality of life in the here and now?
Getting another opinion on your circumstances is always beneficial and serves to help you see where things could be improved. And, truth be told, having someone else involved holds us to account – and many of us need that.
Tax Season For Lawyers
Tax season is upon us, and this can definitely be a challenging time for lawyers. Once again, it’s about finding hours in the day that are often just not there . . . it’s one more arduous task to add to the to-do list, isn’t it? None of us want a higher tax bill than absolutely necessary, but we can miss areas to be more tax-efficient if we don’t give it the attention it deserves.
Consult with a tax professional, and make sure you’re making the most of your income and using tax-efficient savings accounts. Given the tax law changes the Biden Administration has proposed, now is an especially important time for high earners to reach out to your CPA for guidance. Ensure that you’re fully informed about things like tax rates and possible deductions, and any actions you can take to lower your tax obligation.
If you’ve not paid off your student loan from law school, don’t forget about student loan interest deduction. The added complication for 2021 is that student loan interest from federal loan agencies has been temporarily suspended due to the impact of COVID-19. You need to check to see if you have any months of interest accrued that could still be deducted this year.
Bridget Grimes is a financial planner who helps female attorneys live the life they want by having a plan for the four financial derailers.