Lawyers spend so much of their time protecting, allocating, litigating over, and negotiating with other people’s money, yet many of those same lawyers treat their own finances with a lack of care bordering on negligence.

What’s the biggest financial problem young lawyers have?

They’re so focused on the debt, but that’s one of many things they have to address. It’s not small debt — it’s huge. Putting every single dollar into paying student loans is just not realistic, because they’ll lose their greatest asset: they have time. It’s about cash-flow planning. They have a limited supply of cash flow and they can’t always earn their way out. You’re a contract lawyer and you’re making $40,000 in New York City — that’s doesn’t go far. There are four things you can do with money: save, invest, reduce debt, and spend. You have to do all four at once — you can’t focus on one. Lawyers have got to get spending down so they can reduce debt but at the same time invest. For example, over long periods of time, growth-focused mutual funds have generally outperformed the interest rate on student loans. If you’re a 25-year-old attorney, it’s worth putting in even 1 to 2% of earnings into your 401k.

What about lawyers making more money in big firms?

What I’m fighting is houses and cars. They want to buy a house in New York City, it’s ridiculous. They say, “I don’t want to live in New Jersey.” But it competes with their ability to pay the debt off. I get them to see they have a limited supply of income. They have to look at the next 15 to 20 years. What happens when you get married? When you have to put your kids through college? I try to give them a scare.

Are lawyers really worse as money-managers than many of their clients?

Yes, and they should know better. These people are incredibly smart. You can’t get through law school being an idiot. But you’ve lost all sense of being practical. This generation of lawyers needs to save more than the previous one. What if you don’t get a social security check [after retirement]? They want to buy the suit, get the car, the house. They say, “Oh, I’m sick of throwing away money on rent.” You’re not! You don’t have to replace 22 windows at your home. A lot of times I’ll talk them out of houses. It sounds so anti-American. But it’s the repairs that kill them.