CHARLESTON -- The average graduate leaves law school with a doctor of jurisprudence degree and a minimum of $80,000 in related debts.

The National Association for Legal Career Professionals reports on its Web site that a new associate can expect to earn a starting salary of $67,500 per year, not including stipends to cover time dedicated to studying for the bar exam. Compared to other entry-level earnings, young lawyers appear to be in better financial shape than most, but reality sets in when paychecks diminish due to the burden of student loans.

If a law school education is financed in its entirety, an attorney can expect to dedicate at least thirty years of his or her life to a payment of $650 to $950 per month, which takes quite a bite out of an associate's monthly income.

"Generation Next" is known to live beyond its means, choosing homes and cars that are equal to, if not above, their parents' addresses and models. While trying to keep up with The Partners by day and The Joneses by night, young professionals find that the hardest part of their jobs is looking successful, but it is helped along by lines of credit. This is a dangerous move, warns Ann Vincent-Urling, Senior Vice President of Commercial Lending at Summit Community Bank.

"The biggest mistake I see young professionals make is rather than try to pay off their existing debt and start saving for retirement, or developing a small nest egg for the unexpected, they operate paycheck to paycheck," she began. "Then, when their refrigerator dies, they need a new car, they have to pay income taxes, etc., they are either using credit cards for these purchases or paying higher interest rates on personal loans.

The second biggest mistake is trying to move up to the next level of house before they are ready financially. Many times, they try to either rent their existing home, or sell it while they are buying the new home. Now, they're operating with two mortgages, as well as insurance and real estate taxes, and other expenses tagged to both pieces of property," Vincent-Urling explained.

Banks talk in terms of good debt versus bad debt, which leads many young professionals into thinking that student loans will not be held against them when they attempt to purchase first homes and higher-quality automobiles. According to Vincent-Urling, the good versus bad myth needs clarification.

"In my opinion, the definition of bad debt would be loans that you've taken out on things you don't need and can't really afford to splurge on, such as the four-carat engagement ring," she said. "Good debt would be anything that you really need, but can't afford to pay for upfront, such as a house. Just make sure you can afford those major purchases, and everything that goes along with them. No one wants to be car or house poor," she stated.

Newer professionals such as associates may be earning more money than their predecessors did, but a few thousand dollars per month can be exhausted very easily if responsible spending is not practiced. Financial planning Web sites state that the biggest sources of waste among the twenty-something population include daily visits to trendy coffee bars and nightly visits to other types of watering holes. Excessive consumption of the good life can eat a sizeable portion of anyone's monthly income, no matter what the earning potential may be.

"I recommend tracking your spending over a couple of months to identify where your money is going with respect to housing, entertainment, groceries, dining out, clothing, and transportation," Vincent-Urling continued. "Pay close attention to what the extras are adding up to during the course of the month. Watch the calendar and note special times of the years, such as holidays, vacations, weddings, etc., that may cost money. This will help you get a handle on where your money goes each month and where you might make some adjustments," she said.

Despite advice from parents and bankers such as Vincent-Urling, some new professionals still choose to dive head first into commitments a few years earlier than suggested. The new condominium, home furnishings, sports car, wardrobe, expensive date, and purebred pet can advance an executive into financial ruin, which means falling behind in monthly payments.

"Defaulting on student loans can be very detrimental to your credit," Vincent-Urling stressed. "This appears as a 'red flag' regarding your character, and you can end up with your wages garnished. Also, it should be noted that student loans generally are not dischargeable through bankruptcy," she said.

What is the bright side to owing so much when life is just beginning? Being able to plan for the ending, financial planners say.

"You are probably making more money than you ever have," Vincent-Urling exclaimed. "It is so important to pay yourself first, so after each paycheck arrives, put money toward retirement to give your account the maximum amount of time and potential to grow. It's far easier to start out of the gate putting money away than going back and trying to live on less."

For more information regarding debt consolidation or other types of consumer loans, contact Ann Vincent-Urling at Summit Community Bank at (304) 343-9200.

Brown is a legal marketing executive and managing member of a professional writing agency based in Charleston.

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