152 | How Danesha Learned to Manage Her Money on a Clerkship Salary

My client Danesha was about to transition from Biglaw to a clerkship. She realized that the way she had been handling her money wouldn’t work with her lower salary, so she reached out for help.

During our time together, Danesha learned the money management skills she had been lacking. But more importantly, she shifted her money mindset and improved her relationship with money overall.

In this episode, Danesha and I talk about our work together, including the mindset shifts she’s had around her money and the various fun things she includes in her budget.

• Danesha’s money story before coaching
• an ineffective money strategy Danesha was using before we started working together
• how Danesha’s money mindset has shifted through coaching
• how Danesha feels about her ability to manage her money at different salary levels
• adjusting Danesha’s budget when her clerkship salary was lower than expected
• how Danesha spends on her nails, hair, eyelashes, and shoes, even with a lower salary
• how Danesha’s view of failure with her finances has shifted
• the importance of learning to be flexible with your money plan
• Danesha’s plan to make sure her rent was covered during her clerkship
• Danesha’s words of encouragement for anyone who feels like they don’t know how to manage their money

Episode 121: Preparing for the Expected

If you’re ready to learn the mindset and strategies to master your money, let’s schedule a call.

You’re listening to Wealthyesque. We are a community of lawyers who believe that true wealth is having control of our time. I’m Rho Thomas, and as a busy wife, mom, and former Biglaw associate, I know all too well the tension between the culture of the legal profession and pretty much everything else you want to do in life. That’s why each week, I’m bringing you the information and tools you need to improve your money mindset and manage your money to create true wealth. Because ultimately, it’s not about the money. It’s about the freedom and flexibility the money affords.

Hey friend. Welcome back to the show. I hope you’re doing well and having an amazing day so far. Today, I am introducing you to my client Danesha. Danesha came to me when she was about to leave big law for a clerkship, she hadn’t paid much attention to managing her money to that point because of the amount she made. But she wanted to learn how to actually manage her money and preparation for her new role and lower salary. She got that and so much more in our time together. And I know you’re gonna love hearing about how her mindset has changed, and some of the fun things that she includes in her budget. So let’s dive in.

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Rho
Welcome to the podcast Danesha. How’s it going?

Danesha
Good. How are you today?

Rho
Doing? Well, thank you. So for everyone listening, Danesha is one of my clients. She is a judicial clerk. And she came to me as she was transitioning from big law into her clerkship. So we are going to dive into that whole story. Because I think it’s interesting when you’re making a move like that, and you’re learning to get your finances in order at the same time. But before we do, tell us a little about your money story before you started coaching.

Danesha
So I would say that when I graduated law school, and I went straight into big law, I would like listen to podcasts, about finances, read books about finances, and kind of just like get general knowledge. So I like split up by paychecks into different bank accounts. I automated my savings, and I was tracking my spending. But I was doing nothing with that information. So I was doing nothing in particular. And I felt like I needed a plan specific to me going into a clerkships specifically, because coming out of big law, I was nervous about taking a pay cut, and how I would adjust financially. So I had some tools, and I wanted more tools.

Rho
Yeah, and I will say, when you first came to me, and we were going through your finances and all that you had a lot of really good stuff in place. And I think part of it for you was like honing it in, like you said, getting the specifics for your finances, and making sure that the tools that you were using, you’re using them in an effective manner.

Danesha
Yeah, I started tracking my spending probably like two or three years ago. But like I said, I wasn’t doing anything with that information, I would kind of track it. And then at the end of the month, summarize it, but there was no looking back at what that actually meant. Or looking forward to, if I should make adjustments or anything, it was just the fact that it existed. And nothing further.

Rho
How would you say you were feeling about your money at that time? Because you had these tools at your disposal, you were getting a lot of information about your finances, but you said you didn’t know what to do with it. So how were you feeling at that time?

Danesha
I think before I got the offer for my clerkship, I wasn’t really thinking about it. I didn’t have feelings about it. And then as soon as I got the offer for my clerkship, I was immediately stressed out because I knew I needed to make a change based on a salary change, but also to hopefully after the clerkship have better tools. So I was immediately stressed.

Rho
Well, and I think that a transition like that can be stressful for anybody, right? Like you’re making a change. You’re used to living life in this way. And now it’s like, Oh, hey, after this date, it’s gonna change, we’re gonna do something completely different. And so you didn’t know what to expect, you know, coming into the clerkship. And then on top of that, you were saying that you didn’t quite know what you were doing with the information that you had. So talk to us about your experience with coaching and like what you’ve gotten out of it.

Danesha
Because I did have some tools, what was important to me was coming out with something specific to my financial situation, because books and podcasts can only speak generally, about what things are probably good for you. So I was kind of listening and reading, taking those things into account. But because I was in big law, I didn’t necessarily have to pay as close attention to my finances, because I was making a lot of money and getting a pay raise every year. So I just didn’t have to be mindful of it. And I knew that would not be my situation going into my clerkship. And so in coaching, we talked a lot about, firstly, my mindset, because I remember the first time we talked to you kind of asked me, How did I think I was with money? And I don’t know exactly what I said, but I’m pretty sure it was somewhere along the lines of like, not good, terrible, something like that. And you pointed out the things that I was already doing, that were beneficial to me. And then we just kind of spent the time focusing one my mind on not being as stressed, and then to just reshaping what I was doing on a weekly basis on a monthly basis, and actually delving into what the numbers of my finances meant, and not just tracking them for the sake of tracking.

Rho
Yeah. You had an experience similar to I think many lawyers, I think a lot of lawyers can relate to your experience in terms of your mindset. And it being like, No, I don’t know anything about money. I don’t know what I’m doing at all. And I’m like, you don’t know nothing. Look at all of these things that you’ve already accomplished. Look at all these things that you’ve already done. Like you’re doing good things, yes, there are things that we can improve, but you’re already doing good things. And I think it’s so common for lawyers to downplay the things that we’re doing that are good. If it’s not a plus perfect, right? Everything is going exactly the way that we think it should, then we’re failing, and we don’t know how to do it at all. And I’m not good with money. And whatever else. I say all the time. Everybody is good with money, in some ways, right? It might not be all the ways that you would like to be. But there are things that you’re already doing that prove that you’re good with money. And so then it’s just a matter of acquiring some different tools, some new skills, tweaking some things that you’re doing to get you like more, or and get you closer to where you want to be.

Danesha
Yeah, I think after repetitive weeks of talking about like, I think later in time, you kind of asked again, what I think there was a time where you asked what I was already doing that was like good with money. And we kind of went through different things. But then from there, it’s kind of just been a matter of me shifting the way I think about the things because we were able to say like I was doing these specific things. And now that we have a plan specific to my finances, here is how I can go forward. And I think, especially for me, it was very helpful when we started because I had three months before I started my clerkship. So we worked together for three months before I started and three months after I transitioned to my clerkship. And I set a lot that for me, it was like a practice run. And then like actual life the three months before and then three months after. And so we were able to practice a different budget in those three months prior and then an official, quote unquote, budget in the three months after I started my clerkship, and we were able to tweak things and so whereas when I first started, I was like, I have no idea what I’m doing. Now, I wouldn’t say that I’m an expert, but I do think I’m going to manage my finances well going forward. And I think because of the shift in my mindset that we worked on, once I go back to a different job, whatever that is after my clerkship, I feel like I have skills to make those adjustments according to a different pay grade but also like still work toward my financial goals that are not me just working all the time

Rho
And something that I want to recognize you for you mentioned in there like, oh, we, you know, started with this practice budget, and then we tweak things when we got into real life, you are really good at adjusting. Because we had this practice budget. And then like, because we didn’t know what the clerkship salary was going to be. So we were just kind of estimating. And then we got the clerkship salary. And it’s like, okay, let’s adjust the budget this way to be able to do these things. And you just like, came right in. It’s like, Yes, I can change this, I can do this, I can add that. And you just went with it. And I think so often, people will, like, feel resistant to making changes, like, especially if it’s like, Okay, I’ve been practicing this way for three months. And now it’s changing, like, sometimes people will be resistant to changing in that way. And they’ll keep doing the same thing and not adjust and tweak, and then ended up getting into a situation where they’re not achieving their goals or doing the things that they want to be doing, because they’re stuck on, you know, the way that it was supposed to be the way that it had had been before. And I think you done such a great job of pivoting in both the transition from the big law job to the clerkship, but then also in, like the practice budget to the actual budget, let’s put it into real life. And so I have to acknowledge you for that, even though I know that you’re like, it wasn’t really the biggest like no, yes, that was a big deal.

Danesha
I think one of the main things that I am taking away and like hoping to continue applying going forward is not looking at my finances from an emotional perspective, which is something that you talk about a lot, because I do think there was a change that we had to make after I started my clerkship. And the first time we talked about it, I was extremely stressed out, because we had already made cuts from my original spending. And so I was concerned about like trying to make more cuts. And then, you know, we kind of talked about, technically, that wasn’t required, because I do have money in savings. And that also stressed me. But in like I think the following week, when we came back, I was like, Okay, I looked at it again. And these are the categories I think that I can cut back on. And we talked about a few more things. I think, in the end, we were about $75 off. And then we had to talk about my shopping budget. But in the end, it was like, I think you asked me like, could you go a year without buying any clothes? And I said, Yes, but I don’t think I can commit to not buying any shoes. And so we just decided that I would have a shoe budget and not a clothing budget. And that works for me.

Rho
Yes. And I have to say, I think when people hear you talking about we had to cut here we cut back there. They’re thinking like, oh my goodness, all this deprivation. But you’ve got like, your personal care things in your budget, you’ve got your shoe budget, you’ve got all of these things. And so like, I think that you are an excellent example of exactly what I talk about, and that your budget is your plan for how you’re going to use your money. And it doesn’t have to mean like, oh, well, I’m going from big law to clerkships. So I have to just cut all the things and I can’t get my hair done, and I can’t you know, get my nails done. And, you know, go get massages or like, you know, all of these things that we might consider luxuries, it’s like you can still incorporate those things if you want to. And it’s just a matter of balancing what’s important to you, versus what’s not so important that you can cut out. So it’s like we’re cutting out things that, you know, you’re like, I’ve still got the stuff that is important to me. And I’m just making sure that it all fits within this new salary that I have.

Danesha
Yeah, I think I mean, you can attest the fact that my nails are always done, give up getting my nails done. And so that was something that we talked about. I think when we first started, you kind of asked me what I think it was like the 10 most important things to me. I think most of the items were related to personal care, because I like getting my nails done. I like getting my eyelashes done. I like to get my hair done. So those were things that are important to me that I didn’t want to give up. But one of the other things we talked about was sometimes like, I do things with my friends, not because I want to do that activity, but because I want to hang out with my friends. And so I made the decision where it’s like, I’m going to keep getting my nails done, and maybe I just won’t go to every event with my friends because that’s what’s so important to me. The event itself is less so important to me, and then a lot of my money previously was going to traveling with just the function of being a judicial clerk, I don’t have the time to travel as much. And so that has also helped a lot. And I, because I knew this clerkship was coming I last year, used the money that I had my advantage in like, building up my credit card points and my travel credits, so that when I do have the time to travel this year, it’s not costing me as much as it would have previously, because I’m still going to get my eyelashes done, I’m still going to get my nails done. So we kind of talked through what was important to me, and what I wanted to keep doing and what I was willing to say, I don’t need to do that as much.

Rho
I think that is so important, like doing that exercise of looking at what is important to me, and what’s not so important to me, so that you’re not cutting out the things that are important to you. Because when you cut the things that are important to you, that’s how you end up blowing your budget, and not sticking with it because it feels like I’m depriving myself of this thing that I really enjoy. And it’s not fun, right? Like I say, all the time, that the way that you manage your money, you want it to be something that you can see keeping up with years down the line, right. And of course for you, if you move into a different role, you might have different pay. So you might bring back in some of those things that we cut to fit the judicial clerkship salary, but you have not cut all of these things that you really enjoy to where now when I make more, I’m just gonna go, you know, splurge and, you know, go crazy, because I’ve not been spending on these things for a year, like, No, we’re still allocating money to those things that are important to you, so that you are living in a way that you are still enjoying your money, you’re enjoying the fruits of your labor, and it doesn’t feel like deprivation.

Danesha
One of the things that kind of stressed me out the most was the idea of cutting things back. And because I was in big law for four years, I’m very accustomed to a certain lifestyle. So I was kind of nervous about making that change, and what I would have to cut out to accommodate my new salary. But I think the past three months since I started my new job, us working together, has helped me realize that like, when I focus on spending money on the things that are actually important to me, I don’t feel like I’m missing things. So I, I feel like it will be easier for me to maintain going forward. Because I don’t necessarily feel like I’m missing out on things. I think the one probably major adjustment that would come later on is like incorporating travel back into my schedule and my budget. But other than that I’m like, because I, I maintain the things that were really important to me and let go of expenses in other areas. I’m seeing that I’m not lacking anything. And I’m just being more intentional with where I’m spending my money, which was kind of the downfall of taking the time to track my money for three years, but not like assessing what that actually means. And if I was prioritizing my money correctly,

Rho
What do you think led you to start tracking your money in the first place?

Danesha
A lot of podcasts and books about finances generally say that, like the first step to making changes with your money is knowing where you spend your money. And so I was like, Okay, I will get my spreadsheet, and I will track my money. So I did that. It just was essentially for no reason. Except that when we first started working together, you asked like, you know if I could go back and my finances for the previous I believe three months, so we could see what I was spending my money on. I was like, that’s not an issue. I have it readily available. But other than I really wasn’t doing anything with the information. It was just something that I felt like the financial world suggested that I do so I did it.

Rho
Yeah, I say to do a look back for one to three months. And I think you are probably the only client who has actually done three months because most people are like, Oh yeah, here’s last month here you go. But you’re like, oh, yeah, here it is here are my spreadsheets. I love that. So tell us what are maybe some of the biggest things that you’re taking with you in your finances going forward.

Danesha
The most important thing is trying to be objective about my finances. Because I think it’s very easy to look at any like mishap or any going over budget in any specific category as failure. And that’s something we’ve really worked hard on of not seeing it as failure, but just trying to take that and figure out what adjustments I need to make going forward or, like, okay, if I’m over, if I know, I’m going to be over and one category this month, is there another category, I don’t necessarily need to spend that money in, so that I’m not going fully over budget, I’m just going over budget in one category, which I think also, the second thing I would take is being flexible. Because I remember, when we first started talking, I was telling you that I wanted to have a budget so that I knew exactly what to do. And we talked about like, adjusting each month based on things that were coming up or potentially like exceeding a category and accounting for in another category. And I was like, immediately, no, I don’t like that. Why are we creating a plan, if we’re going to change the plan every month, and I think over the past six months, I have been more accepting of the flexibility of a budget in itself. I think like when I think of the categories, I think I renamed them as like mandatory and flexible. Because I was like, okay, you know, if my personal care costs less this month, but I want to go out to eat more times than I usually do. I can account for that some that money somewhere else. So I think the flexibility was something I didn’t necessarily think existed in a budget. And now I see the importance of it in just one maintaining my own sanity, and then tend to just like keeping track of things. And then I think, third, trying to think ahead about my finances. Like I said, Before, I was kind of just tracking things on the back end, like I think, once or twice a week, I would go through my credit card statement or my bank accounts and say, Okay, I spent this money there, I spent this money there, there’s how much cash I spent, etc. Whereas now, I’m like, Okay, next month, I might be taking this trip, I probably won’t bring my dog with me. So I need to account for expenses for her getting a sitter for her or like, in October, I plan to take a trip for my birthday. So maybe in the months leading up to that I can spend less money in different categories to account for the money, I will probably spend going on a trip for my birthday. And I do not think there was any point in time where I was thinking that much ahead about my finances. But it’s been so much more helpful, because then I can say, you know, I do have a category for Amazon. But if I don’t necessarily need anything from Amazon this month, I try to like, wait until closer to the end of the month to see if I might want to spend that money somewhere else instead of on Amazon. And if not, maybe April 30. I will be buying stuff on Amazon. But just trying to think in advance about things that might come up. And obviously you can’t plan for everything. But has helped me relieve a lot of stress on the back end, trying to consider what might come up on the front end.

Rho
I love all three of those points. Because it’s like, yes, we want to plan ahead and have a plan for the month. But we’re going to be flexible because yes, you were like, This is the budget, like the budget, the end. And it’s like no, that’s not how it works. I mean, maybe some people do it that way. But I think it’s more useful to like have your budget be this fluid thing when you’re thinking about the ebb and flow of life. Right. Like you mentioned, you know, trip for your birthday or trip, you know, like there are different things that come up at different phases of the year, where if you just have this as the document that is the budget, the end and it’s hard to account for those kinds of things. And so when you have your plan, because there are a lot of expenses that don’t change, right so you’ve got your kind of your core plan your basic plan, but then we think about what’s coming up in this month. Oh so and so’s birthday and I know that these people are going to be in town and we’re going to go out to eat so maybe I’ll put a little bit more for my restaurant budget versus my whatever, right? Like having that flexibility, and it kind of works in, in conjunction with the plan. And then the last thing, or I guess it was the first thing that you said, but taking that emotion out of it and looking at the numbers objectively, is so helpful, because so often I think we look at our finances as it’s like this reflection of us, or like how we’re, you know, like we talked about, like, your numbers being like saying that you failed, or that you, you know, whatever. And it’s like, well, no, it doesn’t have to be that. Right? It doesn’t have to be failure thing. It’s, this is where I am, this is some objective information that I have, that I can use to determine how I want to move forward. And I think when you look at it objectively, in that way, it’s much more productive, because you can do something with it.

Danesha
Yeah, I think I was using the word failure a lot. And I get like, each time you were kind of like, but why does that equate to failure? I don’t think I ever really had an answer to that. But. But that was, I guess, the emotional viewpoint of it of like, if I take money from my savings to cover monthly expenses, that makes me a failure, because I didn’t stick to the plan. Whereas is that not that’s not my preference of things to do. But I do understand that anything could happen. And if things come up, I might need to take money from my savings to cover some of my monthly expenses. And that doesn’t make me a failure, because I have the chance to adjust going forward and re allocate that money back to my savings if that’s what I choose to do.

Rho
That’s exactly it. So one thing that people may not know, is you are actually the client I was talking about in the episode where I talked about planning for expected expenses, where like you’re talking about thinking ahead, you were thinking ahead, even before we started working together, right? Because you decided like, Okay, I’m about to take this clerkship, I know that my salary is going to be lower, I don’t want to deal with, you know, moving. So let me go ahead and save up so that I’m prepared when this happens. Do you want to share a little about that?

Danesha
Yeah, so actually, throughout the pandemic, I was continuing to pay on my student loans. But as soon as I accepted my clerkship, I redirected that money to a rent fund, because I did consider moving to a different apartment building or to a smaller apartment. But I wasn’t sure that’s really what I wanted to do. So I just started saving the money for my rent for this year of my clerkship, because I wasn’t sure my rent would fit into my clerkship budget. And that was one of the things where, when I first started working with you, I brought up that I had done that. And that was one of the things where you kind of were like, so you were planning in advance. And I kind of just thought of it as like, a necessary thing to do, because I don’t care to move. So this is just something I have to do. And you took the time to point out how unusual it was. And I didn’t really think about it as unusual until you pointed it out. It was just a function of I don’t feel like moving and I know that this might not be covered. So how can I try to make my life easier next year. And it was just something that I felt was necessary. And you kind of pointed out like, you didn’t have to be thinking that far in advance. So when I say like, I am working on thinking of things in advance, interestingly enough, that’s not what I was actually talking about. Moreso talking about, like shorter terms, upcoming birthdays and things like that. But I do think people in my situation specifically, that’s not every reason life choice to do a clerkship, but people who know like you know, you know, in advance when you’re planning to leave your job, and if it might involve a pay cut, and those are things that you can think about and plan for in advance of just like, How will my life change and is there a way that I can ease that change on the front end instead of stressing about it on the back end?

Rho
That was one of the things that I think made it really apparent that you do have some good money, instincts, some money skills, and you are looking at it like, Yeah, this is just what you do. And I’m like, no, no, a lot of people are not doing that. So I don’t know that I use the word unusual. It’s not that it’s like, unusual, but it’s not common. Right? And I think you were thinking of it as like, Yeah, this is just what you do. This is how you manage, and you were looking at it or like, ignoring it really as evidence that you’re good with money you’re like, but I am not actually.

Danesha
I do agree with that I didn’t come to mind as a thing that made me good with money. I can see now how thinking that far in advance, does like contribute to my financial well being. But when we first started working together six months ago, it wasn’t even really a thought it was just an automatic. This is what I need to do. And I didn’t know that it was uncommon.

Rho
And I think the beauty of it too, is because you did that, then you were able to put more money toward those things that you care about, because you already had money set aside to cover your rent as well. So you didn’t have to cut as much from those areas that you cared about, because of that planning that you had done.

Danesha
Yes, that’s very true. I might have had to stop getting my nails done. None of you be happy about that.

Rho
The horror. Well, what words of encouragement do you have for anyone who is where you were, they feel like they don’t know how to manage their money. Maybe they’re contemplating taking a clerkship or something like that. Do you have anything to share with those people?

Danesha
What I would say is, when I first reached out to rho, I was nervous and stressed, and I didn’t necessarily, I mean, I listened to the podcast already. I was all already following your work. But I didn’t necessarily know how it would be specifically beneficial to me because of my unique situation. But after talking to you, I did think that us working together would be helpful to me. And I did not think I would make as much progress as I did. Like I said, I think the biggest issue I was having was a mental issue and not an actual financial issue. And so I think, for anyone in my position, I would say, work on your mindset about money, because the actual money in your bank account is less so important than how you’re thinking about that money, how you’re conceptualizing what you should do with that money. It kind of really starts in your head.

Rho
It does. Everything else flows from the mindset. I love that you said that.

Danesha
And I don’t think I thought my mindset would have changed so much in six months.

Rho
I love that. Because yes, I see all of the progress that you’ve made in the last six months. And like I was telling you before we started recording, like that’s a big part of why I love what I do. Seeing you six months later, more confident knowing exactly what you’re doing with your money, like you come with your budget, and you’re like, Yeah, I’m doing this, this this this month. I just love it. Thank you so much, Danesha, for coming on sharing your story. I know that it’s going to be so helpful for so many people. And it has just been such an honor working with you and helping you along this journey.

Danesha
I have really appreciated your help. Like I said, I didn’t think I would have as much of a mindset change as I did. I think maybe I thought I would be able to control more of my finances. But I didn’t think it was such a mindset shift in the making. So I really appreciate all of your help.

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I hope you enjoy that conversation with Danesha. Listen if you are ready to get control of your finances, so you can stop stressing about money too. I invite you to come work with me. Head to rho thomas.com/call to schedule your consultation. All right, that is it for this week’s episode. Come connect with me over on social media. You can find me on LinkedIn rho Thomas and Instagram at I am rho Thomas. Subscribe to the show and leave a review both of which helped more people to find it. And please think of a friend or two who would find Danesha’s story inspiring and share this episode with them. As we close out friend, I pray that you take the information you learn here, apply it in your life and open up to the realization that wealth is available to you. As you do that consistently, week after week, you’ll continue to take steps to regain control of your time, build wealth, and live the life of freedom and choice you deserve. Talk to you later.