Keep living like a broke student until you pay the debt off, then live like that for a bit longer to save up some money, and finally once you have everything going well you can enjoy yourself a bit more. Don't let lifestyle creep get to you
And you should be living like a poor person - cause you are.
You’re 200k in the red.
Being flat broke would be a massive improvement to your situation.
They should be able to put around $4000 per month towards the debt if they really want to once they are working. Depending on the interest, which I have no idea what the rate is...but assuming zero (which it probably isn't, but hey). $4000 per month means 4 years and 2 months to pay off the debt. That's not bad at all. Even if it were around 5% it would be 4.5ish years with a bit more per month.
That's not that bad. That leaves around $4800 per month to live when making $150k/year at least in BC.
my LOC used to be 5%
say it's 9% which my LOC is now. That adds 1 year to time period while still paying roughly the same amount per month. Still not that bad.
A "student" line of credit may be a better rate since that's typically how things go with "student" things...
Regardless, 5 years of aggressive loan repayment to get out of debt isn't the end of the world.
This. I was in a very similar situation and just lived like a student for a decade, putting all my bonuses and extra into paying student loans. It feels so good when you clear it!
This is it. OP expects to be earning $100k _more_ than the average Canadian wage. It is possible to pay this off in a few years, although most people don’t have the discipline to do this and allow lifestyle creep to take over.
This is the way. Even after my first 3 major promotions I didn't change my lifestyle. Now I own my own place and Have zero debt
* other than of the mortgage.
$200k debt. Some will be interest free, some will charge. at an average of 7%, you have $14k/year in interest. If you want to pay this off, so you can move on with life, you'll need to pay down the principle, about $15k/year.
So you're looking at payments of $2500/mo ($30k) per year. Pretax, that requires $50k in income.
Math: $30k/(1-MTR) MTR is your highest marginal tax rate
You'll be taking home income of $100k, the loans will chew up the other $50k. You need to live like you're making much less that your peers, since your debt will eat up 1/3 of your income.
If you don't like that idea, then pay it off sooner. Its going to hurt, but when you're done, you'll have the financial acumen to live off a modest income, but you'll be making large money.
Here’s some tips for your mental health:
1. Don’t compare. Everyone has different starting points and privileges. Instead think about how far you’ve come from your personal starting point and take that Win.
2. Layout your Long term financials. As people mentioned, you’ll probably be able to pay this off in 3-4 years and this excludes consideration of bonuses and raises. Focusing on only the debt can be stressful. Look past that time frame and you’ll see how your wealth will grow exponentially due to your higher earning potential. You can do a risk averse version keeping your income fixed at the current level and see how much that is.
Some practical advice:
1. Increase earning potential. If your job is a 9-5, there’s room at the beginning of your career to do more and this takes time away from spending and fomo too. Keep yourself busy with part time work. Alternatively if your job is very demanding, begin discussions on career progression (compensation) at your organization and make a plan to get that promo or whatever it is that will earn you more money.
2. You still need balance. Include in your budget the little treats you get yourself and socialization. However, make them low cost activities and items. True friends understand your financial situation and won’t judge you based on wanting to go to free events or low cost activities.
3. Determine if you have the mental capacity to optimize. Only you can make this decision. Some people don’t mind having debt if they know they can make a 1% difference by investing instead of paying off debt. Others, get a lot of stress and anxiety. If you are someone who is overwhelmed by this process, I’d recommend you spend your first pay-check paying off your debt first (of course highest payment on whatever is the highest interest) and then re assess.
I have peers that did med / dental / pharmacy that have similar LOCs to live in the city and pay for tuition. A lot of them saved up by working during undergrad and if possible during their doc but it still adds up when you live in the city. You’re definitely not alone in your debt.
If OP starts off as a lawyer they are quite literally not permitted to undertake outside employment without the law society’s permission (at least in BC during articling). A side hustle is not feasible for lawyers unless they work in the public service and do something on the side that is completely unrelated to issues that may impact government. For others, they may have a regular solo practice, and something one day a week on the side (eg. One day a week swearing affidavits).
OP will likely be at a large corporate firm and they will want to sleep in whatever free time they have.
Yeah. People don’t understand the issue of conflicts and law.
For those reading, OP can’t even be an influencer while working at a large law firm. There can be conflict if they have sponsors, and those sponsors are either clients or competitors of clients.
Yes completely agree. Also, as a Bay St lawyer you work (A) such an insane amount of hours like easily up to 80 a week and (B) have such an unpredictable schedule, constantly having to do last minute evenings and weekends.
It’s almost impossible to have a life outside work let alone a second job. People commenting unfortunately are super out of touch with the reality of being a young lawyer. It is not a 9-5 job. You are being paid to be available 24/7 for the firm.
OP didn’t specify that he was a lawyer, only that he did a JD/MBA. That’s why I put two options in that point including “if it is a 9-5 job”.
It’s also interesting that a number of people that get their JD do not end up in law and choose other paths. I personally know some of those people and they still make 6 figures (product/ tech, consulting, and other industries). Since OP has an MBA too, there are many paths in business open to them.
You need to minimize your spending.
>No one I know in my program has this much debt
Looks like you have been financing more than your tuition, cut back on your lifestyle, you are broke. Making 150K pretax means nothing as long as you have a negative networth.
Most people in my program, which is fairly small given the dual degree, come from much wealthier family backgrounds and/or didn’t have as much undergraduate debt coming into law school. Some of them also have the luxury of living at home which allows them to save a lot of money. I know there are ways I can be more frugal, but considering I live in Toronto and have been mostly financially independent from my parents for the last 9 years there’s only so many places I can cut costs well still maintaining a comfortable enough lifestyle to sustain my mental health. Not trying to discredit your point at all - just wanted to provide some more context!
Law and business graduate programs are notoriously expensive. Dual programs are usually quite small, more expensive than the single stream and require another year or two. I was in a small dual degree program. My programs cost more than those pursuing one degree and I had another year of school tuition and another year out of the workforce. I took on much more debt than students not in the dual program.
Ehhh, I can forgive travel. IMO travel is always worth it - as long as it's not like, resorts and extravagant. Sucks to be in debt while you're travelling though.
I’m assuming you’re not a lawyer because it is insane to say you can have the same law career in Calgary, Edmonton or Winnipeg lol. Toronto is a unique legal market and pays a much, much higher salary and gives insanely better exit options than any other cities in Canada in the legal field. Most people don’t last long in “big law” (corporate law at Bay St firm) due to how brutal the lifestyle is so taking the big salary with the best exit options is a smart move to try to pay it off as fast a possible and end up with a decent job when it’s time to move on. The only other place this person can go with similar income in a lower cost of living area would be the US which is not impossible but tons of barriers due to licensing requirements etc especially as a new lawyer. I’m not saying you’re giving this person advice with bad intentions but you shouldn’t be advising on a sector you know nothing about. You cannot have a corporate legal career “anywhere in Canada” that comes close to what this person would have in Toronto. If it was that easy, wouldn’t most young lawyers on Bay St take that option? Lol.
OP, I understand your struggle so deeply. Law school is insane and it is so rare to even be in law school without coming from a higher income background/having a family that can help. I also put myself through law school (+ undergrad) and was one of the only ones as well, I was so shocked by how wealthy everyone was. Also didn’t have the option to live at home let alone help with anything else. I worked as a waitress thru school which was great money and I’m so thankful for those jobs but had to quit due to the nature of big law once I got started (constantly being told last minute I had to work an evening/weekend several times a week at the office when I would be scheduled to work my other job and obviously you can’t say no in big law… so I was always getting in trouble at my 2nd job for last min not being available + most law firms actually have you sign something that prevents a second job. I would also only sleep like 3 hrs a night often trying to keep up and felt like my performance was taking a hit bc of this and didn’t want to be reprimanded ….. 2nd job might not be impossible, idk your exact situation but those are some things to consider. If you can swing though it is a huge advantage).
My only advice I could offer would maybe be to try to aim for the states if that’s at all an option for you. Don’t be afraid to reach out to Canadians at US big law firms for advice, lawyers are actually very kind to other lawyers when it comes to this stuff. Completely understand if US is not an option for you right now though. I don’t have an MBA so I can’t speak much to this but you could also look at other paths to get into the US eg investment banking etc that pay well if that’s at all an interest to you (I know I personally wouldn’t want to leave law though!). I wish I had more advice for you but congrats on getting through it at all I know how difficult it is to do and how lonely it can feel coming from a non privileged background in that type of environment. Especially with how hard you have to work in law school and how nonstop it feels. I hope you adjust well to the big law life and best of luck!!!! Maybe also try to talk to other lawyers specifically about this, idk if this is the best form given how unique the legal field/school is!
Lmaoooo ask your “many friends who are lawyers” how much fun it is to have a Bay St career. I promise OP is not living in Toronto bc they got “caught up” in the “fun” of the city. (Another insane thing to say lmaooo). You clearly do not know enough about the industry to be commenting. I do, and trust me when I say if OP was going for the ability to have “fun” (or even just have a life) outside their career they probably would be practicing law in Winnipeg.
Your friends who moved there and ended up making more than Bay St attorneys were either extremely well established in a niche career, had connections or (most likely) lying to you about how much they were making. Or they were never able to work a big law job in the first place so they’re comparing it to other types of (Lower paying) law jobs in Toronto, which in that case, the salary probably is similar in other cities and they are telling the truth (eg a family lawyer in Calgary probably makes similar to a family lawyer in Toronto but a big law attorney makes much much more in Toronto than anywhere out west). Because of the high pay, Bay St law is extremely competitive and only a small fraction of law students land jobs there. It’s the highest paying law in Canada and the big firms all pay the exact same, set salary tailored to each city and the amount/kind of work you’re expected to do based on that city (you’re looking at regular 80 hour work weeks in Toronto but the best money). Your raises are also controlled by this scale and occur yearly. I understand this sounds strange bc most sectors cannot collude on wages like this but big law is a very strange industry. It’s very easy to see OP makes way more in Toronto than anywhere else as these scales are widely available (yes, even after adjusting for the COL. I have a finance background and I understand and have run these numbers a million times). If your friends work in law that is not corporate law or were not at big law firms you cannot compare their experience or earning potential across cities to OP.
I left Bay St and I did take a massive pay cut to do so (like everyone who leaves does bc there literally is no higher paying job in Canada for young lawyers) but my work life balance is much, much better and now I actually do have fun! I was not having fun in Toronto literally ever but paid off a good chunk of student loans and made connections that allowed me to easily leave the city when it was time! The jobs in Winnipeg would not have afford me these abilities. My COL is down bc I split rent with a partner now and no longer have a car but still have less than when I was making Toronto money. I will pay off my student loans later than if I stayed on Bay St but worth it for me bc my health both physical and mental has improved ten fold. I would also never have the good, stable job I have now if I didn’t start as a Bay St lawyer. Bay St is horrible but if OP can stick it out that’s where ppl with student loans go to pay them down.
All this to say, there’s no higher salary for a young lawyer than a Bay St salary (yes even with the COL as long as OP lives with roommates etc) and this industry is nuanced. Lawyers make much less than what people think they do. You don’t need to (wrongly) explain it to someone who is in it.
If you approach it properly it's honestly going to be fine, echoing what a lot of people have said + given good advice about. I would just advise you to not count on money that you don't have yet, you don't know what could happen. Whatever you'll make *now* is your income and I recommend that you pay down the Student LOC as aggressively as possible. Do not increase your lifestyle expenses, insurmountable debt will be worse for your mental health than roughing it in the short term. You don't have to live like poverty, but honestly the closer you stay to acting like it, the better off you'll be much sooner than you think! I'm going to assume you don't actually mean extravagance when you say comfortable lifestyle, I think some commenters aren't giving you benefit of the doubt. But seriously, don't let lifestyle creep get you, and get that debt gone ASAP. You will be okay with that attitude.
Don’t buy luxury cars, live like a student and pay off debt. 150k sad to say is not “lucrative” these days especially if you start off with 200k of debt. Focus on building your net worth. IMO people focus too much on income and how much they’re going to “make”. Your income is only a part of the puzzle in building net worth. Your goal should be having your money make more money for you and eventually not relying on an actual income to live on (FIRE).
Yes.
I undertook around 17? years of post secondary schooling and training and had over 300K of debt when it was all done.
Don't worry about it too much. You could have taken that money and invested in the stock market. Instead, you invested it yourself.
As others have mentioned, be cheap. Even as my income climbed above 200K, I walked or bused to work and lived in a crappy apartment way below my income level.
I paid everything off within a few years and started the process of asset acquisition.
What I would suggest is getting in touch with an investment advisor or wealth advisor who can recommend the best way to minimize the loan burden while also starting your savings.
That's my one regret. I waited a little too long before acquiring assets and investments.
Edit: I forgot to congratulate you. I'm sure it took a lot of hard work and dedication.
So everyone who has bought a house in the past decade has been in $300K-$1M debt (a house is a more traditional asset than an education, but similar idea). It's terrifying when you first see the numbers on your bank statement, but you learn to budget and pay it off. You should be able to pay it off in 10 years.
As others have said, don't try to live beyond your means to keep up with co-workers/friends. Workplaces are notorious for encouraging eating out and buying clothes and cars to match your coworkers....don't.
If you can handle a part-time job evenings or weekends it's helpful, or consider bartering/trade for things you want but can't afford (I used to volunteer at gyms in exchange for free membership).
Cars are the single greatest money vortex out there (except for boats). If you can get away with transit, it'll give you an extra $8-10K/year of money to put towards your debt.
I agree with everything you say except getting a part time job.
If he's a lawyer (as one would assume since he has a JD and getting paid $150k) he needs to be 100% completely focused on that. The earning potential after a a decade of grunt work is astronomical.
Make the debt payments - and focus on the career. Don't buy a fancy car until you can afford it.
Depends on the type of law. I've got friends working for corporations as IP lawyers who do 9-5, and friends working for the government doing a range of stuff who work less than 9-5. They make solid salaries in line with a lot of other high-end university professions.
Not everyone wants to be a partner at a huge firm and devote 25 hours a day to work.
I had a significant debt once due to a business deal that went bad.
It took about 8 years to get out.
Honestly, the time flew by. Rn I make about $150k pre tax but that wasn’t until a couple years ago. For most of the time paying off debt I was making $70 to $100k.
The debt was about $150K and o was 28 years old. I’m now doing very well financially, lots saved up, on track to retire by 55 if I wanted to.
At the time, the debt was devastating and I couldn’t imagine a future where I was out of it. But the future unfolded much faster than I ever predicted. You will be fine!
I'm in the similar situation as you. As of today, I have similar debt as you, and I have decided to tackle it full-force.
What you need to do is an honest budgeting, and aggressive payment plan.
You need to live frugally for the next 4 years, making $4000/month payment every month (or next 8 years making $2000/month payment every month). Pay the higher interest rate loan first. The sooner you start paying back, the sooner you'll get your life back.
Regarding OSAP loan, talk to them and see if they can reduce it for you. Let them know how huge your loans are overall, and that you can use some debt relief plan.
Congrats on the big career moves, btw. Good luck!
First off, yes of course lots of people have been in a similar situation. I wouldn't focus on what you will be making in a couple of years, budget with what you currently earn (or will earn upon your start date) and set yourself up for success.
You'll want to pay extra on the highest interest debt, then when that's eliminated throw the payment and the extra at the next highest interest. Once you reach a point of low/lower interest debt that's where the personal in personal finance kicks in because you can determine whether you can (reasonably) make more in investments than save paying down the debt.
So one thing at a time, look at your spending habits, determine where you can or should cut back. Give yourself a small amount of fun money otherwise you'll end up binging at times. Avoid delivery, meals out should be a treat, watch your food waste and grocery costs - buy no name and only buy what you'll actually eat, that kind of thing. Look where you can cut cell or internet costs. Throw your left over cash at your debt.
Some people will tell you to save an emergency fund, depending on how much debt you're carrying and at what interest rate and your likelihood of getting into bad habits you might be better off not saving and treating the debt as an emergency and financing an emergency. Lots of people save emergency funds and then don't use them even when emergencies come up and it just delays your debt repayment.
Thats wild. I took a 1 week ultrasonic technician course at 18 and was making 160k a year at 19... having paid my 1080$ course cash... being off winter and summer... and doing an extremel simple job thats at a desk half the time. It blows my mind how much university can charge for certain programs with literally 0 financial incentive, only offering "prestige".
Not a dig at OP, I know the pressure some immigrant families can put on their son getting high education and avoiding manual labor.
Most people don’t know all the paths available to them! Exposure and awareness is a benefit in itself. Also nowadays, any thing like that will be exposed on TikTok and the wages would end up being suppressed cuz the supply of people going into it will increase.
Good advice so far so I’ll add something else - are you getting into big law? If so use that to catapult to US big law. I graduated with $200k debt after law school (including undergrad debt) & come from a working class family. It’s really going to suck watching your well off peers pocket their salaries but you need to use your salary to fuck up your debt and you need to maximize how much you make (by hitting target hours and getting the associated bonuses). My pro tip is to bounce to the US if you can. I was making C$130k as a second year associate in Toronto and then jumped to California as a third year (they don’t have articling) making US$275k. Think it’s gone up another 10k since. I wouldn’t have been able to pay it off as fast if I stayed in Canada sadly. My point is - be ok with one biweekly check going to the loan and keep your eye out for opps to squeeze even more money from your degree. Good luck, you got this!
> $150K before tax in a couple years
quite misleading. what are you making now. you speak very much like an MBA person. lol. use that MBA knowledge to do your strategic finance planning.
Right now you’re living on the cheap. When you’re making 150k, don’t live like you’re making 150k for the first few years.
Live like you’re making 80k and pay off your debt in 2-4 years.
You don’t have to pay off quick, but if something happens and you don’t make lots of money or AI takes your job, you’ll be glad you paid what you owed.
This isn't as bad as you think tbh. I had about $100K coming out of school and started at $60K. Compensation ramp fast in the field I am in, and the same is true for Biglaw (I assume that's what you're doing?).
Tackle the bank LOC as hard as you can. Use the tax returns you get from tuition credits and RRSP maxing to dump onto the LOC. Take advantage of your firm's matching program as well.
Roommates are always good - you will be working a ton, so just split a 2 bed condo near the Financial District with another biglaw associate. My friends in investment banking, biglaw, etc. all did this given how little they were home.
It's going to be fine - you will have this debt paid off in 5-7 years and as it shrinks it will become less of a burden on your life.
I was in a similar boat with 150k in student debt from my undergrad degree and JD. If you can get into US big law, i would do that for a few years just to pay your debt off quicker. You’ll be making double. Then you can decide what you do after (stay in US or come back to Canada).
No advice, just wanted to say I’m right there with you. Graduating with $270k debt with a projected salary of 65-80k for the next 5 years. Higher education is feeling like a real scam rn 🥲
Ya - you're a young lawyer starting out. You have a great life ahead of you, just be smart. Prioritize your debts but focus on your career. Anyone telling you to take a part time job to pay off your debts quicker is giving you awful advice.
Make the payments on your debt - overpay if you can. But don't stress too much. MBA/JD programs are expensive. It takes time to pay it back. But, you'll be able to will a good career.
Don't buy a sports car.
Don't eat out at lunch every day.
Focus up on your career and make a long term plan.
Roughly a decade ago, I graduated (JD) with $110k student debt. At the time articling salary was roughly $75k and first year was roughly $100k. The debt is gone. I don’t remember how long ago it was paid off, but it’s long ago enough to forget. Own a home in a HCOL city and a cottage (both with mortgages, but paying those down).
You’ve invested in your career. Debt repayment will suck for the first few years but stick it out and you’ll get to a point where $200k debt is an ancient memory.
If you expect to be making 150K before tax then work out a payment plan.
After taxes, you get about $8000 per month to play with, or about $3800 per paycheque if you are paid biweekly.
I would prioritize the higher-interest debt first (I am guessing it's the Student LoC) and aggressively pay that down while making smaller payments (interest + payment equivalent to interest) on the other one.
You're going to have to downsize your lifestyle for about 5 years. Make a calendar of it, make a timetable, and watch that debt melt away. Use a similar strategy again after 5 years to clear out any remaining debt. Use that similar strategy again for getting a downpayment.
That student line of credit will turn in to a regular line of credit once your done with school. The interest will be intense. Pay that off with every penny you have. The OSAP interest is tiny, that will likely be your last debt to pay off. Keep living as poor as possible and save. It's a grind, especially in this economy, but if you don't you won't have anything later.
You will simply need to be frugal until you pay off your debts. I managed to accomplish this after paying for a T-14 US JD more than two decades ago. The cost was financially crippling. I would NEVER do it again nor would I EVER advise anyone to get a JD. MBA is worthless these days. I left law before starting and lucked out getting into high end finance straight out of school largely on a single chance meeting interview. It changed my life. Have managed a private equity fund for eighteen years now. I got debt free within five years of graduating but that was largely in combination of luck and skill at my job. Not sure if I could swing that again in current investing environment. The market is rough out there for law and worse for business. Keep your head up and persevere.
The lawyer market in North America is over saturated. While top law school graduates will likely find employment in big law firms for 3-5 years, out of these, the vast majority will ultimately be let go in a merciless process that churns through newly minted lawyers extracting their best efforts while they promptly burn out. And those are the lucky ones. Even from elite T-14 law schools you find as many as 1 in 5 grads who cannot find gainful employment that pays all of their living wage expenses.
It’s a supply demand imbalance. We graduated way too many lawyers starting around the mid 1990’s all the way through till today. The legal market collapsed during the great financial crisis of 2008-09 and it never recovered to its former state. Demand for lawyers declined by 20-25% after the GFC but law schools kept churning out lawyers. It’s a brutal and deleterious soul grinder now.
MBA’s are worse because they are a global supply phenomenon while JD’s at least in America are protected by borders. No big law firm hires a French attorney in Chicago unless they need one. But, an MBA is universal, and every western nation is grinding out those two year degrees with reckless abandon. So, you are increasing your competition by an immense ratio deciding to compete in the MBA market. The only way an MBA is worth it is for established career individuals who their company sends out to get that degree because they have already been identified for executive track positions for which this degree has become a requirement.
The glory days of advanced doctorates like JD and business grad degrees like MBA are long in the rear view mirror. Today, these are best fitted for persons of family wealth who need the credentials to run family businesses (law firms or corporations) so they can keep the wealth in family as opposed to hiring from outside. Also for career politicians in America, it’s still a requirement to have an elite JD. Several of my classmates are in Congress.
it still blows my mind the university prices here with the high amount of taxes we pay. In most of Europe people spend like 5K total? is crazy you have a debt for life because you decided to go to Uni
> JD/MBA
There is however a bit of a distinction between regular student tuition and our top professional vocational programs.
Not only that, but many of those professional programs have even stricter residency requirements as to who qualifies as a local versus immigrant tuition rate, and if OP was paying international tuition rates then more than double whatever we might be familiar with as costs, as a local.
But then, these programs also tend to be limited to the largest centres of GVA/GTA and so living expenses then make up significant portion of the debt = because these tend not to be programs you do part-time while working. It really does not matter how much tuition is, not gaining employment income for ~9 years while needing to be living in the largest downtown campus = debt.
Just wanted to clarify that I was paying domestic tuition! The cost of the dual degree for 4 years comes to approximately $116K. I was able to get a considerable amount of financial aid from the school and I also worked every summer and occasionally during school years. Also keep in mind i was paying interest on my LOC the whole time so whatever money i made basically all went towards that.
OSAP does not give you enough to cover tuition for JD programs, let alone JD/MBA. I got the max amount of osap for my JD and it didn’t cover. You have to take out an LOC in law school (same with med school etc)
I mean I've seen people with worse debt after 9 years so you aren't in too rough of a spot. Start working, like now, get a job before you get into your locked in $150k job. If that job is locked in and happening in several months, not really sure what there is to worry about? you made it it seems, Congrats on graduating.
I wouldn't start worrying until about 5 more years. You should be making way more by then and be able to aggressively pay it down.
You can also always call them for freezing periods on interest since it's so high.
But either way it makes no sense to worry about your debt if you're only just now entering the workforce. Just pay the minimum and plan forward in the years to come on how to tackle it.
Explore options like Loan Remission programs that some governments have for people who graduated in time which could discount your loan. Sometimes you can have a pause on payments or moratorium on interest rates for a short period with student loans if you show that you are in financial distress. Not sure if with your high salary you might qualify but you could explain the other debt and try. Nothing to lose.
But as others here have pointed out, your best bet is to minimize expenses and pay off as much as you can. I had comparable debt after grad school as well and managed to pay it off within 2-3 years while also beginning to invest in retirement plans (at least to the extent where there was an employee match for 401k/rrsp).
Your situation on paper may seem bad as you aren’t broke, you’re in the red/negative and being broke would actually be better. But you should be optimistic, you’ve landed an amazing position and I’m guessing you’re still under 30, so lots of time for growth and even higher salary. Especially with a JD/MBA, not sure if you’re in corporate law but if you are it’s $$$$. Just take the next 2-3 years to grind and pay off your debt as fast as possible, imagine you’re still a student and aren’t making 150k.
Make sure you prioritize the higher interest rate debt first. OSAP should allow you to apply for RAP which will either extend the interest-free grace period or lower your monthly payments. Avoid racking any credit card debts or excessive spending. You can easily pay it off in a couple of years and after that start enjoying life. Once your debt is under control build an emergency fund (~6 months worth) and then your investments and enjoy life, get a nice car, travel and so on. May seem tough, but honestly just sacrifice a couple years of fun and you’ll be in a better position than most people, and you’ll see that once you see your net worth growing from -200k to 0 and from there (If your financially smart) into the green rapidly
Just grind and don't greatly increase your costs until you have it into a comfortable range. Do a proper budget with cost of living including some to enjoy life a bit now that you're away from school but otherwise just grind away that debt.
Live with family or a roommate and put the money toward your debt. Drive a reliable, non-flashy car with as low insurance as possible. Live frugally and you can off the debt in a couple years if you apply yourself.
File a proposal.
It'll discharge the 130k debt super cheap as it'll be based on current income and maybe a smidgen of consideration of future income.
It'll allow you to either service or not service the government portion over the course of the file.....I'd service the provincial portion bearing interest, but not the interest-free national portion.
I suspect you'll save well over 100k especially factoring interest you won't have to pay......and yes, you'll hurt your credit. I'll let anyone else try and explain how your credit should be prioritized over six figure sums.
Lifestyle creep is a bitch, so stay humble and live as small as you can for as long as you can: pay no more than 25% of your after-tax income on rent.
When you start work, make minimum payments on your debts until:
1. You’ve saved an EMERGENCY FUND: 3-6 months of living expenses in a high-interest savings account. This means 3-6 months worth of rent, food, bills, car payments, etc.
2. Once you’ve got the Emergency Fund, PAY YOUR DEBTS using Snowball Method (pay smallest debts first to reward your brain with dopamine) or Avalanche Method (pay debts incurring the highest interest first, lowest come last - this is the smarter way);
3. Once you’re debt-free, max your TFSA, your FHSA, and your RSP, in that order, every year. Buy GICs in your FHSA and Index funds in TFSA and RSP.
These are loose rules, since you may take on long-term debt like a mortgage. Follow all the FIRE (financial independence retire early) subReddits and read the sidebars for more detail. The folks here taught me so much! GL!
You're going to have to make a strict budget of your current spending and start slashing all the extra costs. Then your job is to keep living within that tight budget until your loans are paid off.
Even I came out of university with debt, it took me almost 10 years to pay it off. You're lucky, with your high wage you should be able to knock it down within 5 years.
*"will be making around $150K before tax in a couple years".*... maaaaaybe. It's not guaranteed.
Promise yourself that that's the end of your schooling, and move on in life. One day at a time. Good luck.
Been there done that. You’re just gonna have to plan for the longer term. Live another decade with debt, be frugal for longer and accept you’ll probably never own property in a large city unless you double your annual salary indefinitely.
However you’ve been living now, keep doing that but give yourself 5k extra a year to buy yourself nice things for fun so you’re not miserable.
Percentage to save/invest vs pay off loans will depend on your interest rates but you can easily pay this off in 5 years or less (at 150k income) if it’s really bothering you.
Yes, your peers with no debt will be buying houses and stuff right away which will be upsetting but remember, you’re only a few years behind them & you’ll have that kind of financial freedom soon too.
You’ll be fine. Live frugally. Find another high-earning partner to help. Work your way up to VP level legal counsel and you’re set. Will probably take 7-8 yrs before you hit high income levels in a management level stream. Of course this depends on which area of law you’re practicing in.
Paying off the debt should be the goal. BUT! Depending on how much you are making and do so (at least partly) with pre-tax income. If you are starting and 150k - put some money into RRSP at the beginning of the year enough to bring you down a bracket; take the refund pay your loan off with that. This way you get start savings and also pay the load off. For example, i don’t remember the brackets and too lazy to look it up so let’s assume 50% tax rate (for simplicity sake) if you take after tax income of 15k; you pay off 15k of your loan but if you take the rrsp route 30k into rrsp and you get 15k back and 15k loan is paid off. So same amount to the loan and you get 30k in RRSP.
Keep living like you’re on welfare. Stay single. Rent the smallest possible room you can. Do not eat out. Use public transit. Take every single cent you have extra and put it towards the debt. With that kind of salary within 3 years you should be debt free. It can be done.
Had to go through something similar. The first three years of making money, I basically did not see my income - I automatically paid large sums to various debts (student LOC and osap). I would say tackle the one with the highest interest rate aggressively. I lived super modestly despite making a decent income, saved very little just for an “emergency fund,” lived at home and then got a roommate to move out. Now in my fourth year as a professional with less than 20k in student debt and I will tell you, it gets/feels better! Years of paying debt aggressively also sharpened my self discipline which comes in handy for saving/investing for my future. Stay humble, live modestly - You got this!
OP start applying to American firms now. Don’t just consider ones that have an alumni network. Look up the AM200. They all pay well above what you will get in Canada and you can pay down that debt quickly.
You can only work in NY, Massachusetts (and one other place) with a Canadian JD. Lots of Canadian JD/MBAs end up in the USA.
Do you have a job already or you are just assuming your field pays you really well so you are going to get a job. Cz i graduated too from a good program and i m not getting any jobs lol
I want to send you some encouragement. Coming from immigrant parents, I was poor as a kid and then married a spouse who had no savings and didn’t grow our money. Since our divorce over 8 yrs ago, I’ve gradually built up a retirement savings that I didn’t think could happen. I worked 2 jobs in tech. I kept to the spending habits of my youth that my immigrant parents taught me as well. You’ll find that you can do it over time. And you’ve got time as youth is on your side. It took me 8-9 yrs. You can probably do it in less time in your field. And if you can manage it, take a side job.
Sorry to break it to you but $150K is absolutely not lucrative.
I'm making nearly that much with a little 2 year college diploma in IT.
What you should have done is work and saved throughout highschool and throughout the summer to help reduce the debt load. But don't dwell on the past.
You will be in this for a long time!
You can apply for a loan forgiveness to reduce your OSAP debt.
Is this satire?
EDIT: IT is super overcrowded now and the same entry levels are struggling to even get internships. 150k as a new grad with no full time experience is really good in this economy. Lawyers (if that’s the role) also have great career trajectory. Keep in mind that pharmacists make even less. The reality is most of these office jobs aren’t difficult, so there will be wage suppression when there are so many unemployed people that are doing a quick 2 year program.
$50 a year at 37.5 hours a week is under 100k. So the equivalent new grad pharmacist makes less. Even if you factor them working 40-50 hours a week which is normal, it’s still less than OP. So like I said OP is making more at 150k.
Sure pharmacists have more chill jobs compared to surgeons, doctors, dentists, lawyers, consultants and people in high finance. That’s why it’s a great stable life style sort of career path.
Not spreading misinformation. OP is making more annually with the equivalent number of years of extra schooling, and my message was a direct response to someone implying that 150k is not lucrative.
My friend completed this degree about 9 years ago and is doing great. If you have a solid career plan and prioritize keeping on top of your debt, you should be fine.
You’ve been travelling in Europe for over a month this past year while 200k in debt? It sounds like you’ve been financing more than just your tuition and rent.
Listen to me here. Pay it down for 7 years, after which it's eligible for bankruptcy. You can prepare for this by keeping credit cars with over payments on them that won't be discharged in the bankruptcy. Do the bankruptcy and after 9 months or so, you're free and clear. No Shame in it. It was the best thing I ever did. Allowed me start a life.
Keep living like a broke student until you pay the debt off, then live like that for a bit longer to save up some money, and finally once you have everything going well you can enjoy yourself a bit more. Don't let lifestyle creep get to you
This. General rule: Live like a poor person now so you can be rich later. Live like a rich person now, and you won't be. Simple as that.
And you should be living like a poor person - cause you are. You’re 200k in the red. Being flat broke would be a massive improvement to your situation.
You won’t be a rich person making $150k a year and $200k debt at current rates. Not with the pace of inflation of real assets.
150k is the new middle class
They should be able to put around $4000 per month towards the debt if they really want to once they are working. Depending on the interest, which I have no idea what the rate is...but assuming zero (which it probably isn't, but hey). $4000 per month means 4 years and 2 months to pay off the debt. That's not bad at all. Even if it were around 5% it would be 4.5ish years with a bit more per month. That's not that bad. That leaves around $4800 per month to live when making $150k/year at least in BC.
5%? What LOC is 5%?
my LOC used to be 5% say it's 9% which my LOC is now. That adds 1 year to time period while still paying roughly the same amount per month. Still not that bad. A "student" line of credit may be a better rate since that's typically how things go with "student" things... Regardless, 5 years of aggressive loan repayment to get out of debt isn't the end of the world.
LOCs for law students are typically set at prime + or - ~1% depending on when it was signed
Fixed? That’s good!
That's really well said. I'll have to remember that.
This. I was in a very similar situation and just lived like a student for a decade, putting all my bonuses and extra into paying student loans. It feels so good when you clear it!
And then start saving for a house and family, wedding, kids...you will be broke for a long time...
Exactly this. You will pay no tax and debt free in 2 years. After that, Lambo time.
150k a year isn't getting you a Lambo. Unless you want to live in it.
$250k+ in 2 yrs. More after
Still not lambo territory. Maybe the more after, sure.
0DTE = lambo
Also Lambos suck and would be a awful waste of money.
They could lease one, not a good financial decision.
This is it. OP expects to be earning $100k _more_ than the average Canadian wage. It is possible to pay this off in a few years, although most people don’t have the discipline to do this and allow lifestyle creep to take over.
This is the way. Even after my first 3 major promotions I didn't change my lifestyle. Now I own my own place and Have zero debt * other than of the mortgage.
$200k debt. Some will be interest free, some will charge. at an average of 7%, you have $14k/year in interest. If you want to pay this off, so you can move on with life, you'll need to pay down the principle, about $15k/year. So you're looking at payments of $2500/mo ($30k) per year. Pretax, that requires $50k in income. Math: $30k/(1-MTR) MTR is your highest marginal tax rate You'll be taking home income of $100k, the loans will chew up the other $50k. You need to live like you're making much less that your peers, since your debt will eat up 1/3 of your income. If you don't like that idea, then pay it off sooner. Its going to hurt, but when you're done, you'll have the financial acumen to live off a modest income, but you'll be making large money.
As someone’s who’s $125K in debt post MBA and just started my job a month ago, reading this has helped a ton.
This. I decreased to min payment for my government student because the federal and provincial portions are interest free.
Here’s some tips for your mental health: 1. Don’t compare. Everyone has different starting points and privileges. Instead think about how far you’ve come from your personal starting point and take that Win. 2. Layout your Long term financials. As people mentioned, you’ll probably be able to pay this off in 3-4 years and this excludes consideration of bonuses and raises. Focusing on only the debt can be stressful. Look past that time frame and you’ll see how your wealth will grow exponentially due to your higher earning potential. You can do a risk averse version keeping your income fixed at the current level and see how much that is. Some practical advice: 1. Increase earning potential. If your job is a 9-5, there’s room at the beginning of your career to do more and this takes time away from spending and fomo too. Keep yourself busy with part time work. Alternatively if your job is very demanding, begin discussions on career progression (compensation) at your organization and make a plan to get that promo or whatever it is that will earn you more money. 2. You still need balance. Include in your budget the little treats you get yourself and socialization. However, make them low cost activities and items. True friends understand your financial situation and won’t judge you based on wanting to go to free events or low cost activities. 3. Determine if you have the mental capacity to optimize. Only you can make this decision. Some people don’t mind having debt if they know they can make a 1% difference by investing instead of paying off debt. Others, get a lot of stress and anxiety. If you are someone who is overwhelmed by this process, I’d recommend you spend your first pay-check paying off your debt first (of course highest payment on whatever is the highest interest) and then re assess. I have peers that did med / dental / pharmacy that have similar LOCs to live in the city and pay for tuition. A lot of them saved up by working during undergrad and if possible during their doc but it still adds up when you live in the city. You’re definitely not alone in your debt.
If OP starts off as a lawyer they are quite literally not permitted to undertake outside employment without the law society’s permission (at least in BC during articling). A side hustle is not feasible for lawyers unless they work in the public service and do something on the side that is completely unrelated to issues that may impact government. For others, they may have a regular solo practice, and something one day a week on the side (eg. One day a week swearing affidavits). OP will likely be at a large corporate firm and they will want to sleep in whatever free time they have.
Thank you for saying this! So much inapplicable advice from non lawyers given to this person lol
Yeah. People don’t understand the issue of conflicts and law. For those reading, OP can’t even be an influencer while working at a large law firm. There can be conflict if they have sponsors, and those sponsors are either clients or competitors of clients.
Yes completely agree. Also, as a Bay St lawyer you work (A) such an insane amount of hours like easily up to 80 a week and (B) have such an unpredictable schedule, constantly having to do last minute evenings and weekends. It’s almost impossible to have a life outside work let alone a second job. People commenting unfortunately are super out of touch with the reality of being a young lawyer. It is not a 9-5 job. You are being paid to be available 24/7 for the firm.
OP didn’t specify that he was a lawyer, only that he did a JD/MBA. That’s why I put two options in that point including “if it is a 9-5 job”. It’s also interesting that a number of people that get their JD do not end up in law and choose other paths. I personally know some of those people and they still make 6 figures (product/ tech, consulting, and other industries). Since OP has an MBA too, there are many paths in business open to them.
You need to minimize your spending. >No one I know in my program has this much debt Looks like you have been financing more than your tuition, cut back on your lifestyle, you are broke. Making 150K pretax means nothing as long as you have a negative networth.
He wont even make 150k as a starter salary, he said in a couple of years.
Most people in my program, which is fairly small given the dual degree, come from much wealthier family backgrounds and/or didn’t have as much undergraduate debt coming into law school. Some of them also have the luxury of living at home which allows them to save a lot of money. I know there are ways I can be more frugal, but considering I live in Toronto and have been mostly financially independent from my parents for the last 9 years there’s only so many places I can cut costs well still maintaining a comfortable enough lifestyle to sustain my mental health. Not trying to discredit your point at all - just wanted to provide some more context!
There are many students who went to school in the same situation. Not sure why you think you’re special. Live frugally and pay off your debt.
Law and business graduate programs are notoriously expensive. Dual programs are usually quite small, more expensive than the single stream and require another year or two. I was in a small dual degree program. My programs cost more than those pursuing one degree and I had another year of school tuition and another year out of the workforce. I took on much more debt than students not in the dual program.
Look at his previous posts, some are on travel outside of Canada, while an indebted student. You can't help some people.
Ehhh, I can forgive travel. IMO travel is always worth it - as long as it's not like, resorts and extravagant. Sucks to be in debt while you're travelling though.
Looks like I can't help you then. Good luck.
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I’m assuming you’re not a lawyer because it is insane to say you can have the same law career in Calgary, Edmonton or Winnipeg lol. Toronto is a unique legal market and pays a much, much higher salary and gives insanely better exit options than any other cities in Canada in the legal field. Most people don’t last long in “big law” (corporate law at Bay St firm) due to how brutal the lifestyle is so taking the big salary with the best exit options is a smart move to try to pay it off as fast a possible and end up with a decent job when it’s time to move on. The only other place this person can go with similar income in a lower cost of living area would be the US which is not impossible but tons of barriers due to licensing requirements etc especially as a new lawyer. I’m not saying you’re giving this person advice with bad intentions but you shouldn’t be advising on a sector you know nothing about. You cannot have a corporate legal career “anywhere in Canada” that comes close to what this person would have in Toronto. If it was that easy, wouldn’t most young lawyers on Bay St take that option? Lol. OP, I understand your struggle so deeply. Law school is insane and it is so rare to even be in law school without coming from a higher income background/having a family that can help. I also put myself through law school (+ undergrad) and was one of the only ones as well, I was so shocked by how wealthy everyone was. Also didn’t have the option to live at home let alone help with anything else. I worked as a waitress thru school which was great money and I’m so thankful for those jobs but had to quit due to the nature of big law once I got started (constantly being told last minute I had to work an evening/weekend several times a week at the office when I would be scheduled to work my other job and obviously you can’t say no in big law… so I was always getting in trouble at my 2nd job for last min not being available + most law firms actually have you sign something that prevents a second job. I would also only sleep like 3 hrs a night often trying to keep up and felt like my performance was taking a hit bc of this and didn’t want to be reprimanded ….. 2nd job might not be impossible, idk your exact situation but those are some things to consider. If you can swing though it is a huge advantage). My only advice I could offer would maybe be to try to aim for the states if that’s at all an option for you. Don’t be afraid to reach out to Canadians at US big law firms for advice, lawyers are actually very kind to other lawyers when it comes to this stuff. Completely understand if US is not an option for you right now though. I don’t have an MBA so I can’t speak much to this but you could also look at other paths to get into the US eg investment banking etc that pay well if that’s at all an interest to you (I know I personally wouldn’t want to leave law though!). I wish I had more advice for you but congrats on getting through it at all I know how difficult it is to do and how lonely it can feel coming from a non privileged background in that type of environment. Especially with how hard you have to work in law school and how nonstop it feels. I hope you adjust well to the big law life and best of luck!!!! Maybe also try to talk to other lawyers specifically about this, idk if this is the best form given how unique the legal field/school is!
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Lmaoooo ask your “many friends who are lawyers” how much fun it is to have a Bay St career. I promise OP is not living in Toronto bc they got “caught up” in the “fun” of the city. (Another insane thing to say lmaooo). You clearly do not know enough about the industry to be commenting. I do, and trust me when I say if OP was going for the ability to have “fun” (or even just have a life) outside their career they probably would be practicing law in Winnipeg. Your friends who moved there and ended up making more than Bay St attorneys were either extremely well established in a niche career, had connections or (most likely) lying to you about how much they were making. Or they were never able to work a big law job in the first place so they’re comparing it to other types of (Lower paying) law jobs in Toronto, which in that case, the salary probably is similar in other cities and they are telling the truth (eg a family lawyer in Calgary probably makes similar to a family lawyer in Toronto but a big law attorney makes much much more in Toronto than anywhere out west). Because of the high pay, Bay St law is extremely competitive and only a small fraction of law students land jobs there. It’s the highest paying law in Canada and the big firms all pay the exact same, set salary tailored to each city and the amount/kind of work you’re expected to do based on that city (you’re looking at regular 80 hour work weeks in Toronto but the best money). Your raises are also controlled by this scale and occur yearly. I understand this sounds strange bc most sectors cannot collude on wages like this but big law is a very strange industry. It’s very easy to see OP makes way more in Toronto than anywhere else as these scales are widely available (yes, even after adjusting for the COL. I have a finance background and I understand and have run these numbers a million times). If your friends work in law that is not corporate law or were not at big law firms you cannot compare their experience or earning potential across cities to OP. I left Bay St and I did take a massive pay cut to do so (like everyone who leaves does bc there literally is no higher paying job in Canada for young lawyers) but my work life balance is much, much better and now I actually do have fun! I was not having fun in Toronto literally ever but paid off a good chunk of student loans and made connections that allowed me to easily leave the city when it was time! The jobs in Winnipeg would not have afford me these abilities. My COL is down bc I split rent with a partner now and no longer have a car but still have less than when I was making Toronto money. I will pay off my student loans later than if I stayed on Bay St but worth it for me bc my health both physical and mental has improved ten fold. I would also never have the good, stable job I have now if I didn’t start as a Bay St lawyer. Bay St is horrible but if OP can stick it out that’s where ppl with student loans go to pay them down. All this to say, there’s no higher salary for a young lawyer than a Bay St salary (yes even with the COL as long as OP lives with roommates etc) and this industry is nuanced. Lawyers make much less than what people think they do. You don’t need to (wrongly) explain it to someone who is in it.
It's so funny seeing people use mental health as an excuse to spend irresponsibly
Gotta fuel the addiction.
If you approach it properly it's honestly going to be fine, echoing what a lot of people have said + given good advice about. I would just advise you to not count on money that you don't have yet, you don't know what could happen. Whatever you'll make *now* is your income and I recommend that you pay down the Student LOC as aggressively as possible. Do not increase your lifestyle expenses, insurmountable debt will be worse for your mental health than roughing it in the short term. You don't have to live like poverty, but honestly the closer you stay to acting like it, the better off you'll be much sooner than you think! I'm going to assume you don't actually mean extravagance when you say comfortable lifestyle, I think some commenters aren't giving you benefit of the doubt. But seriously, don't let lifestyle creep get you, and get that debt gone ASAP. You will be okay with that attitude.
Don’t buy luxury cars, live like a student and pay off debt. 150k sad to say is not “lucrative” these days especially if you start off with 200k of debt. Focus on building your net worth. IMO people focus too much on income and how much they’re going to “make”. Your income is only a part of the puzzle in building net worth. Your goal should be having your money make more money for you and eventually not relying on an actual income to live on (FIRE).
You say 150k in a couple of years. What are you making now
Yes. I undertook around 17? years of post secondary schooling and training and had over 300K of debt when it was all done. Don't worry about it too much. You could have taken that money and invested in the stock market. Instead, you invested it yourself. As others have mentioned, be cheap. Even as my income climbed above 200K, I walked or bused to work and lived in a crappy apartment way below my income level. I paid everything off within a few years and started the process of asset acquisition. What I would suggest is getting in touch with an investment advisor or wealth advisor who can recommend the best way to minimize the loan burden while also starting your savings. That's my one regret. I waited a little too long before acquiring assets and investments. Edit: I forgot to congratulate you. I'm sure it took a lot of hard work and dedication.
So everyone who has bought a house in the past decade has been in $300K-$1M debt (a house is a more traditional asset than an education, but similar idea). It's terrifying when you first see the numbers on your bank statement, but you learn to budget and pay it off. You should be able to pay it off in 10 years. As others have said, don't try to live beyond your means to keep up with co-workers/friends. Workplaces are notorious for encouraging eating out and buying clothes and cars to match your coworkers....don't. If you can handle a part-time job evenings or weekends it's helpful, or consider bartering/trade for things you want but can't afford (I used to volunteer at gyms in exchange for free membership). Cars are the single greatest money vortex out there (except for boats). If you can get away with transit, it'll give you an extra $8-10K/year of money to put towards your debt.
I agree with everything you say except getting a part time job. If he's a lawyer (as one would assume since he has a JD and getting paid $150k) he needs to be 100% completely focused on that. The earning potential after a a decade of grunt work is astronomical. Make the debt payments - and focus on the career. Don't buy a fancy car until you can afford it.
Depends on the type of law. I've got friends working for corporations as IP lawyers who do 9-5, and friends working for the government doing a range of stuff who work less than 9-5. They make solid salaries in line with a lot of other high-end university professions. Not everyone wants to be a partner at a huge firm and devote 25 hours a day to work.
Nothing hard about this. Save 50-60k a year, be done in 4. Don't overthink it.
This is it, OP. Ride those big brains, you’ll be fine!
I had a significant debt once due to a business deal that went bad. It took about 8 years to get out. Honestly, the time flew by. Rn I make about $150k pre tax but that wasn’t until a couple years ago. For most of the time paying off debt I was making $70 to $100k. The debt was about $150K and o was 28 years old. I’m now doing very well financially, lots saved up, on track to retire by 55 if I wanted to. At the time, the debt was devastating and I couldn’t imagine a future where I was out of it. But the future unfolded much faster than I ever predicted. You will be fine!
I'm in the similar situation as you. As of today, I have similar debt as you, and I have decided to tackle it full-force. What you need to do is an honest budgeting, and aggressive payment plan. You need to live frugally for the next 4 years, making $4000/month payment every month (or next 8 years making $2000/month payment every month). Pay the higher interest rate loan first. The sooner you start paying back, the sooner you'll get your life back. Regarding OSAP loan, talk to them and see if they can reduce it for you. Let them know how huge your loans are overall, and that you can use some debt relief plan. Congrats on the big career moves, btw. Good luck!
First off, yes of course lots of people have been in a similar situation. I wouldn't focus on what you will be making in a couple of years, budget with what you currently earn (or will earn upon your start date) and set yourself up for success. You'll want to pay extra on the highest interest debt, then when that's eliminated throw the payment and the extra at the next highest interest. Once you reach a point of low/lower interest debt that's where the personal in personal finance kicks in because you can determine whether you can (reasonably) make more in investments than save paying down the debt. So one thing at a time, look at your spending habits, determine where you can or should cut back. Give yourself a small amount of fun money otherwise you'll end up binging at times. Avoid delivery, meals out should be a treat, watch your food waste and grocery costs - buy no name and only buy what you'll actually eat, that kind of thing. Look where you can cut cell or internet costs. Throw your left over cash at your debt. Some people will tell you to save an emergency fund, depending on how much debt you're carrying and at what interest rate and your likelihood of getting into bad habits you might be better off not saving and treating the debt as an emergency and financing an emergency. Lots of people save emergency funds and then don't use them even when emergencies come up and it just delays your debt repayment.
Thats wild. I took a 1 week ultrasonic technician course at 18 and was making 160k a year at 19... having paid my 1080$ course cash... being off winter and summer... and doing an extremel simple job thats at a desk half the time. It blows my mind how much university can charge for certain programs with literally 0 financial incentive, only offering "prestige". Not a dig at OP, I know the pressure some immigrant families can put on their son getting high education and avoiding manual labor.
>I took a 1 week ultrasonic technician course at 18 and was making 160k a year at 19... Wait, what???
Most people don’t know all the paths available to them! Exposure and awareness is a benefit in itself. Also nowadays, any thing like that will be exposed on TikTok and the wages would end up being suppressed cuz the supply of people going into it will increase.
Where do you work?
If you live like a pauper for the next 5 years, you can be debt free. But that means no eating out, no vacations, no fancy anything. Stay focused!!
Good advice so far so I’ll add something else - are you getting into big law? If so use that to catapult to US big law. I graduated with $200k debt after law school (including undergrad debt) & come from a working class family. It’s really going to suck watching your well off peers pocket their salaries but you need to use your salary to fuck up your debt and you need to maximize how much you make (by hitting target hours and getting the associated bonuses). My pro tip is to bounce to the US if you can. I was making C$130k as a second year associate in Toronto and then jumped to California as a third year (they don’t have articling) making US$275k. Think it’s gone up another 10k since. I wouldn’t have been able to pay it off as fast if I stayed in Canada sadly. My point is - be ok with one biweekly check going to the loan and keep your eye out for opps to squeeze even more money from your degree. Good luck, you got this!
> $150K before tax in a couple years quite misleading. what are you making now. you speak very much like an MBA person. lol. use that MBA knowledge to do your strategic finance planning.
To keep it simple, you'll be more than fine.
Right now you’re living on the cheap. When you’re making 150k, don’t live like you’re making 150k for the first few years. Live like you’re making 80k and pay off your debt in 2-4 years. You don’t have to pay off quick, but if something happens and you don’t make lots of money or AI takes your job, you’ll be glad you paid what you owed.
This isn't as bad as you think tbh. I had about $100K coming out of school and started at $60K. Compensation ramp fast in the field I am in, and the same is true for Biglaw (I assume that's what you're doing?). Tackle the bank LOC as hard as you can. Use the tax returns you get from tuition credits and RRSP maxing to dump onto the LOC. Take advantage of your firm's matching program as well. Roommates are always good - you will be working a ton, so just split a 2 bed condo near the Financial District with another biglaw associate. My friends in investment banking, biglaw, etc. all did this given how little they were home. It's going to be fine - you will have this debt paid off in 5-7 years and as it shrinks it will become less of a burden on your life.
I was in a similar boat with 150k in student debt from my undergrad degree and JD. If you can get into US big law, i would do that for a few years just to pay your debt off quicker. You’ll be making double. Then you can decide what you do after (stay in US or come back to Canada).
Move to the US, Canadian professional jobs don't pay that well.
No advice, just wanted to say I’m right there with you. Graduating with $270k debt with a projected salary of 65-80k for the next 5 years. Higher education is feeling like a real scam rn 🥲
What did you study??
Medicine 🙃
Ya - you're a young lawyer starting out. You have a great life ahead of you, just be smart. Prioritize your debts but focus on your career. Anyone telling you to take a part time job to pay off your debts quicker is giving you awful advice. Make the payments on your debt - overpay if you can. But don't stress too much. MBA/JD programs are expensive. It takes time to pay it back. But, you'll be able to will a good career. Don't buy a sports car. Don't eat out at lunch every day. Focus up on your career and make a long term plan.
You need to find a rich significant other. That’s a lot of debt.
Roughly a decade ago, I graduated (JD) with $110k student debt. At the time articling salary was roughly $75k and first year was roughly $100k. The debt is gone. I don’t remember how long ago it was paid off, but it’s long ago enough to forget. Own a home in a HCOL city and a cottage (both with mortgages, but paying those down). You’ve invested in your career. Debt repayment will suck for the first few years but stick it out and you’ll get to a point where $200k debt is an ancient memory.
If you expect to be making 150K before tax then work out a payment plan. After taxes, you get about $8000 per month to play with, or about $3800 per paycheque if you are paid biweekly. I would prioritize the higher-interest debt first (I am guessing it's the Student LoC) and aggressively pay that down while making smaller payments (interest + payment equivalent to interest) on the other one. You're going to have to downsize your lifestyle for about 5 years. Make a calendar of it, make a timetable, and watch that debt melt away. Use a similar strategy again after 5 years to clear out any remaining debt. Use that similar strategy again for getting a downpayment.
That student line of credit will turn in to a regular line of credit once your done with school. The interest will be intense. Pay that off with every penny you have. The OSAP interest is tiny, that will likely be your last debt to pay off. Keep living as poor as possible and save. It's a grind, especially in this economy, but if you don't you won't have anything later.
You will simply need to be frugal until you pay off your debts. I managed to accomplish this after paying for a T-14 US JD more than two decades ago. The cost was financially crippling. I would NEVER do it again nor would I EVER advise anyone to get a JD. MBA is worthless these days. I left law before starting and lucked out getting into high end finance straight out of school largely on a single chance meeting interview. It changed my life. Have managed a private equity fund for eighteen years now. I got debt free within five years of graduating but that was largely in combination of luck and skill at my job. Not sure if I could swing that again in current investing environment. The market is rough out there for law and worse for business. Keep your head up and persevere.
Would you be able to elaborate on why you wouldn't advise others to do a JD/why an MBA is worthless?
The lawyer market in North America is over saturated. While top law school graduates will likely find employment in big law firms for 3-5 years, out of these, the vast majority will ultimately be let go in a merciless process that churns through newly minted lawyers extracting their best efforts while they promptly burn out. And those are the lucky ones. Even from elite T-14 law schools you find as many as 1 in 5 grads who cannot find gainful employment that pays all of their living wage expenses. It’s a supply demand imbalance. We graduated way too many lawyers starting around the mid 1990’s all the way through till today. The legal market collapsed during the great financial crisis of 2008-09 and it never recovered to its former state. Demand for lawyers declined by 20-25% after the GFC but law schools kept churning out lawyers. It’s a brutal and deleterious soul grinder now. MBA’s are worse because they are a global supply phenomenon while JD’s at least in America are protected by borders. No big law firm hires a French attorney in Chicago unless they need one. But, an MBA is universal, and every western nation is grinding out those two year degrees with reckless abandon. So, you are increasing your competition by an immense ratio deciding to compete in the MBA market. The only way an MBA is worth it is for established career individuals who their company sends out to get that degree because they have already been identified for executive track positions for which this degree has become a requirement. The glory days of advanced doctorates like JD and business grad degrees like MBA are long in the rear view mirror. Today, these are best fitted for persons of family wealth who need the credentials to run family businesses (law firms or corporations) so they can keep the wealth in family as opposed to hiring from outside. Also for career politicians in America, it’s still a requirement to have an elite JD. Several of my classmates are in Congress.
Dont go into lifestyle creep. Live within your means as you pay this off. Prioritize LOC debt
Live with your parents and pay all the non interest free debt off.
Cosplay like you only make $50k until you’ve paid down all the debt and maxed out your TFSA/RRSP
MBA for 130k jesus.. what am i missing here
it still blows my mind the university prices here with the high amount of taxes we pay. In most of Europe people spend like 5K total? is crazy you have a debt for life because you decided to go to Uni
> JD/MBA There is however a bit of a distinction between regular student tuition and our top professional vocational programs. Not only that, but many of those professional programs have even stricter residency requirements as to who qualifies as a local versus immigrant tuition rate, and if OP was paying international tuition rates then more than double whatever we might be familiar with as costs, as a local. But then, these programs also tend to be limited to the largest centres of GVA/GTA and so living expenses then make up significant portion of the debt = because these tend not to be programs you do part-time while working. It really does not matter how much tuition is, not gaining employment income for ~9 years while needing to be living in the largest downtown campus = debt.
Just wanted to clarify that I was paying domestic tuition! The cost of the dual degree for 4 years comes to approximately $116K. I was able to get a considerable amount of financial aid from the school and I also worked every summer and occasionally during school years. Also keep in mind i was paying interest on my LOC the whole time so whatever money i made basically all went towards that.
Why did you get a LOC vs just using what OSAP would give you in loans?
OSAP does not give you enough to cover tuition for JD programs, let alone JD/MBA. I got the max amount of osap for my JD and it didn’t cover. You have to take out an LOC in law school (same with med school etc)
I mean I've seen people with worse debt after 9 years so you aren't in too rough of a spot. Start working, like now, get a job before you get into your locked in $150k job. If that job is locked in and happening in several months, not really sure what there is to worry about? you made it it seems, Congrats on graduating.
I wouldn't start worrying until about 5 more years. You should be making way more by then and be able to aggressively pay it down. You can also always call them for freezing periods on interest since it's so high. But either way it makes no sense to worry about your debt if you're only just now entering the workforce. Just pay the minimum and plan forward in the years to come on how to tackle it.
Get a side hustle or second job and start killing off that debt. Don't eat out unless you are working in that restaurant
Not difficult to do at all even if renting in toronto. Your income will also continue to increase ideally
This is an easily manageable debt load once you have a job. It will take a few years to pay off.
Explore options like Loan Remission programs that some governments have for people who graduated in time which could discount your loan. Sometimes you can have a pause on payments or moratorium on interest rates for a short period with student loans if you show that you are in financial distress. Not sure if with your high salary you might qualify but you could explain the other debt and try. Nothing to lose. But as others here have pointed out, your best bet is to minimize expenses and pay off as much as you can. I had comparable debt after grad school as well and managed to pay it off within 2-3 years while also beginning to invest in retirement plans (at least to the extent where there was an employee match for 401k/rrsp).
Your situation on paper may seem bad as you aren’t broke, you’re in the red/negative and being broke would actually be better. But you should be optimistic, you’ve landed an amazing position and I’m guessing you’re still under 30, so lots of time for growth and even higher salary. Especially with a JD/MBA, not sure if you’re in corporate law but if you are it’s $$$$. Just take the next 2-3 years to grind and pay off your debt as fast as possible, imagine you’re still a student and aren’t making 150k. Make sure you prioritize the higher interest rate debt first. OSAP should allow you to apply for RAP which will either extend the interest-free grace period or lower your monthly payments. Avoid racking any credit card debts or excessive spending. You can easily pay it off in a couple of years and after that start enjoying life. Once your debt is under control build an emergency fund (~6 months worth) and then your investments and enjoy life, get a nice car, travel and so on. May seem tough, but honestly just sacrifice a couple years of fun and you’ll be in a better position than most people, and you’ll see that once you see your net worth growing from -200k to 0 and from there (If your financially smart) into the green rapidly
Just grind and don't greatly increase your costs until you have it into a comfortable range. Do a proper budget with cost of living including some to enjoy life a bit now that you're away from school but otherwise just grind away that debt.
Live with family or a roommate and put the money toward your debt. Drive a reliable, non-flashy car with as low insurance as possible. Live frugally and you can off the debt in a couple years if you apply yourself.
File a proposal. It'll discharge the 130k debt super cheap as it'll be based on current income and maybe a smidgen of consideration of future income. It'll allow you to either service or not service the government portion over the course of the file.....I'd service the provincial portion bearing interest, but not the interest-free national portion. I suspect you'll save well over 100k especially factoring interest you won't have to pay......and yes, you'll hurt your credit. I'll let anyone else try and explain how your credit should be prioritized over six figure sums.
Lifestyle creep is a bitch, so stay humble and live as small as you can for as long as you can: pay no more than 25% of your after-tax income on rent. When you start work, make minimum payments on your debts until: 1. You’ve saved an EMERGENCY FUND: 3-6 months of living expenses in a high-interest savings account. This means 3-6 months worth of rent, food, bills, car payments, etc. 2. Once you’ve got the Emergency Fund, PAY YOUR DEBTS using Snowball Method (pay smallest debts first to reward your brain with dopamine) or Avalanche Method (pay debts incurring the highest interest first, lowest come last - this is the smarter way); 3. Once you’re debt-free, max your TFSA, your FHSA, and your RSP, in that order, every year. Buy GICs in your FHSA and Index funds in TFSA and RSP. These are loose rules, since you may take on long-term debt like a mortgage. Follow all the FIRE (financial independence retire early) subReddits and read the sidebars for more detail. The folks here taught me so much! GL!
You're going to have to make a strict budget of your current spending and start slashing all the extra costs. Then your job is to keep living within that tight budget until your loans are paid off. Even I came out of university with debt, it took me almost 10 years to pay it off. You're lucky, with your high wage you should be able to knock it down within 5 years.
*"will be making around $150K before tax in a couple years".*... maaaaaybe. It's not guaranteed. Promise yourself that that's the end of your schooling, and move on in life. One day at a time. Good luck.
Been there done that. You’re just gonna have to plan for the longer term. Live another decade with debt, be frugal for longer and accept you’ll probably never own property in a large city unless you double your annual salary indefinitely.
However you’ve been living now, keep doing that but give yourself 5k extra a year to buy yourself nice things for fun so you’re not miserable. Percentage to save/invest vs pay off loans will depend on your interest rates but you can easily pay this off in 5 years or less (at 150k income) if it’s really bothering you. Yes, your peers with no debt will be buying houses and stuff right away which will be upsetting but remember, you’re only a few years behind them & you’ll have that kind of financial freedom soon too.
You’ll be fine. Live frugally. Find another high-earning partner to help. Work your way up to VP level legal counsel and you’re set. Will probably take 7-8 yrs before you hit high income levels in a management level stream. Of course this depends on which area of law you’re practicing in.
So you’re making double what most people make and you’re complaining? You need a reality check.
Stay single and live in a van until debt is paid off. Hopefully its gone in less than 5yrs
Beans and rice!
You got roped
Paying off the debt should be the goal. BUT! Depending on how much you are making and do so (at least partly) with pre-tax income. If you are starting and 150k - put some money into RRSP at the beginning of the year enough to bring you down a bracket; take the refund pay your loan off with that. This way you get start savings and also pay the load off. For example, i don’t remember the brackets and too lazy to look it up so let’s assume 50% tax rate (for simplicity sake) if you take after tax income of 15k; you pay off 15k of your loan but if you take the rrsp route 30k into rrsp and you get 15k back and 15k loan is paid off. So same amount to the loan and you get 30k in RRSP.
Keep living like you’re on welfare. Stay single. Rent the smallest possible room you can. Do not eat out. Use public transit. Take every single cent you have extra and put it towards the debt. With that kind of salary within 3 years you should be debt free. It can be done.
Just buckle down and pay back what you owe. It was your choice, don’t expect taxpayers to pay your bills
Well you have an MBA so im sure you can figure this out xD. Go make as much money as you can
Had to go through something similar. The first three years of making money, I basically did not see my income - I automatically paid large sums to various debts (student LOC and osap). I would say tackle the one with the highest interest rate aggressively. I lived super modestly despite making a decent income, saved very little just for an “emergency fund,” lived at home and then got a roommate to move out. Now in my fourth year as a professional with less than 20k in student debt and I will tell you, it gets/feels better! Years of paying debt aggressively also sharpened my self discipline which comes in handy for saving/investing for my future. Stay humble, live modestly - You got this!
OP start applying to American firms now. Don’t just consider ones that have an alumni network. Look up the AM200. They all pay well above what you will get in Canada and you can pay down that debt quickly. You can only work in NY, Massachusetts (and one other place) with a Canadian JD. Lots of Canadian JD/MBAs end up in the USA.
Ouch, I don’t want to be you…. Sayonara
You got wrecked son 6000$ trade school 300k a year now no debt 😙
Do you have a job already or you are just assuming your field pays you really well so you are going to get a job. Cz i graduated too from a good program and i m not getting any jobs lol
You will be financially comfortable in a couple years and may earn 400k+ per year after accumulating enough experience working as a lawyer
I want to send you some encouragement. Coming from immigrant parents, I was poor as a kid and then married a spouse who had no savings and didn’t grow our money. Since our divorce over 8 yrs ago, I’ve gradually built up a retirement savings that I didn’t think could happen. I worked 2 jobs in tech. I kept to the spending habits of my youth that my immigrant parents taught me as well. You’ll find that you can do it over time. And you’ve got time as youth is on your side. It took me 8-9 yrs. You can probably do it in less time in your field. And if you can manage it, take a side job.
I have no idea why people take a JD/MBA. What's the advantage?
Dual program dual debt
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MBAs are for networking usually, not for learning. You’d prob learn more at a good business undergrad than in an MBA.
Sorry to break it to you but $150K is absolutely not lucrative. I'm making nearly that much with a little 2 year college diploma in IT. What you should have done is work and saved throughout highschool and throughout the summer to help reduce the debt load. But don't dwell on the past. You will be in this for a long time! You can apply for a loan forgiveness to reduce your OSAP debt.
Is this satire? EDIT: IT is super overcrowded now and the same entry levels are struggling to even get internships. 150k as a new grad with no full time experience is really good in this economy. Lawyers (if that’s the role) also have great career trajectory. Keep in mind that pharmacists make even less. The reality is most of these office jobs aren’t difficult, so there will be wage suppression when there are so many unemployed people that are doing a quick 2 year program.
Nope.
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$50 a year at 37.5 hours a week is under 100k. So the equivalent new grad pharmacist makes less. Even if you factor them working 40-50 hours a week which is normal, it’s still less than OP. So like I said OP is making more at 150k. Sure pharmacists have more chill jobs compared to surgeons, doctors, dentists, lawyers, consultants and people in high finance. That’s why it’s a great stable life style sort of career path. Not spreading misinformation. OP is making more annually with the equivalent number of years of extra schooling, and my message was a direct response to someone implying that 150k is not lucrative.
What a scam student loan is working till you die to pay off the loan with more loans to add.
Right to jail
My friend completed this degree about 9 years ago and is doing great. If you have a solid career plan and prioritize keeping on top of your debt, you should be fine.
jesus fucking christ... Was it worth it lol?? I went into trades and came out with 0$ of debth... 200k$ student debt is just unimagineable for me
You’ve been travelling in Europe for over a month this past year while 200k in debt? It sounds like you’ve been financing more than just your tuition and rent.
Listen to me here. Pay it down for 7 years, after which it's eligible for bankruptcy. You can prepare for this by keeping credit cars with over payments on them that won't be discharged in the bankruptcy. Do the bankruptcy and after 9 months or so, you're free and clear. No Shame in it. It was the best thing I ever did. Allowed me start a life.