Dwayne Thomas learned all about the stock and bond markets as a finance major at Baruch College in New York. But a bachelor’s degree in finance doesn’t mean you’ve learned anything about managing your own money, he says. At 36 years old, Thomas is at a crossroads. He’s recovering from a mid-recession layoff by going back to school to pursue a law degree at Brooklyn Law School this fall.
“I am very fortunate; much of my tuition is paid for by grants, scholarships, and a fellowship,” he says. The cost of the 2010–2011 school term is $43,990. Thomas received around $33,000 in grants, scholarships, and a fellowship, in addition to $20,000 in school loans, leaving him with an extra $9,000. The grants and scholarships were merit awards. One scholarship is need based, which he received after submitting a financial aid application. All of the rewards are renewable, provided that Thomas maintains a class standing in the top 40%.
Once he graduates from law school, Thomas won’t be looking to collect a big paycheck. His plan is to open his own legal aid practice and work as a public attorney. Thomas is well aware that his salary as a public service lawyer will be lower than his fellow graduates who join large private firms. The average starting salary for a legal aid attorney is $40,000. Private firm attorneys start with an average salary of $125,000.
“I grew up with people who had a lot of legal problems,” explains Thomas, who grew up in public housing projects in Queens, New York. “I am looking to help the people in my neighborhood.”
Beyond his career aspirations, Thomas needs a viable plan for saving and investing for his future. Earlier this year, he was laid off from his $44,000-a-year job as an insurance salesman with Geico. He is currently collecting unemployment benefits totaling $1,720 per month. He shares a two-bedroom apartment with his mother and his living expenses add up to around $900 a month, which includes his $301 monthly car payment. Thomas’ debts total $13,600 (with about $12,000 left to pay on the car loan for his 2007 Ford Mustang and some $1,600 on credit cards). He has been paying $500 a month toward his credit card balance which he will have paid off by September of this year. In terms of savings, he has about $1,100 in checking and savings accounts combined, $4,308 in a stock portfolio, $2,548 in a bond fund, and $19,000 in a 401(k) from his former employer.
Thomas’ short-term financial goals are to pay off the car loan. Even though he has limited income he wishes to help his mother pay down her $15,000 credit card debts as his way of giving back for all that she has done for him.
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