Putting Yourself Last...
In the business of law, you need to put your personal self last—or, at least, you need to put your business first. In order to have a successful business, you need cash flow, and thus you must prioritize expenses to achieve this.
First come the needs of the practice. This is first because without the practice, there is no source for personal needs.
Second are the lawyer's personal needs as reflected by the draw or salary—that is, all of the expenses required by you and your family to maintain your style of living. This expense should be the most flexible: if the practice produces sufficient income, then you can increase your standard of living. But the better approach is to avoid committing yourself to extensive obligations from which you cannot retrench in time of need.
The next expense in the hierarchy of expenses is savings for the "valleys" of the practice. During each month, some funds should be set aside to carry the practice through leaner times. These valleys are typically temporary interruptions of revenues caused by either a transitory shortage of funds from clients or a temporary lull in their legal requirements that shows up as an unsteady flow of funds to the lawyer.
Personal savings for unexpected emergencies or for retirement are important, too. Too few of us are independently wealthy or maintain a second business activity that will provide ready funds for unanticipated uses down the road. Therefore, the best approach is to set aside a small sum each month and forget about it.
And last, but not least, is the "gravy." After setting aside funds for each of the above categories, the balance should be considered a bonus. This is the money to reward yourself with a trip, a purchase of something special for you or the business, a speculative investment, a charitable contribution, etc.
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