Almost Graduate with no Liquidity - Any help much appreciated!

Lprettyfrugalbro on 29/06/2017 - 17:34
Last edited 01/07/2017 - 13:43

Hi beautiful people of Ozbargain,

Long time lurker first time poster, I've tried to make sure this subject has not been covered before, somewhat following on from this thread; Suggestions for Low Rate $10k Loan

Basically I have a Graduate job lined up with one of the Big 4 in early February. I've been supporting myself through part time work/youth allowence at Uni ever since I moved out of Tasmania so I've only ever had about $2000 in the bank and likely will not have more than this before I start.

I want to enjoy my last summer of being free (cheeky island hop around SEA?) as well as be able to pay for some suits/shirts and costs for moving closer to the city.

What I want to know from the experienced community at OzBargain is;

What product and time frame should I go for from the following:
HSBC 10%p.a personal loan of $3000/6000? maybe over 1 or 2 years
Citibank Ready Credit of around $3000/6000
Some sort of 0% BT credit card* and transfer my commonwealth balance after some time?

*I currently have an $8000 limit on a Commonwealth credit card and a $2000 limit 28 Degrees card. I have never misused these cards, and simply have them for reoccurring bills or emergencies.

I have read up on the early 6 month cancellation costs of the HSBC loan and most of the Citibank credit terms.

I have been racking my brain and researching for quite a while and it would genuinely mean a lot if you could point me in the right direction or give me any advice as I'm getting a bit stressed about it.

Thanks again.

Financial

Comments

  • John Kimble on 29/06/2017 - 17:48
    +20

    I don't think many people would recommend getting a personal loan unless absolutely necessary…how do you know you will even get approved?

    • prettyfrugalbro on 29/06/2017 - 17:55
      +1

      Sorry I should've mentioned that I got preliminary approval for the HSBC one just to test whether I would qualify, I'm also using the contract I've signed with KPMG as some security for it.

      I'm happy paying a moderate interest rate on it only because I can pay it off somewhat early. Its mainly the fact that I need the liquidity before February because then I should be quite liquid.

      • Scrooge McDuck on 29/06/2017 - 22:05
        +2

        Its mainly the fact that I need the liquidity before February because then I should be quite liquid.

        And if not, you could always jump into a vat of hydrochloric acid. :)

        • jsediv on 30/06/2017 - 16:02

          Or a bath of hydrofluoric acid :)

  • kywst on 29/06/2017 - 17:55
    +1

    How will you afford the repayments on said loan?
    Banks won't take future paid job prospects into consideration … generally the eligibility criteria stipulates you must be gainfully employed and for a specified minimum duration.
    How irresponsible are CBA for extending your credit limit to what I can only guess to be 50% of your annual income?

    • prettyfrugalbro on 29/06/2017 - 17:58

      That's basically what I'm asking, I can afford lower repayments per month over a longer term period of the loan, say 2 years, but I'm also worried about the repayments over a year long loan.

      Its more like 25% of my annual income, but that's the limit they gave me when I plugged in my financial information. I don't use the credit card at all except for some reoccurring bills to boost my credit score.

      • kywst on 29/06/2017 - 18:00

        Most personal loans are 2-5 years in duration. Elect for 5 years and choose a lender that won't charge you for paying off early. Check RateCity to get an idea.

  • khell on 29/06/2017 - 18:03
    +30

    Going into debt to go on holiday… :/

    • prettyfrugalbro on 29/06/2017 - 18:06
      +7

      Everyone I spoke to at professional service firms said their regret was not going on holiday/enjoying themselves before they started 2/5 years of working at the same firm.

      I'd rather use some of the money I will be making so I can go into a job satisfied and happy. Maybe I'm in the wrong mindset, I dont know.

      • kywst on 29/06/2017 - 18:10
        +17

        If you're an FTE you'll get 20 days annual leave a year … string it over public holiday blocks and travel while you're still getting paid …

        • Blahness on 30/06/2017 - 14:57
          +8

          I've been here, it's very sad calculating annual leave days and try to work around public holidays and paying overpriced fares. No freedom at all, makes working feel that much more depressing.

        • dannyboi on 02/07/2017 - 07:53

          @Blahness:

          My current company and previous company offered purchased annual leave. It's basically unpaid leave but allows you to plan ahead and spread the cost over the year.
          This could be an option for the OP.

      • khell on 29/06/2017 - 18:14
        +4

        I also moved from Tasmania so I know what it's like having to pay for everything while your friends get to keep 100% of every cent post-tax and live rent and utility-free off their parents - in many cases even after they start their graduate jobs. I still think this is a bad idea.

        You don't know what will happen between now and when you actually start. What if they rescind your offer? What if something happens to you and you can't work? Most "professional service firms" have salary sacrificed leave options where you can buy additional leave at a discounted rate. Or you can just take unpaid leave once your annual runs out. There are other ways to take a long holiday.

        • prettyfrugalbro on 29/06/2017 - 18:19

          Pretty much exactly what it feels like haha, I feel I drew the short financial straw.

          This is good advice, I guess I might have to change the way I'm thinking about it. I guess I'm also a bit pissed that I'm going to still have to work pretty hard up until I start my job so I wont get to enjoy the summer as much but I guess that's the cards I'm dealt.

        • Xastros on 30/06/2017 - 17:09
          +5

          Be careful. While most big professional services firms have policies which allow purchased leave and unpaid leave, actually getting them to approve you taking that leave is often another matter. Accountancy firms work you very hard and the work culture at your particular firm may make it such that even asking for unpaid leave or purchased leave would be frowned upon.

        • virhlpool on 01/07/2017 - 15:20
          +1

          @Xastros: There you go Australia (or at least Sydney) work culture.

        • Xastros on 05/07/2017 - 17:03

          @virhlpool: I work in Perth but I'd imagine it's the same in Sydney.

      • mskeggs on 29/06/2017 - 18:15
        +8

        Indeed. Imagine being locked away at the same employer for 2 whole years with only 8 weeks of paid leave in that time. It would truly be a major life regret.

        • airal3rt on 29/06/2017 - 18:28
          +4

          You can lay on the sarcasm as thick as you like, but capitalism is essentially paid slavery so I'm not sure why you're mocking someone who wants a brief taste of freedom before becoming a labour mule.

        • whooah1979 on 29/06/2017 - 18:35
          +4

          Imagine being locked away at the same employer for 2 whole years with only 8 weeks of paid leave in that time.

          eight weeks over two years is more than what many australians get. try running a small business. the only vacation times they get is public holidays.

        • [Deactivated] on 30/06/2017 - 00:00
          +3

          @airal3rt: the "brief taste of freedom" is basically what capitalism has you on hook as a labour mule for.

        • mskeggs on 30/06/2017 - 07:05
          +8

          @airal3rt:
          Borrowing for a "taste of freedom" is nuts when it locks you in to repaying the cash.
          If you think capitalism is paid slavery, then keeping yourself out of debt and building up capital is the only solution to servitude. Step one is not to go into debt for a costly vacation.
          OP can work some extra shifts leading up to Xmas, save up and have a cheap holiday in January without needing to spend future earnings.

        • Xastros on 30/06/2017 - 17:09
          -1

          @airal3rt: Slaves don't get paid that's the difference.

        • random12 on 30/06/2017 - 22:41

          @airal3rt:

          Strange how capitalism is "slavery" but you mention absolutely nothing about taxes (income taxes up to 50%, and then all the others as well, GST, Stamp Duty, License and Registration)

        • virhlpool on 01/07/2017 - 15:26

          @whooah1979: Running a small business or becoming a corporate slave is a personal choice though. Of course, both options do come with their pros and cons. With one you don't take a longer vacation willingly whilst with the other you aren't allowed to take more.

        • banzini on 01/07/2017 - 18:38

          @lolbbq: yup agree!

        • [Deactivated] on 01/07/2017 - 19:26

          @random12: He is probably the guy that thinks not "getting everything for free just because he was born" = slavery.

        • [Deactivated] on 01/07/2017 - 19:59

          @Xastros: Slaves don't get holiday too.

      • whooah1979 on 29/06/2017 - 18:23

        Everyone I spoke to at professional service firms said their regret was not going on holiday/enjoying themselves before they started 2/5 years of working at the same firm.

        how old are these people? gen z, y, x or b boomers?

        • prettyfrugalbro on 29/06/2017 - 18:25
          +1

          Mostly z, y, x but I've had a lot of people in their 30's that I look up to because of where they are and their ethic. They said to really enjoy your last summer because basically you're going to be married to the job.

          The firms also going to pay for my Accountancy qualifications so I'd be an idiot not to stay there for the next few years and take that on.

        • whooah1979 on 29/06/2017 - 18:30

          @prettyfrugalbro:

          KPMG

          i assume that they're working at this place and that their net household income is above the australian average.

      • Blahness on 30/06/2017 - 15:07

        Yes! Just do it! but don't get into debt for it. I spent $1500 for a month in SEA including flights (but it could have easily been less). I think airfares to Asia are very cheap (~$400) in November- mid December (when exams finish). hostels are around $10/night.

  • mskeggs on 29/06/2017 - 18:12
    +16

    Get some extra shifts, cut back expenses, save up.
    You can work all of the Xmas rush, and save your pay. Then take 3 or 4 weeks cheap holiday in Vietnam, Cambodia, Thailand etc. in January. $600 in airfares and $50 a day budget gets you done for well under $2k.
    Get some cheap suits made in Asia for a few hundred each.

    Why go into debt and not even get all of your first pay packet?

    Imagine if you decide after month that KPMG was a big mistake, but you already owe $10k!

    • prettyfrugalbro on 29/06/2017 - 18:16
      +1

      Thanks for the advice, by the sounds I might have to change my mindset a bit. I guess I could use the credit card for some domestic expenses too when I get back.

      Yeah I agree, I guess I'm just the kind of person with the work ethic that I will be there for at least 2 years+ because they will pay for my Chartered Accountancy too so it makes to much sense.

  • bl1027 on 29/06/2017 - 18:30
    +13

    I think you need to get out of the mindset of spending money you don't have. Next, you'll be wanting to go into debt for a car. These things all add up. And before you know it, you'll be stuck working for the next 40 years to pay off your 'lifestyle'.

    By all means, go on a holiday. Treat yourself and rest up before you start work. But spend within your means. You can easily go to SEA on $2,000. You need to start your career with one foot in front, not behind.

    • Munki on 01/07/2017 - 01:30
      +1

      If he buys an Audi, he'll make that back in no time.

  • onetwothreefour on 29/06/2017 - 18:46
    +24

    Don't forget to buy an $80k car before you start working too.

    • 7olo on 30/06/2017 - 22:09
      +5

      This never gets old…

  • Mr Kite on 29/06/2017 - 18:53

    First thing to do is sort out what you want to spend - how much will you spend on travel, how much on a suit and shirts?

    Once you've done that, figure out what your options are. Use one of MoneySmart's repayment calculators to determine a payment plan to pay it off quickly.

    I would not be taking out a loan, if I were you. Then again, I didn't have two credit cards before I had even landed a grad job…

    Your comment that you got pre-approval for the HSBC loan, just to see if you could, rubs me the wrong way - that application is now sitting on your credit report for the next five years, along with the CBA and 28 Degrees cards. If you want credit in the next five years, it may be more difficult to obtain and may cost more.

    In summary - have fun, but ease up on the credit.

    • Mr Kite on 29/06/2017 - 18:57
      +1

      Oh, and Oxford has some nice suits at 60% off until next Wednesday. You should pick one up for a very reasonable price. They are 100% wool.

      • TheOneWhoGotAway on 01/07/2017 - 11:29

        awesome, are you talking about the official Oxford online shop? http://www.oxfordshop.com.au/shop/shop.aspx?CatId=3059&sld=1

        The shirts at least seem much more than 60%, and quite good for 30-$40 if they are durable.
        Question though, does 100% cotton crinkle the least? I've had some annoying shirts that crinkle up within 30mins of wearing which is quite a bad look.

        • Mr Kite on 01/07/2017 - 12:30

          I bought a pair of pants yesterday and have previously had an Oxford suit and Oxford shirts. The shirts I had were 100% cotton and crinkled up like crazy. They were also difficult to iron. I bought them perhaps three or four years ago - they may have improved since then. They were a good fit, though. And I still wear them sometimes, so they are durable.

        • John Kimble on 01/07/2017 - 13:24

          @Mr Kite: Yep, the couple of business shirts I bought from there are deadset made from patented instacrease material that you can't really iron out with a consumer iron. Never again.

        • TheOneWhoGotAway on 04/07/2017 - 09:31

          @John Kimble:
          Dam, you guys know what materials to look for so that the shirts are easy iron and not so crinkly?

        • John Kimble on 04/07/2017 - 21:35
          +1

          @TheOneWhoGotAway: Sorry, not really an expert. I now usually just go and feel/crunch up the shirts instore to get an idea. I know 100% cotton and linen are a bitch usually.

    • prettyfrugalbro on 29/06/2017 - 19:00

      Thanks for your advice, I am certainly considering avoiding credit if I can given some of the above advice.

      I've been paying all utilities, rent, bills on time for the last 5 years since I was 18 and I've never misused my credit card so I guess thats something towards my credit?

      • Mr Kite on 29/06/2017 - 19:03

        Unfortunately, not - Australia only recently introduced positive credit reporting and many banks don't yet participate. That means your credit report will currently say you've had at least three enquiries, along with the amount of credit you applied for. It will list no defaults. There's not much else to it, I'm afraid.

        But of course it is good that you're responsible with your credit card.

        Also, seriously get onto those suits. They're good quality.

        • prettyfrugalbro on 29/06/2017 - 19:07

          Ah ok good information to know, I'll keep this in mind for any future credit queries, thank you.

          I just looked at their site, sale looks great, I'll try head into a brick and mortar to try some sizing!

  • Randxyz123 on 29/06/2017 - 19:58
    +4

    Try and pick up some extra shifts at work.

    As a current graduate I highly recommend you have fun this summer. Ignore people saying don't travel. I'm not saying going into debt, you don't even need to go overseas but start building your savings if you can and then resign from your old job in early Jan. Then do a road trip somewhere in Australia.

    • prettyfrugalbro on 29/06/2017 - 20:10

      Thanks mate, good to hear from a graduate. This is some advice I'll really take onboard, cheers.

  • redfox1200 on 29/06/2017 - 20:10
    +4

    you have just spent the last 3-4 years of your life studying and now have landed a good job, if you want to enjoy your summer then you should do it. you should earn decent money as an accountant and you obviously know how to budget. you could probably pay off a 10k personal loan in 12 months, you wont likely get the opportunity to do it again. you can always refinance with a 0% balance transfer next year after you have started your job and gone back to frugal mode.

    • prettyfrugalbro on 29/06/2017 - 21:44

      Thanks, this is what I was orginally planning. Its been a struggle over the last few years so enjoying some time off would be really good! Cheers.

  • Banana on 29/06/2017 - 21:09

    Not related to the topic but I am interning at KPMG this Dec-Feb, I wonder if we would cross paths! (wave)

    • prettyfrugalbro on 29/06/2017 - 21:43

      Good on you! What stream did you make it into? I'm in Mgmt Consulting area :)

      • Banana on 29/06/2017 - 21:43

        Data analytics!

        • prettyfrugalbro on 29/06/2017 - 21:44

          Congrats! I've heard a lot of interns end up getting grad positions so you've done really well for yourself and your future!

        • Banana on 29/06/2017 - 21:46

          @prettyfrugalbro:
          I've got my fingers crossed for this one! I feel like I only got the interview because of the course I am studying(Data science, everyone seems to want to be a part of it right now).

          Did you go from intern -> grad?

        • prettyfrugalbro on 29/06/2017 - 21:52

          @Banana: Yeah honestly great field to get into, especially in one of the big 4, if you get training with them you'll have a lot of doors and connections open for you.

          I'm one of the few that didn't actually, I think I just got lucky with interviewing and I have some management experience so I think that went well for me! But they always love intern->grad because they already know whether youre a good fit etc. etc. but good on you!

        • Banana on 29/06/2017 - 21:53

          @prettyfrugalbro:
          Thanks for the kind words! I hope everything goes well for you as well!

        • Scrooge McDuck on 29/06/2017 - 22:22
          +9

          @prettyfrugalbro:

          @Banana:

          👨‍❤‍👨

        • PAPower on 02/07/2017 - 22:49

          @Banana: Is there even a bachelor of data science in specific? I thought of going into this as well after few years in accounting.

        • Banana on 02/07/2017 - 22:52

          @PAPower:
          Monash offers Master of DS. My understanding is that they are trying to come up with Bachelor of DS in the next 1-2 years.

    • RedLights on 02/07/2017 - 01:32

      data analytics in management consulting or in the audit stream?

      • Banana on 02/07/2017 - 22:36

        It's under "Advisory".

  • TheBilly on 29/06/2017 - 21:47

    Christmas, Australia Day, Easter … three blocks where you can take 1-2 days of leave extra to the public holidays, on each end of it and do some travel. Why get in debt to travel with the mindset you may never travel once you start? Just book your leave a few months in advance and travel in those blocks.

    • stirlo on 01/07/2017 - 21:48
      +1

      You can't have the same experiences overseas with quick long weekend style trips. Take a full month or 3 and you get to experience real freedom before starting at a monotonous career…

  • [Deactivated] on 29/06/2017 - 23:58
    +4

    why is spending money "to be free" so glorified.

    It will truly be your last summer "being free" if you start of your work life going into debt.

    There will always be that one more expense, that one more reason to activate your reward pathway.

    Don't let mainstream culture tell you what you need to be happy.

    Have you seen all there is to see in Australia?

    I've been around most SEA countries, there is nothing much to see there and 90% of the time, it won't be like what your friends are showing on their instagram.

    • John Kimble on 30/06/2017 - 07:19
      +13

      I've been around most SEA countries, there is nothing much to see there and 90% of the time, it won't be like what your friends are showing on their instagram.

      You're doing it wrong.

      • [Deactivated] on 30/06/2017 - 10:50

        I suppose I am, I don't like crowds and I find very few attractions worth putting up with the crowds for.

        To each his own shrugs

  • poptops on 30/06/2017 - 08:21
    +3

    I spent a year on exchange during my final year of uni and spent a couple of weeks in Melbourne before starting my grad role at KPMG (I've now left). I'm so glad I did those things and I would also encourage you to make the most of your summer before your slavery begins.

    But also bear in mind that KPMG has a closure period in December where everyone is required to take leave for at least 2 weeks so you will still be able to take your holidays, but it'll be costly as it's during peak.

    Definitely wouldn't advise you to take out a personal loan just to travel though. Just budget smart and try to take a short, cheap trip in SEA for now :)

  • dasher86 on 30/06/2017 - 08:44
    +1

    How long do you want to travel for is the most important question.

    The biggest outlay will be the flights.
    If you can get under $600 return that would be a good start.
    Add another $200 for internal transport.

    Accommodation if you're willing to slum it is easily <$10 a day.
    Food probably another $10 if you're willing to eat street food.
    Alcohol depends on how much you drink but can be the biggest outlay depending which bars you end up in.
    I'd personally avoid 'island hopping' if i was on a budget and wanted to travel for a decent amount of time.
    My suggestions might be hard if this is your first time travelling through SEA and not understand how to do this.

    Suits range from about $80 USD but don't go to a tailor without at least reading a few things online about getting a suit custom tailored.

    For two weeks - three weeks $1500 should be okay.

  • Mrgreenz on 30/06/2017 - 12:20
    +5

    Whats all the talk about liquidity. Making youself sound like a large corporation with all the capital tied up in long term deposits and fixed assets.

    You need some cash for a piss up mate.

    Just get a a personal loan over 2 years or pick up some work in the meantine.

  • idonotknowwhy on 30/06/2017 - 13:30
    +1

    Get a free ING direct account with a $100 referral code.
    You'll have AU$100 worth of liquidity :)

  • McWillisac on 30/06/2017 - 13:55
    +4

    Wow. I guess I'm not surprised with the reprimanding going on here from our "senior" members; this is after all not the forum for anything other than frugality.

    I did exactly the same thing when i finished med school. Go out and enjoy yourself, you'll come back refreshed and ready to kick some ass in the new job. You've been busting your gut for years and you're worth more than a shitty weekend away - you're body and mind need a break. At the end of the day 10k is peanuts, so if you're confident of the security your job offer has given you then go for it i say.

    לחיים - "To life"

    • Bren20 on 30/06/2017 - 14:52
      +2

      agree with this, it's not an unreasonable thing to do, at the moment you are time rich and money poor, the opposite will be true when you start working. I don't have any answers for the best way to borrow money, but i think it's a good idea.

      The rates quoted by dasher86 are going to be very tight - plan for $50-100 per day in SEA, + flights. $50-100 isn't going to be luxury though, it's still on the cheap end.

      Don't buy any $80 suits, you can get crap suits cheap in Australia too.

    • prettyfrugalbro on 01/07/2017 - 13:26

      Thanks a lot for this, In my mind I'm young, time rich and about to give my all to a job for the next chapter of my life.

      To life indeed!

  • R-Man on 30/06/2017 - 15:19
    +1

    Hi mate congrats on this awesome job you've landed!

    Before starting my grad role, I did a 3 week trip of America with 5 friends, thinking like you are: that I won't be able to do this again.

    Then, in my first year of the grad role I learnt that we are encouraged to take our full 20 days leave. No such policy of "you're just a grad you shouldn't take leave". So then I visited family in Europe for about a week in September!

    Of course the pre-grad trip was amazing and definitely had the feeling of freedom you describe - but I would say a big hell no to taking any trip on debt. I recommend you take some of your encouraged 20 days off mid way through the year and see South East Asia while still earning money :)

  • syousef on 30/06/2017 - 15:43
    +3

    2 bits of advice.

    1) Keep your employer's name out of your posts. Companies have become very sensitive about social media and once you've signed up you're likely bound by their code of conduct, media policy etc. "A major services" firm would have been wiser than "KPMG".

    2) Find a cheaper more local holiday, so you don't have to go into debt for it. I'd say find a casual job but I know youth unemployment is sky high…still depending on where you go there might be a niche you can fill one or 2 days a week that can keep you on holidays for longer.

    • Renting a holiday house off season (with good friends to spread the expense if possible) is one way.
    • Visiting a relative is another or staying with a friend is another way. (Do contribute something to groceries or buy a thank you gift).
    • Find somewhere not so touristy and go fishing. No fishing license required for recreational fishing in QLD for example - You can go fishing on the beach! $30 for a rod and a few dollars a day for bait. Bad weather days you can watch TV or Youtube if you have mobile data. Take a bicycle if you own one and use that for getting around locally to save petrol.

    Possibly to avoid:
    - Backpacking/hostels is yet another money saver, has it's own dangers - from bed bugs to being robbed.
    - Then there's casual work like fruit picking and the like, but that's work and you're likely to be exploited.

    I'm not even sure you'll get approved for a load without showing pay slips from your job.

  • Lexus101 on 30/06/2017 - 15:48

    Hi There,

    Preface by saying I have not read all the comments here.

    My advice is simple:

    1). Holiday locally on the cheap.

    2). Do not take any loans whatsoever (especially for a holiday!)

    3). Work diligently for a year, save up and go for your holiday afterwards with leave accrued.

    You would have missed out on nothing but delayed your holiday and given yourself a chance
    to steady yourself at your new employers, and not be in any debt.

    That's it. Take out of it what you will.

    I have passed through this road and I did just what I mentioned here.
    Hope that helps you. Cheers.

    • Chumpmaster on 30/06/2017 - 16:10
      +5

      Most times holidaying locally would cost about the same or even more expensive than a cheap trip to south east asia

  • ironclad on 30/06/2017 - 16:33
    +7

    Probably naive of me given this is OzBargain, but surprised and somewhat irked re how many negative responses there are on this thread to the idea of borrowing money for a post-uni-pre-work holiday :-/ Especially given the OP appears to be responsible with debt, given the credit card comment.

    "Living" off a never-ending funnel of debt is clearly a bad thing, but there's nothing wrong with debt used the right way - which is not just debt used to produce income, but also debt used judiciously to "buy" something that is worth more to you than the cost of the debt. What fits into the latter category is a personal thing (and of course many people get it wrong, thinking what they're buying is worth the cost but later regretting it), but taking a one-off opportunity to backpack around SEA for a couple of months post uni is a far, far cry from buying a new BMW or your third flat screen TV.

    Anyway: OP, only you can decide what's right for you, but in my opinion you should absolutely, positively go on the holiday. Try not to have to borrow money for it if you can, but if you have to, go for it anyway.

    It's extremely rare to have the opportunity to travel for a few months (before retirement, at least), and you should grab it with both hands while you can - even if that means borrowing some money. The two months I spent travelling between uni and starting full-time work are some of the fondest memories of my life, and most everyone I know who did the same thing thinks the same. I didn't have to borrow to fund my trip, but even if I had I would not have one shred of regret about it. The only regret I have is that I didn't travel for longer!

    A couple of personal recommendations:

    1) Do it as cheaply as you can - i.e. backpacking. Obviously doing it on the cheap is financially sensible, but it's also an incredibly fun way to travel when you're younger. You meet lots of people, you go to places and see things that many travellers don't, and it feels like much more of an adventure.

    2) SEA island hopping is a good plan, but try to avoid the crowds. Do your own research, but avoiding any island with an airport is a good start.

    3) Don't pre-plan too much of the trip (or, any of it).

    Regarding your loan question, I can't help you with specific answers but you are definitely on the right track. In your position - and assuming you trust yourself to be responsible re repaying it the way you intend to - it would seem most sensible to take out the cheapest loan that doesn't penalise early repayments you can find, over a term long enough that you can afford the repayments in the short-term. And then aggressively pay it down once you're back from the trip and working full-time.

    Good luck and have fun - I'm a little jealous!

    EDIT: OP, all of the above is premised on my assumption that you're talking about travelling for a couple of months over summer. If not - if you're only talking about a couple of weeks - my opinion may be different (save first, holiday later) as that's entirely doable whilst simultaneously holding a full-time job.

    • prettyfrugalbro on 01/07/2017 - 13:31
      +1

      Thank you, this is definitely something I was a bit effected by receiving some of these responses. I'm not an idiot, I've never misused debt, I'm just in a money poor time rich period of my life before I start to be quite money rich time poor haha.

      Thanks very much for the comprehensive reply, if I did borrow any money I would definitley be looking at something that doesnt have fees/penalise early repayment as that's what I would be looking to do.

  • [Deactivated] on 30/06/2017 - 16:38

    Here on the mainland we might get an allowance, but at least you're racking rather than wracking your brain.

  • ssyl9 on 30/06/2017 - 16:54

    This is the reason why so many people are in debt now and have no way of repaying.

    People who want to have fun before they earn it but don't have any capital to do so.

    There is no guarantee that your grad position will fall through to permanent pos (since economy is that bad), nor any guarantee that you are not gonna run out of money from repayments and start raking up huge interests.

    I for one will not take the risk. Potentially getting a bad credit history before starting to even work is a stupid move no matter how you look.

    IMO only borrow money to buy assets, or investments. To me, even lending to get a car is a waste if you can pay outright for a cheaper option, since cars are depreciable.

  • Xastros on 30/06/2017 - 17:23
    +7

    Ignore all the hate and condescending posts. I think what you are proposing is completely rational.

    You have landed a good job. In the long term $3k-$6k is not going to make a huge difference to your finances. Just do it.

    I agree that it shouldn't be your usual mindset to borrow to get what you want right now but in this case, you will not get another chance probably until you retire to have true time off that's unencumbered and you are not thinking of problems at work or when you can take annual leave. Just don't be doing all the time and into the future. Think of it as a once off.

    I am generally very frugal, I never pay interest on credit cards and good at saving etc. Paid off my house in about 10 years and I don't earn much (less than 6 figures). However I have learned that just because something isn't an investment or isn't going to make you money or isn't value for money doesn't mean it's not worth spending on if it will bring a lot of happiness. Life is not just about saving and making money. It's just a series of moments, every moment you spend happy is a win.

    Let me put it this way to you. In 10 years' time you might well regret not taking this holiday. If you do go on the holiday, in 10 years' time it's very unlikely you would think to yourself "I wish I hadn't spent that $3k 10 years ago on that holiday".

    • John Kimble on 30/06/2017 - 17:52
      +1

      A nice counter argument, especially the last paragraph.

      I think most people here (being a bargain website) are just against the principle of "spending money you don't have" in general. It's a risk, because no one knows what the future holds. If one is happy taking that risk, then go for it. You only live once!

      Regret is probably something that most people end up having in their lives for whatever reason, but pretty hard to avoid.

    • prettyfrugalbro on 01/07/2017 - 13:34

      I could not agree more with your last sentence, In 10 years I'm a lot more likely to regret not making memories then that $3k I'm richer.

      Really healthy view of the money/life trade off, thank you.

      • stirlo on 01/07/2017 - 21:38

        100% do it. You will never have free time again like you do now.

        People can talk all they want about purchasing leave, salary sacrificing & flexible work but the reality is once you start your career you'll never really be free to do this again. Once you start your job you'll be easily be able to pay off a $10k loan and the only thing that could go wrong would be the lose your employment. Even if that happens by far the bigger concern is why you lost your job with the big 4 than a measly $10k debt. You're obviously switched on enough to finish your studies and land a job at KPMG so you should certainly be able to manage the loan repayments and save enough to pay it back relatively quickly.

        That said don't go out blowing money on 5 star experiences when travelling. Book into a midrange backpackers/budget hotel for less than $50 per night in Asia and just travel around for a while. You won't break the bank and you'll have some life changing experiences.

  • MessyG on 30/06/2017 - 18:50

    I am not against going on holiday by any stretch but I would feel uncomfortable taking out a credit card or personal loan to do so before I had started in a job. These jobs have a 3 month probation period that you have to pass to keep said job - they can fire you at any point within that three months. For that reason I'd feel quite nervous going into debt. I understand wanting to go on a holiday before entering full time employment but it's not so bad. In my first year of work I saved up all my pay, and took my four weeks of annual leave and went to Europe on the cheap. Getting paid while on holiday with 17% loading was good! In my second year of work, I saved up all my money and took four weeks off and went to Hawaii and New York. Also great!! After that I started getting a little bit indispensible so wasn't allowed to take all the leave at once anymore and haven't been able to do it again.

    Consider this if your work will let you take your four weeks at once, and do it every year until they wont let you anymore or you decide you want to save for something bigger. I recommend not getting into debt in your twenties if you can help it. Have a read of The Barefoot Investor - that book changed my life.

  • echelon6 on 30/06/2017 - 19:11
    +3

    See you in a few years complaining about housing affordability.

  • down-under on 30/06/2017 - 23:29
    +1

    If you only need a few thousand bucks and you have 8 months time, why not simply do some extra part time works? You'll get what you need in one or two months.

  • pulpfiction on 01/07/2017 - 06:10
    +1

    Do it!!! You're at the start of your career, therefore the risk is the lowest you'll ever experience in your life. As others have pointed out, have a backup plan JIC you end up out of work and save as much cash as you can in the interim. Never take a loan you're at risk of defaulting on.

    SEA is comparatively cheap and you'll have a blast! I may be a little biased, it's my favourite part of the world.

    You'll make memories and experience things you'll treasure for the rest of your life! Just make sure you smash the loan when you're back to work. Avoid the fancy car and all that crap. There's plenty of research on this: experiences increase happiness, whereas material things tend to to have no long term impact, so it's a fairly obvious decision.

    In terms of a specific loan, NFI, but look for one that suits your plans best. Some offer low introductory rates which may be better suited if you're planning to pay it off early. Also, zero rate credit cards may be another avenue. Comes down to your personal circumstances.

    Ignore the negative comments. Different risk tolerances, and yeah, housing affordability is brutal. To beat that, you need to be a wizard or make a mind bending investment that nets you a few hundred K. Just go for it!

  • The Wololo Wombat on 01/07/2017 - 11:18
    +7

    Mate.

    Travelling on credit is NEVER a good idea.

    But here's how to do it WITHOUT interest. Literally 0%; you might be able to pick up ff reward points too ;)

    1: Get a credit card with a long interest free period (one that's also free) eg: https://www.finder.com.au/bank-of-south-australia-vertigo-ma…

    2: Buy everything in the interest free window (you can also call them up saying that you are about to close the card and they will often extend the interest free period if you say you will stay)

    3: Balance transfer to a card that has a 0% long interest free period (and free) eg: https://www.finder.com.au/anz-platinum-credit-card

    Viola! Free money… if you pay it back in time…

    Just make sure you can get approved for the balance transfer… but I guess your personal loan could be a back up….

    P.S. Have done this myself many times, for investment purposes lol.

    • prettyfrugalbro on 01/07/2017 - 13:36

      Thank you very much, this is really useful if I do end up doing it.

      Appreciate you giving actual tangible advice to!

      • The Wololo Wombat on 01/07/2017 - 22:31

        Thanks bro, if you do it between two banks who are not in the same network (eg, Westpac Network), the balance transfer is just a regular BPay and both cards are kept open). I've discovered you can actually request a balance transfer HIGHER than the outstanding balance.

        Eg, you owe $5000 on card one, request a balance transfer $7000. This gives you a positive debit of $2000k on the first card (a negative credit balance), which you can spend WHILE you travel (for costs incurred overseas), without any interest of course!

        Therefore, I recommend getting making the first card one (that you will eventually use for costs incurred overseas) one that charges no international ATM fees/international transaction fees - remember you using the balance transfer money, not you own!

        Two cards I found from a quick search were (with a $0 annual fee)
        https://www.finder.com.au/bankwest-zero-platinum-mastercard-…
        https://www.finder.com.au/bankwest-zero-platinum-mastercard-…

        P.S, let me know if you actually do this/pull it off! Should not cost you an extra cent if you do it right ;)

        • prettyfrugalbro on 02/07/2017 - 12:36

          that's really interesting about the positive debit, these are the kinds of things I had no idea about!

          I really like your first suggestion of a no interest on purchases card then onto a long term 0% BT card.

          Just a question, does the bank have any problem with you cancelling the card after using the interest free on purchase period? Or do they usually require you to keep the card for a certain amount of time?

          Thanks again.

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