Financial Advice for Medical Student - Centrelink Loans etc

Lbuoyant on 29/05/2018 - 12:52
Last edited 29/05/2018 - 21:38 by 1 other user

Hi all,

I'm currently a medical student in my second last year of study. It's been a long road, taking multiple admission cycles for me to progress through undergraduate studies and gain acceptance into post graduate medical school. I've been studying full time for 7 years now and had one year off between degrees as I was not accepted into post grad studies. During that year I worked part time then traveled, leaving me with a small amount of savings prior to starting uni again, which are now gone.

I worked part time during undergrad, but haven't worked since starting medicine to focus on my studies and have been able to survive off of Youth Allowance/Aus-Study by being careful with my spending. At present, due to scholarships, my previous work and some very supportive parents/grandparents I do not have a HECS debt.

I am considering taking out some Centrelink student start up loans just to ease the pressure on me financially and let me buy some nice new things to enhance my quality of life. In general I don't like borrowing money and have been hesitant to take these up. what would be the long term implications of taking these loans? ie How much will it cost me to pay off the $1055 loans in a couple of years time when I take up my guaranteed Internship position in 2020?

In 2020 I will be in my late 20's and finally have an appreciable income. Any advice on how best to start planning for my financial future would be much appreciated!

Edit: I've decided to take the loan. It will give me just a little more comfort in the final stages of my study and let me enjoy the things I like even more before I get thrown into the chaos of life as a junior doctor.

Financial

Comments

  • [Deactivated] on 29/05/2018 - 12:59
    +6

    Jeez, you should be getting a HECS debt and surviving off your family loans/money.

    • field1985 on 29/05/2018 - 13:30
      -2

      Why?
      Your family (ie their money) may not be around forever and having a HECS debt will affect your ability to get credit (eg home loan).

      • [Deactivated] on 29/05/2018 - 13:39
        +4

        I would rather have a HECS debt for coursework on my record than a loan for buying some nice new things.

        • field1985 on 29/05/2018 - 14:07
          -2

          Fair enough. I would rather have a $1055 loan from buying some nice new things then a $150,000+ HECS debt for 7 years of medical training.
          I know which one would be quicker and easier to pay off. To each their own I guess..

        • [Deactivated] on 29/05/2018 - 14:24
          +1

          @field1985:
          You certainly went your own way applying 'then', meaning one after the other, and both. Your maths hasn't accounted for a lazy ~$149,000+, either. Maybe you should be a financial advisor.

        • field1985 on 29/05/2018 - 15:36

          @Frugal Rock:

          The OPs family already accounted for the other $150,000+.

        • buoyant on 29/05/2018 - 15:52
          +2

          @field1985:

          It's certainly not $150,000+.

          In total my 8 years of University will cost less than half that. That's still a LOT of money, but I feel it's worth clarifying.

    • buoyant on 29/05/2018 - 15:13
      +2

      This is something I considered and brought up with my family - however they were happier putting their contribution directly towards my fees.

  • dcep on 29/05/2018 - 13:02
    +4

    " … considering taking out loans… buy some nice new things to enhance my quality of life. "

    • No.

    " Any advice on how best to start planning for my financial future would be much appreciated! "

    • Don't buy nice new things.
  • [Deactivated] on 29/05/2018 - 13:07
    +1

    Time for some high yield investments.

    Ps. As an intern, you won't have an "appreciable" income. You'd have some pocket money.

    • buoyant on 29/05/2018 - 13:25

      In my state it's over $70,000 + Overtime for an intern. As someone who has only ever worked part time and casual, this is a lot of money!

      • [Deactivated] on 29/05/2018 - 13:31

        Wow. That's decent for an intern.

        Don't forget to minus tax, minus day to day expenditures, minus for car, minus rent, set aside some for AHPRA, some for insurance, CPD points and/or congress, and some money aside for residency.

        Aaaaand it's gone.

        • trustnoone on 29/05/2018 - 13:40
          +1

          So much this, I got my job as a grad at just over 70k and was cheering how "rich" I was going to be, once tax, Super, rent, food, travel and everything else got taken out my pay (Esp in Syd), I feel like I'm the poorest guy I know XD.

        • garetz on 29/05/2018 - 13:49
          +2

          @trustnoone: You are the poorest guy you know, thats everyone at the start of their working career.

        • dcep on 29/05/2018 - 13:49

          @trustnoone:

          70k is plenty in WA

        • dcep on 29/05/2018 - 13:51
          +1

          last i remember, saved 40k on 75k pre-tax

          no avocado toast though

        • [Deactivated] on 29/05/2018 - 13:58
          +1

          @phunkydude:
          75k is 57.5k take home. So you spend 17.5k

          Assuming you're only renting a room near a hospital, you're still looking at 10-15k after paying for utilities.

          2.5k-7.5k over a year for everything else? Not today. That's not enough for a hand crushed avocado on artisinal rustic sourdough on weekends. Don't even get me started on cold drip single origin.

        • plmko on 29/05/2018 - 14:03

          @tshow:

          Nah that's BS, you'll have plenty of money.

          You also forget that people who work in the med field are FBT exempt. It means the hospital either pays for everything or you claim most things on tax.

          That $70K is easily the equivalent of everyone else $90k worth of spending power.

        • buoyant on 29/05/2018 - 14:35

          I've been living pretty well off of Youth allowance and AusStudy (~$15k per year). When I graduate and start working that cost won't rise dramatically. My food budget is low, but I am easily able to buy enough nutritious food to fuel strength training and footy. I meal prep and never buy lunch/coffee's. Healthy food is cheap!

          I've obviously got a lot of ground to catch up on the savings front - most of my friends have significant savings while I have nothing at present. So I'll be doing what I can to save during my junior years.

        • field1985 on 29/05/2018 - 16:42
          +1

          @buoyant:
          "When I graduate and start working that cost won't rise dramatically."

          Maybe not dramatically, but they will certainly rise. In addition, your time will become more valuable.

          If you can earn $50+ an hour, doing meal prep can actually cost you money, because it would be cheaper to outsource it to people without your qualifications and work longer hours.

        • buoyant on 29/05/2018 - 21:25

          @field1985:

          I meal prep for more than just the cost savings. It's a great way to make sure I eat properly and get stronger and fitter.

        • poiuyt09876 on 09/06/2018 - 10:21

          @buoyant: Don't the start up loans just add to your HECS? Go for it I reckon. Cheapest loan you'll ever have. I have have multiple friends who are doing their internship now but who took out those for elective, end of year trip, etc. No regrets.

  • tsunamisurfer on 29/05/2018 - 13:21
    +9

    This…

    I am considering taking out some Centrelink student start up loans just to ease the pressure on me financially

    and this…

    and let me buy some nice new things to enhance my quality of life.

    should not not in the same sentence.

    • buoyant on 29/05/2018 - 17:54

      I get that. I've sacrificed loads in pursuit of this degree and will soon be in a very secure position financially.

      I'm now in my mid 20's and have been living very frugally for many years. Through a time when lots of my friends are travelling, buying houses and enjoying themselves.

      As I see it a $1,000 loan from centerlink is quite secure and if it let's me enjoy things a little more then it's a good thing.

      • tsunamisurfer on 29/05/2018 - 18:10
        +2

        Have a good think about what Centrelink is for.

        Is it :

        A) An essentialy safety net to ensure disadvantaged Australians can meet minimum living standards.

        Or

        B) https://www.ozbargain.com.au/comment/5991959/redir

        1. More protein powder
        • buoyant on 29/05/2018 - 21:22
          +1

          Youth Allowance/AusStudy is a tool, not a safety net, to enable people to attain higher education. I am using that tool to my advantage to further my education as it is intended.

          Are you suggesting that people receiving benefits should only be allowed to buy certain things? maybe given ration packs that "meet minimum living standards"?

          Protein powder is a food, I buy it cheap in bulk quantities and it lasts me ages and keeps me strong and healthy.

        • Quantumcat on 29/05/2018 - 22:07

          @buoyant: No, it's a safety net. You're not supposed to live on it solely full time - that's why you're allowed to earn a lot more before it cuts off than other payments (it is expected that you'll work while studying). It is a safety net so that when you don't have any work you still have a bit of money coming in.

        • tsunamisurfer on 30/05/2018 - 11:46

          @buoyant:

          You have me wrong.

          Where did I ever say I had a problem with Austudy or Youth allowance? This thread is about a lean IN ADDITION to what you are already receiving.

          I don’t even have an issue with this loan had you stated it was for additional study resources or something relevant, but it was for Gym equipment and protein powder ffs.

  • TheBilly on 29/05/2018 - 13:34
    +1

    At present, due to scholarships, my previous work and some very supportive parents/grandparents I do not have a HECS debt. I am considering taking out some Centrelink student start up loans just to ease the pressure on me financially and let me buy some nice new things to enhance my quality of life.

    Are you being sarcastic?

  • yida on 29/05/2018 - 13:50

    Just wondering, what are you thinking of buying from the money you are loaning?

    • buoyant on 29/05/2018 - 14:19
      -1

      1. Some new gym equipment - a Pair of lifting shoes and some wrist wraps - Been lifting for years and have always gone without as I don't NEED them, but I'd be stronger and happier with them and I'll certainly be buying them in 18 months anyway.

      2. Replacement parts for my bike (Chain/cassette, brake pads etc and some mudguards plus cleaning gear and lubricant) ridden the same bike to and from hospital everyday for 5 years - things are worn out and I've put off buying mud guards as I don't strictly NEED them - but not getting wet on the way to hospital would be nice.

      3. More protein powder

      4. Some new clothes and accessories - Haven't bought anything new in ages, some things are worn out and I would like to look nice

      5. The peace of mind knowing that I have more than a couple of hundred dollars in the bank

      • spiff on 29/05/2018 - 15:10
        +1

        1. Work on your dorsiflexion and hip mobility then you wont need lifting shoes. Wrist wraps are useful but could sap grip strength gains if relied on too much.

        2. No idea about bikes.

        3. Only if you're not getting enough protein through normal diet.

        4. You'll get to look nicer in 18 months! Nah seriously this one is completely subjective so up to you.

        5. Will having loan repayment obligations reduce your peace of mind though?

  • garetz on 29/05/2018 - 13:50
    +1

    You can do without nice things until you are making enough to afford them, believe me, its just stuff, unless you absolutely need something, its just a want.

    • dcep on 29/05/2018 - 13:58

      i want to learn videography & video editing … but i only have a celeron laptop + samsung s3.

      can't get myself to shell out the money when knowing i could leave a chunk in mortgage without spending it.

    • buoyant on 29/05/2018 - 15:09

      I completely agree with you. I've been studying for nearly 10 years and gone without a lot of things in pursuit of this career (which I in no way regret - I'm very privileged in how my career and future is going to be!)

      Being so close to the finish line my attitude is starting to change a little. For years I've sucked everything I can out of my budget, but now I'm starting to wonder whether or not I need to go without absolutely everything that isn't essential.

      As an example, I haven't bought a new belt in years. I've lost a lot of weight, punched 3 new holes into the belt and it looks visibly worn. Taking the loan would let me buy a new, reasonably priced and nice belt which I'll wear everyday.

      I'm not looking to buy smashed avo toast or a new iphone.

  • field1985 on 29/05/2018 - 14:01
    +1

    I was lucky enough to go through Uni when these were still grants (ie you did not have to repay it).

    I can't think of any good reason not to take it up, you will certainly have no problems paying it off and living in poverty has its own expenses (eg. you can't make savings by buying in bulk, can't buy things on sale/discounted because of your limited budget, etc).

    I would recommend you invest the money in something that will last and save you money/time in the long run.

    For example:
    - A time saving appliance or tool (laptop/microwave/vacuum/etc)
    - A scooter/bike (save on time/transport costs) My scooter costs me $20 per month to run, whereas the trains used to cost me $160 per month.
    - Warm clothes (save on heating costs)

    NEVER "loan" any money to fellow students. Unless you can afford to lose it and their friendship.

    Don't waste it on services or frivolous wants (eating out, holidays, alcohol, going out, etc, etc).

    The only exception would be to shout your family a meal to say thanks for their contribution to your education.

    • dcep on 29/05/2018 - 14:52

      should you get dyson or xiaomi robot or kmart vac

      • field1985 on 29/05/2018 - 15:42

        The cheapest one that will do the job, so you can invite guests over without embarrassment.

        I used one from hard-rubbish for the 4 years I was at uni.

  • hoey888 on 29/05/2018 - 14:12

    You can try contact https://www.bongiorno.com.au/ They advertise assisting medical students/practitioners. They also offer a 'free' tax return system for medical students.

    *I don't work or have any relationship with listed company.

  • Ocker on 29/05/2018 - 14:56
    -5

    What do you call someone who comes bottom of the class in med. school - a GP

    • [Deactivated] on 29/05/2018 - 16:29

      Medical reps.

      (Sadly, the more unethical ones actually get paid very well).

  • Velt on 29/05/2018 - 15:07
    +1

    Why not just ask for a centrelink advance instead of a loan?

  • Briefcase Mong on 29/05/2018 - 16:21
    +2

    Lol going into debt to "enhance my quality of life"

    • dcep on 29/05/2018 - 17:15

      same with mortgage debt

      • Quantumcat on 29/05/2018 - 17:25

        Not really, you expect a house to go up in value most of the time. You don't go into debt to pay rent.

    • buoyant on 29/05/2018 - 17:38

      Yes. Borrowing against my future self so I can enjoy things more now whilst I finish a very long journey as a student.

      • Quantumcat on 29/05/2018 - 19:53

        You get loans for things that help you earn more money, not frivolous luxuries. If you've managed to be frugal for ten years surely you can manage one more.

        If the bike is broken that's something worth spending money on (you need transport) but you could ask your parents for a loan or sell something you own that you no longer use. Or do tutoring as mskeggs mentioned - I do maths tutoring and earn $150 a week from that (one student for two hours and another for one).

  • mskeggs on 29/05/2018 - 17:49
    +1

    You want $1000?
    Tutor a school kid or two for a few hours a week and you will have the money very quickly, and it is flexible work to postpone one week if you are too busy or whatever.
    No need for loans.

  • Sofie519 on 29/05/2018 - 23:06

    Not sure why you would chose to get a loan for $1000, when you can earn this easily. tutoring is the obvious suggestion here, but I assume you dont want to or cant afford the time? I guess going to the gym is more important~

    Its not about how long it would take for you to repay $1055, but how one loan leads to the next loan, then the next .. you are obviously already in the mindset of spending future earnings, before long you need a new car, an expensive girlfriend, luxury goods, justified holidays and then $1055 becomes $105500 just like that … cos hey, you will be earning more than that soon … so spend it now!!

    In 5 years time, do you want your future self to say,
    "Thanks to the me of 2018, that remained frugal, I have so much more now, both in assets quality of life. I have a financial freedom"
    or
    "You dumb 2018 self! that loan started me on a path of spending before earning! Now, instead of being asset rich, I am still paying off debts on items I cant even remember where I've put it or why I bought it!"

    Let us know in 5 years which one you are

  • poiuyt09876 on 09/06/2018 - 13:00
    +1

    Not sure why people are looking at a centrelink "loan" the same way as a credit card. It's an indexed loan where repayments are taken from your income once you start working. It's essentially static until that point. Also, it's 1k. His/her earning power is literally 70x that amount when he/she starts working.

    Tl:Dr - take the money. Enjoy med school. Advice from an intern.

    • onevstheworld on 11/06/2018 - 21:43

      Normally I'd discourage borrowing for your reasons, but you have sacrificed a lot and deserve to reward yourself once in a while. You're also in a privileged position of having an all-but-guaranteed job once you finish. But remember to keep your wits about you and not over-do it.

      Advice from an ex-intern :)

  • icejester on 11/06/2018 - 01:09

    Forget what everyone is saying

    If you know how to spend your money well, go for the loan if the interest rate is low.
    Once you start investing you will always be in debt with interest rates of at least 4%

    $1055 loan is a tiny loan in the grand scheme of things.
    But think carefully about the things you buy - they should help improve you in some way rather than a material possession or improve you superficially

  • KelseeOZ on 13/06/2018 - 20:34

    Why not get a part time job to earn the $1055?
    Many other uni students do it.

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