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

  • konazz on 01/07/2017 - 11:23
    +2

    As a recent partner of a small firm - do it. My last proper holiday, where I didn't have to take phone calls and emails was September 2014.

    Once you have a client base, or CA studies or whatever comes up in our industry - you'll never completely relax. You'll never property get away from work again! That's the nature of the business. My mate works at PwC (senior tax manager) and while on his extended honeymoon got recalled back to work to London to fix shit back in Australia.

    • prettyfrugalbro on 01/07/2017 - 13:38
      +1

      See this is exactly what mindset I'm in! I'm happy to break my back for the company but I know that will take its toll on holidays, free time etc.

      Hope you get a chance for a proper, electronic free holiday soon mate, sounds like you deserve one!

      • SimpleLeverage on 02/07/2017 - 23:44

        There's plenty of smart advice on how to use debt wisely such as 0% interest credit cards. Of course, save as much as you can (and pick up as many extra shifts for some extra cash as you can). And don't go crazy with spending on your trip - I'm sure you'd find plenty of deals on this site to help with that too.

        You'll soon realise how precious those 4 weeks of annual leave will become when you're time poor. Purchasing additional leave in itself is a tangible cost. As well, the opportunity cost of taking leave means you're not learning new things on the job and building your career. At a certain point, taking leave could also be tricky. I'd definitely would not want to get recalled on my honeymoon!

        All the best! I'm sure you'd figure what's right for you.

  • keithality on 01/07/2017 - 11:28

    I would work the first two years, and then take the holiday you are looking to do with the annual leave saved up in that time, and without needing to go into debt to do so. Alternatively, After 3 years you have the option to take an unpaid career break for up to a year. Alt-alternatively, there is a high probability you will change jobs before 3 years are even up in which case you can then take the holiday in the period before you start your next job.

    Source: Personal experience

  • Aceboy884 on 01/07/2017 - 12:02
    +1

    The Australian culture encourages people to spend money they don't have…

    Nice way to start your working life in debt

  • darkchoc on 01/07/2017 - 12:14
    +1

    Book the cheapest flight into a city in SEA and out of another city in SEA.

    Travel with a friend or friends with similar outlook on life and budget. This is the best time to create shared memories and stories. Just remember to factor in that everyone has an angry day on an extended trip!

    Use internet and lonely planet guides to search out backpacker accommodation. You get to meet a lot of free spirited people from all over the world.

    Pre plan your next destination travel arrangements when you reach your current destination.

    Enjoy the trip by living on a shoestring budget. The food, accommodation and experiences are cheap one you get there!

    Have a credit card/debt for emergencies or if you decide to spend a bit more than you have!

  • JMERC on 01/07/2017 - 14:22
    +2

    I did a similar thing with paying for half the trip with a credit card and honestly it was one of the best/exciting trips of my life.

    This sounds like bad advice, and goes against everything I believe in (I live debt-free atm), HOWEVER, if:

    • You're living at home w/ parental support AND
    • The trip is to SEA/low cost <$5K

    then it's definitely worth it and you could pay it back after a few months with ease. I saw it as a reward to myself for graduating and was my first holiday without family and it was such an exciting/adventurous trip that sparked my love for travelling.

    Everyone's circumstance is different, but it was perfect for me at the time and I have no regrets.

  • lakes_8 on 01/07/2017 - 15:53

    management consultants don't usually do CA? if you do though, remember you will be taking leave to prepare for the exam also.

    • spiff on 02/07/2017 - 02:24

      big 4 gives u study leave

  • drfuzzy on 01/07/2017 - 16:19
    +4

    Stop calling it liquidity. It's money.

    The difference between the two is your mindset.

  • Raheen on 01/07/2017 - 16:36

    Get a working holiday visa for Japan and go do the Ski season, you will get paid and free accomodation/food, maybe 1/2 days off a week then use the cash to travel a bit, ski season is over our Xmas/new year

  • random12 on 01/07/2017 - 18:18
    +1

    Going into debt for a Holiday because you think you will be too busy to do so later is STUPID.

    If it's that hard to get holiday time approved, just leave your job and then look for another job when you return.

    I know people that work 6 month contracts. They make tons of money on contract (way more than the standard full timers, multiples more) and then they take like 4 week holidays and then they look for another job.

    • danyool on 02/07/2017 - 12:15
      +2

      I bet they didn't go straight into contact work after uni though, but after they had been in full time work going experience, but not getting much holiday - exactly what the OP can foresee.

  • Elnato on 01/07/2017 - 20:02

    I'd rather be poor/make an average wage then do accounting as a profession, unrewarding, monotonous and boring as hell, its not to late to actually choose a path in life you might enjoy, instead of just accepting your current situation

    • prettyfrugalbro on 02/07/2017 - 12:38
      +2

      Totally on topic mate, thanks for typing that one out

      • cheng2008 on 02/07/2017 - 17:34

        +1 to just go for it, my mate did over a month in Thailand/Myanmar/Cambodia for $3000 including airfares, I was spewing when I realised it was that cheap. Granted you might have to slum it a bit and skip the full moon parties, but for $5000 I reckon you could live like a king.

      • Elnato on 05/07/2017 - 16:59

        Fair enough it is off topic, but who enjoys accounting? Your situation is simple don't spend money you don't have saved, and go on a holiday you can afford, the point I was making was don't settle for a job that you have to be "married to" like you answered in a previous post.

  • [Deactivated] on 03/07/2017 - 08:23

    the typical path is get your CA qualification, then go on holiday with proper cash from savings during the first 3 years or so. or even better, get a secondment from KPMG to Europe or USA or somewhere you fancy.

    like any other professional profession, accounting can be rewarding IF you got the passion and drive and commitment to sacrifice and work hard, to become a partner by around 30 to 40 y.o.

    law graduates also take similar efforts and time to become a barrister or partner.

    medical graduates also take similar time and lots lots lots of sacrifices to become a specialist in a highly competitive field.

  • desmondnnk on 03/07/2017 - 09:56

    Big 4 banks or Big 4 accounting firm? My understanding is that grad roles generally don't pay well in the later (for number of reasons), and my point is that you won't have much left after each pay cheque to repay your personal loan.

    so my view is - needs over wants.

  • OzzyOzbourne on 03/07/2017 - 11:45

    Borrow as much money as possible now and enjoy yourself, you never know how long you've got left.

  • hypebeast on 03/07/2017 - 12:19
    +2

    Hey buddy,

    The cheapest way to get a "personal loan" is to create your own.

    1. Apply for a 0% balance transfer card (Westpac and HSBC offer ones with no annual fees)
    2. Balance transfer as much as you can out into your CommBank card.
    3. Pay off the balance in 12 months when the rate changes from 0% to the annual purchase rate (looking at about 20%)
      I've done this myself to invest into stocks and it works a charm.

    Good luck working for the Big 4, had an internship with one of them and I can say I never want to head back ahah

    • BobLim on 03/07/2017 - 15:07

      Makes sense and I've thought about doing this, but how do you buy stocks/managed funds etc with a credit card?

      • John Kimble on 03/07/2017 - 15:20

        My understanding is you don't directly; I think this process just frees up your cash.

        • BobLim on 04/07/2017 - 16:03

          Ah ok I don't spend anywhere near the amounts I would be investing unfortunately - good problem to have though.

          Eneloops can be had with a card…

    • prettyfrugalbro on 03/07/2017 - 17:25

      Wait sorry is this similar to what someone else suggested;

      1. Get a 0%p.a on purchases for say 3 months on the ANZ card
      2. Use that as a 'loan'
      3. Balance transfer to another card with 12 months no interest on balance transfers?

      Is that the same as what you are saying?

      Thanks very much for the help!

  • hypebeast on 07/07/2017 - 11:56
    +1

    Sorry buddy, I'm logged onto OzBargain on most of my devices.

    There's a few issues with what the method you've suggested.

    If you're planning on using the 'ANZ card' as a means to pay for items overseas, you'll be subject to their horrible exchange rates, as well as foreign currency conversion fees (2% for Westpac and CommBank, not sure about ANZ but I'm sure it's the same thing). This means you'll effectively be paying roughly 5% more than you need to on any purchase overseas.

    What I would suggest (and what I've done) is to apply for a card with the highest limit possible that has a promotional balance transfer of 0% for 12+ months AND no annual fee (Bank of Melbourne hint hint), then balance transfer the maximum amount you can into your CommBank card. This means you'll have +20k (or whatever your amount is) in your CommBank credit card (at 0% effectively). As soon as it hits your CommBank account, transfer it into a Complete Access account, then either:
    1. Withdraw it into cash and exchange it when you go overseas (the exchange rates overseas were significantly better than any exchange in Australia I found).
    2. Deposit it into an account that doesn't charge foreign exchange conversion fees (Citibank Transactional Account hint hint), then use the ATMs overseas.

    I'd recommend doing a mixture of both, so maybe putting 75% into the Citibank account, and the rest in cash to exchange overseas. Just exchange enough in Australia to cover basic expenses like taxis, food, maybe a hotel room for a night or something.

    • prettyfrugalbro on 07/07/2017 - 13:54

      Ah now I get you! Sorry its a new concept for me.

      That's really handy for what I'm after! I didn't know it was possible to actually do that.

      Does CommBank have any issue with me crediting the credit card that much?

      Also that full credit amount can be treated as cash with no cash advance rates?

      Thanks so much for the help, this method would be really helpful, learning new things!

      • hypebeast on 07/07/2017 - 14:41
        +1

        Usually it only works with new cards. Just be aware that you can most likely only do it once per bank, but there are heaps of people out there that just balance transfer everywhere and save heaps on interest payments.

        CommBank has no issue with it as far as I'm aware, the full credit amount will need to be transferred out, and you'll incur a $2.50 cash advance fee (which is ridiculous, but pretty insignificant). Just make sure to balance transfer FIRST, then withdraw, so you won't charged at the 21.99% p.a. rate. Realistically if you're spending $10,000 on your trip, you've just saved yourself more than $2,000 in interest had you gone with a cash advance, or $1,000 from a personal loan.

        Never go to a bank for a personal loan unless you have no other choice.

        Edit: Just realised I could reply to comments, apologies.

        • prettyfrugalbro on 07/07/2017 - 14:44

          This is probably the best advice in this thread. Thanks heaps mate, even If I decide to do only $3-4000 worth this is saving me a lot of interest.

          Thanks again.

        • hypebeast on 07/07/2017 - 15:15
          +1

          Just shoot me a message if you have any other questions regarding set-up or anything. Currently working in a retail bank so I've got a pretty good grasp of what's out there at the moment ;)

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