Hi Personal Finance Reddit,
I have been lurking for a while now. I thought I’d post and see if I can get some general feedback, sense of direction etc. I am a 22 year old female from New Zealand, first year Master’s student, with a Bachelor of Science majoring in botany and genetics. I have an idea of job opportunities in my field, check the listings every day to see what skills etc. are being sought after and so forth. Agricultural/horticultural/forestry science and conservation are big things here, so I should be employable - although we do have a small job market so there will probably be some delay between graduating with Master’s and finding a full-time job in my field.
I am looking to maximise my situation so I am in the best position for my future, going forward into full-time work in a year or two, and able to purchase a house as soon as it makes sense.
Some specifics: Student loan (loaned by the government): currently $65,200 (0% interest indefinitely). It will be about $95,000 by the time I finish.
Student loans here are a bit weird, so I will detail: The loan is interest free (0%) as long as I remain in New Zealand; if I set foot overseas for 6 months it accrues interest. Once I begin earning above $19,084 per year, 12.5% of my gross wages over that amount will automatically be deducted at each pay check to pay it back. Voluntary extra payments are fine too – although, at 0% interest, I guess paying it off faster is even less of a gain than having money sit at 1.5% interest in my savings account? Unless the government threatens to put interest back on, and then I will be wanting to pay it off quickly, lol. So far, none of the political parties seem interested in doing that. They’re too busy fighting each other over the current housing crisis in our biggest city.
A lot of the loan is $176.81 per week contribution to living costs (about $775 per month – not taxed in any way).
Income-wise: I earn $1250 per month AFTER tax from working part-time (averaged over the year as I don’t work all-year round). I work between 20 and 25 hours per week during the academic year; I top this up with my student loan payments from the government, (the $775 per month). All of my jobs have a lull over November-February, so I will be surviving on savings and student loan payments over this time while continuing my Master's project.
Expenses: On average, $1595 per month. $585 per month on rent (50:50 split with my partner) $100 per month power (50:50 split) $45 per month internet (50:50 split, unlimited) $50 per month on petrol and parking for the car $8 per month on my cell phone (cheapest plan possible, I don’t use my phone much!) $15 per month Netflix $10 per month on a budgeting and account tracking app; it records all my purchases for me and assigns them to categories to track spending $782 per month remaining covers my share of groceries (food, household items, toiletries and cleaning products), entertainment, eating out and lunches, and budgets for buying gifts, clothing, haircuts, dental visits, and my medication. I have this all split into categories for tracking but many are so small it doesn’t seem worth doing a breakdown. I spend the most on food/groceries.
Car is being borrowed from family, so no payments other than fuel. No other debts. I do not have a CC. No TV.
That means I have about $430 per month to save, bearing in mind some of that is interest free loan. I currently have an emergency fund/general savings of $12,000. I just won a scholarship of $9,000 – so this will be $21,000 in a month’s time. I am competitive for scholarships, top 5% of my cohort at the university I am at (which sounds impressive, but we only have several hundred people in my degree, so…)
I guess, my questions are: 1. With $21,000 in savings, should I be starting to think about investing something like an EFT , rather than leaving it in a 1% saving account? 2. How do I consider my student loan in all of this, since it is 0% interest, possibly forever, but will also represent a 12.5% reduction of my income earned above $19,000? 3. What sized emergency fund do I even need? 3 months is only about $5,000, which seems puny! 4. Buying a house: I really, really want to be in a position to buy a house (with partner) ASAP once jobs and stuff are settled. Housing is really expensive here. To buy a house, it is pretty much mandatory 20% deposit, and starter houses in my area (low COL) are $220,000. Starter houses in most regions are $280,000-$300,000. Starter houses in Auckland are $600,000+. Most of our population lives in Auckland, a lot of jobs are there; therefore, there a lot of unhappy people currently. I will be avoiding Auckland like the plague. However, house prices in most places are increasing by about $10,000-$30,000 or more per year recently. Renting here is brutal – I basically have to move at the end of every year as leases of more than 1 year are rare. Stability doesn’t exist. There is a shortage of rentals – it is not unknown for people to actual offer above the asking price for a rental to get in. People turn up to the viewings with completed application forms to apply for houses they have never seen (and our houses are crappy, people are renting places which literally have holes in the walls to find a place which is affordable!). Some places have more than 20 people viewing at one time. My partner and I looked for 3 months before a place accepted us; not keen to have to keep going through that every year! 5. Should I be doing something about retirement? I currently have 4% of my income deducted from 2 of my part-time jobs with 3% employer match; but it’s only like $20 per week; I currently have $600 in my government retirement fund after 8 months lol. Do I not worry about that until I have a proper job? 6. Any other advice?
Submitted May 08, 2017 at 05:48AM by orchidlover11 http://ift.tt/2pqAbdT
