Case study (AUS): Am I on the right track for 2014?

[mintyle]

Hi there guys,

After spending a lengthy amount of time reading MMM's posts. I've decided to put myself out there and ask for advice. Its a long post, and I try to be as detailed as I could to give you a good picture of my situation.

I'm a single 25yo female from Australia. I have completed a undergraduate degree which can potentially earn me a comfortable income of 80-100k per year if I didn't decide to go back studying. In my early years I worked much less than I did and worked for the government in a community centre one day a week to build on my experience, while going back to study full time. I didn't earn above taxable income until 2-3 years ago. During the time of which I did save money, but I saved only to buy things. I'm slowly reaching a point of luxury though where I don't necessarily feel the need to buy anything expensive except for maybe a house and start investing. But that is currently out of the question until I am working completely full time.
I am currently studying full time at a local university and working part time averaging 20hrs per week (two jobs) during the university semesters but averaging up to 30-38 hours (2-3 jobs currently) over the semester breaks and summer holidays. I am currently living at home, but not necessarily for free.
Reason for continuing study: postgrad dentistry

My monthly income after tax currently ranges from 3000-4500 per month. 1 AUD = 0.88 USD
$3500 Estimated income after tax per month (taken from the last financial year) of $42 500 after tax annual income.

Assets
$7000 Cash savings in an 3.91% interest savings account

Other/Random assets?
I have a car which I bought new for $41 000 which has been completely paid off. I plan to drive it to the ground. Its currently valued at 35 000 second hand.
I have $10 000 in preserved superannuation funds. My health. I also have a bike but it is not feasible to ride to work especially when I'm working two jobs the same day.

Liabilities
$36 000 in student debts interest free government loan, but priced is indexed each year. No compulsory payments and debt will accumulate as I continue to study (which is a very long time).

Fixed Expenses (monthly)
Domestic
$950/month to my parents for the cost of living at home (includes: gas, water, electricity, home insurance, council tax, home maintenance and groceries) Does not include any contribution to family mortgage repayments. We have $215 000 left of the mortgage to pay and when my parents can no longer work, my brother and I are expected to pay for it, since the house will be ours in the future.
$63 internet and home phone service
$25 mum and my mobile phone plan

Work/Car related
$107 Car insurance (1285 annual lump sum)
$5.25 radiation license (63 annual)
$46 car registration (552 annual)
$24 practicing license (290 annual)
$30 Working indemnity insurance ($360 annual)
$55 Dry cleaning (for work clothes because of contamination)
$100 continuing professional development ($1200 annual average)

Total fixed expenses: 1038 (domestic) + 367.25 (work/car related) = $1359.25

Variable expenses (monthly)
$120 petrol
$200 food (cooking experiments, food blogging, eating out) and this is on top of the amount I already contribute towards groceries
$50 Train ticket
$200 clothes (based on last year's average) I go through phases of not buying anything for a month or two and then spend a few hundred in one month.
Total variable expenses: $570

ESTIMATED TOTAL Monthly Expenses: 1929.25

Leftover money --> monthly income - total expenses = 3500 - 1929.25 = 1570.75
My savings target this year is to reach 20 000 which is less than 50% of total income. So I would need to save another 13 000 or 1080/month. Ideally I would like to save up to 75% as well, but a significant chunk goes to my parents. The other 490.75 will go towards any unforeseeable funds/payments/leisure/savings.


My Questions.
At this stage, because I'm still a full time student should I just continue to focus on saving money into my interest savings account?
Do I actually have it all already sorted out? Am I just over analysing? My experience with family debts has had a negative impact on me on how I view my current debts or potential debt inheritance/asset and since reading personal finance blogs in the last 12 months have created a budget spreadsheet and accounted for almost every dollar that goes in and out. Sometimes to the point of obsession. Although I am fairly content with my present self, I am always looking for ways to benefit my future self and considering how helpful the MMM community has been with sharing their stories and reading about the things they've changed. I wanted to see if there was anything else I could do, or should I just relax and be patient.

Financial concerns: student debt, inheriting my parent's mortgage debt
Wants/aims: Get into dentistry and work as a dentist (at one stage I wanted to open my own practice, but now I'm not too sure), travel, be debt free, financial independence

[marty998]

I am currently studying full time at a local university and working part time averaging 20hrs per week (two jobs) during the university semesters but averaging up to 30-38 hours (2-3 jobs currently) over the semester breaks and summer holidays. I am currently living at home, but not necessarily for free.

I met a lot of people like you when I was at uni. If I could see you it would be obvious, but I reckon you are the child of immigrant (probably Asian) parents. Anglos just don't work as hard in my experience. But I could be unreasonably stereotyping :)

Work/Car related
$107 Car insurance (1285 annual lump sum)

This will get better, either naturally in a couple of years or if you just hound your insurance company and ask them to justify it.

$7000 Cash savings in an 3.91% interest savings account

Hmm, when are you going to be taking over the house from the parents? A First Home Saver Account might be a good idea if you and your brother will do it in the next 4 years.

I have $10 000 in preserved superannuation funds.

Good. Now make sure it is in 1 fund, not multiple funds. REST super was the best performing fund last year, but there are lots of good industry ones to choose from.

since reading personal finance blogs in the last 12 months have created a budget spreadsheet and accounted for almost every dollar that goes in and out. Sometimes to the point of obsession.

Don't fret, this is quite normal for many of us. We are not crazy or weird. We do this because it works.

I wanted to see if there was anything else I could do, or should I just relax and be patient.

be patient, you have time on your side, and time is the giver of compounded gains.

Get into dentistry and work as a dentist

Why not an orthodontist? I thought they were the best at transferring cash from their patients pockets to their own :)

[potm]

Hi, same age and country as you :)

You seem to be on top of everything. I would have a look at ubank for a higher interest rate. Also as mentioned a FHSA if you plan on buying a house in the future. If you will have surplus funds that won't be needed for a long time you should also consider investing in shares as well.

How much longer will your parents be working? While the house you will eventually inherit will be worth more than the mortgage debt it's likely you'll have the debt a lot sooner than the asset. If you'll be working full time be then it shouldn't be too much of a concern.

[mintyle]

@Marty998

Yes I am the first generation from immigrant parents of Vietnamese/Chinese background. Though my dad often tells me stories of what could have been in terms of increased wealth, I respect and acknowledge what they have done for me and accomplished to this day.

The house will be transferred over either when I am working full time after dent studies, or my parents can no longer. It can range from 5-10years from now. Even so, the thought of it just weighs at the back of my mind a little.

I'm currently with First State Super and all it is in one fund. It was recommended to me at the community clinic where I used to work. At time I've order info guides to read, but all the information is quite overwhelming at times.

As a general dentist I'll be able to perform orthodontic treatment, but once signed as an orthodontist you can only practice of ortho. While being a dentist allows me to do anything I desire, lets say I become interested in implants as such.

@potm

Hey there. That's awesome.

Okay, I'll look around at different banks. I have considered investing in shares, when I went to my bank last year to have a introductory meeting/chat with their financial advisor, they recommended I had a decent amount in savings first. At least 5000 laying around to consider investing, before deciding to hire a financial planner or someone to help me with developing an investment portfolio.

My parents will be working until they physically can no longer work. They're both 54/55 years of age and although my dad has many years a head of him (he's pretty fit), my mum's health is not in the best condition. Ideally I would like my mum to stop working, but I believe that work keeps her mind healthy because apart from watching Asian dramas, she doesn't really have any hobbies. Working also keeps her social because she doesn't have any friends, so loneliness/boredom is a concern.
It's quite likely that my brother and I will inherit the debt, but I'm trying to have more family meetings to plan out a family approach to tackling debts so that we'd all have some more peace of mind around the house.

[abyss]

It's quite likely that my brother and I will inherit the debt, but I'm trying to have more family meetings to plan out a family approach to tackling debts so that we'd all have some more peace of mind around the house.

I'm not an estate law expert, but the good news is debt doesn't automatically pass on as part of an inheritance.

If you wanted to keep the house then I guess you could choose to take on the mortgage, but you're not obliged to.

In any case, a mortgage of AUD$215 000 on your expected post-graduation income would be well within your means. In fact, you'd probably be able to significantly accelerate payments.