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Q
I am 22 and at university studying
dentistry, and will graduate in three years.
I am confident about getting a secure job
with a good income (the average for Aussie
graduate dentists is around $90,000 a year,
I was told) when I graduate.
I am living off my income of $400 a fortnight,
plus Centrelink youth allowance payments of
$300 a fortnight. I cannot earn more than this as
I do 42 hours a week of face-to-face lessons plus
studying on top.
I have just been told I will receive a
$250,000-$300,000 inheritance in the next couple
of months and I don’t know what to do with it!
As I am young I have no responsibilities as such
and want to use that money to make more for my
future. But I don’t want to put all of it at risk and
don’t know how much I should risk.
I will need some to live off as I will be cut off
from Centrelink payments but am just not sure
of the best options for me.Goodness, Helen, that is a lot of money to land on you
at 22, but it is a nice problem!
A couple of months is not far away, so the first thing
I want you to do is to put a sensible amount of the inher-
itance into your day-to-day account to meet your livingcosts without income and youth allowance for, say, six
months. An interesting debate you should have with
yourself is whether to allow exactly what you have now,
or give yourself a little pay rise. You are obviously intelli-
gent to be studying dentistry but, smart or not, we are all
human. It is just really easy to spend more without even
noticing it. So while you might want to give yourself a bit
of a cash reserve for a holiday or similar, my advice is to
keep up your financial discipline. Put aside as much of
the money as you can.
I’d put the balance after your six months’ living allow-
ance straight into a six-month term deposit with your
bank. Sure, you will only get 2.7% or so but it is safe.
Even 2.7% on, say, $250,000 is close to $4000 over
six months. After six months you may even roll over for
another six months to allow you to think more about
the money over your Christmas university break.
In the longer term, I see this money as a deposit on an
investment property or your future home, so I feel it is
wise to keep it secure. Your career will be far more valua-
ble than this money, so that should be your main focus
for the next few years. Also, I do agree with the many
experts, backed by market evidence, who feel that this
property boom cycle in many of our cities is slowing, so
a panic to buy is neither healthy for you nor necessary.
Right now I think planning your spending and protect-
ing this money is the way to go.Helen’s top priority is to ...Protect the $250K inheritance
Q
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