Life after graduation

— 8 min read

You can see some light at the end of the tunnel!

The final year of your medical degree- which may involve an elective, some research and a pre-internship rotation, is finally here.

Now is the time to think about applying for your intern hospital position.

Job offers will soon be released in July, and it may be tempting to think you can cruise through to graduation.

But, before you pick out your shirt and tie combination or a new dress for that special day, there are a few things you should take the time to get sorted before university is done forever.

We are talking about your finances, and for those looking at getting their first ever job, here are some handy tips:

Your salary and tax

As an intern (in Victoria) your base annual salary is likely to be around $76,000 plus super (currently 9.5% of your income paid by your employer), as well as any overtime you do.

Your employer will withhold tax and HELP payments (if applicable), once you’ve declared your Tax File Number (TFN).

Click here for a list of the deductible expenses you should keep track of to be in the best possible position at tax time.

Cashflow and Budgeting

After tax and packaging, the average intern (with a HELP debt) has a net annual income of between $55,000 and $65,000.

What are you going to do with it?

After rent/mortgage and bills, you should have surplus cash to direct towards savings.

Whether it’s upgrading the car, holidays, a share portfolio or your first home deposit, first and foremost you need to save it.

Identify a fixed portion each pay, either a percentage or dollar amount, and setup an automatic transfer to your savings account.

You should then get used to living off the remainder. Need help tracking your spending? There’s plenty of software or app options available to help you with this.

Superannuation

Superannuation is something you would have heard of and perhaps already have if you’ve been employed in the past.

Super, despite the constantly changing rules, will always be the best vehicle to save a nest egg for your retirement.

This is largely because of the broad, concessional, 15% tax rate and the fact that, given it’s compulsory for employers to pay, there are literally millions of Australians using Super funds which spreads costs and keeps them low.

You’ll likely have to choose between First State and HESTA superannuation funds if you are working in Victoria.

You do have Super choice meaning you can elect a previously held Super fund account or your own self-managed fund.

If you’re unsure which one to choose, seek financial advice.

To learn more about superannuation and the considerations you should be aware of, click here

Salary Packaging

You should set up your salary package as soon as possible, normally once you have your employee number.

The rules and administrators are different from hospital to hospital so it is important to get advice around this too.

Check out our salary packaging article to get more details.

Insurances

Most people think about insuring their car before driving on the road, but few consider protecting their income as soon as they start earning.

Funnily enough, it’s your income that enables you to buy a car, your first home, pay your rent, bills and even buy groceries.

This makes your income your biggest asset, without it you could be in significant financial trouble which could limit your ability to achieve all of the goals you have in mind today.

If you are injured or sick and not able to work you can continue to receive your income if you have adequate income protection insurance.

There are a few factors to consider when taking up a policy, get something that suits your circumstances by speaking to an insurance consultant at DPM.

There is quite a bit to get in order before you take off on holidays and graduate.

If this all sounds too hard, organise a no obligation initial consultation with a DPM adviser today. You can also be guided through Internship by taking up our Internship Package.

Disclaimer: * The information contained in this site is general and is not intended to serve as advice. DPM Financial Services Group recommends you obtain advice concerning specific matters before making a decision.

Authors

Anthony Pane

CA, B. Comm

Consultant
Melbourne

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Anthony started at DPM as a Tax Consultant in 2015. He looks after doctors at various stages of their career with a customer-centric approach. His clients value his ability to guide them through their issues and provide them with personalised solutions for their taxation, structuring and salary packaging needs.