avoiding financial stress during your fellowship years

If you’ve been accepted for a Fellowship – congratulations! It’s an exciting opportunity to advance your career, but the last thing you want is financial stress while you’re away. Having a solid financial plan in place before you leave is essential. Fellowships often mean big lifestyle and income changes, especially if you’re moving overseas. Getting your finances organised ahead of time can save you a lot of stress and hassle down the track.

Here’s what you need to consider:

• Your income will reduce and your expenses will likely increase
• Securing lending can be more difficult once you’ve started your Fellowship
• A financial buffer can help manage unexpected costs
• Speaking with a financial adviser early can provide the best options.

plan ahead with your financial advisor

Before embarking on your Fellowship, sit down with your financial adviser to review your financial position. Whether your Fellowship is in Australia or overseas, your income and expenses are likely to change significantly. Your adviser can help you:

• Assess whether you have the financial tools to sustain yourself
• Plan for expected and unexpected costs
• Connect with a banker to explore additional financial support.

why early planning is essential

The financial impact of a Fellowship can be significant and once you’ve started, the change to your financial circumstances make it harder to secure lending. Banks assess overseas income differently – often reducing its value when determining loan eligibility. Without pre-planning, you may find yourself unable to access necessary funds when you need them most.

By addressing these concerns in advance, you can ensure financial stability and peace of mind. Your adviser will help you:

• Calculate expected cash flow
• Account for existing financial commitments
• Determine whether you need a safety net to draw on.

setting up a financial safety net

One of the best ways to protect yourself is to set up a loan facility before you leave. This can act like a financial “buffer” to draw on if needed, without causing unnecessary stress.

some key features of this facility include:

• It’s often structured like a home loan but with no initial debt – you just have access to a set limit
• You only draw on it, if necessary, much like a line of credit
• Interest can be capitalised, meaning you don’t have to make repayments while you’re away if you don’t want to
• The interest rates are typically discounted, similar to standard home loan rates
• You can choose to have the loan on an interest-only basis during the Fellowship, which helps reduce monthly repayments.

Setting this up in advance means it’s based on your current income and financial standing, which is usually more favourable than what it will be while on Fellowship.

additional strategies to manage cash flow

If you have existing loans, consider adjusting their terms to improve cash flow. Options include:

• Switching from principal-and-interest to interest-only repayments
• Refinancing to extend the loan term, reducing monthly repayments
• Setting up a loan facility with a flexible repayment structure.

final thoughts

To avoid unnecessary financial stress, start planning well before your Fellowship begins. Speak with your financial adviser to:

• Explore your options and assess potential shortfalls Implement solutions tailored to your situation
• Ensure all financial safety nets are in place before departure.

With a solid financial plan in place, you can fully embrace the experience without worrying about money. A little preparation now can make a significant difference later. Get it sorted before you go!

For further information or to book a complimentary meeting, please phone 03 9863 3111, visit bongiorno.com.au or email enquiry@bongiorno.com.au

Mark Bremner |senior finance consultant
Jack Will DipFP, Cert IV Finance & Mortgage broking|finance manager

As this general advice has been prepared without taking account of your objectives, financial situation or needs, you should consider the appropriateness of this advice before acting on it. If this general advice relates to acquiring a financial product, you should obtain a Product Disclosure Statement before deciding to acquire the product.