Grad student money advice

[PhDiddy]

Hi,

So I am currently in a PhD program living off of a teaching assistantship.  I'm relatively frugal and I have an auto-withdrawal of about $350 to Smarty Pig the day after pay day each month.  I also have about $13,000 in savings, but student loan debt from my undergrad and master's totaling about $57,000 that is on deferment with the juice running (I know).  The interest rate for about $24,000 of the loans is at 4.5% or so and the other $33,000 is at 6.8%.  I am currently not paying the interest while in school.

I'm wondering what I should do with my money.  I know keeping it in a "high yield" savings account at 1% is silly, but I don't know what I should do.  I don't have a Roth IRA, even though at 30 I really should have opened one up years ago.  I also have about $4,500 in a 403b from working at a non-profit after undergrad.  Does anyone have any advice for how to make the best of my situation?  I have at least 4 more years to go for my PhD program and the interest is accumulating on my loans...maybe I should take the $350 I save each month and use that to pay interest on my student loans instead?  Right now though, I think I need a cushion in case I don't get funding for the summer in the future.  Also, my parents are into real estate investment and they would let me partner with them on one of their future investment deals if I have cash on hand, so that's a possibility, too.  Thanks for any advice you can give me.

[GBR]

Pay off the 6.8% loan ASAP. You can't expect equity market returns to be much greater than 6.8% /year.   As for the 4.5% loans, I would still pay that off asap. You might want to consider putting some money in your RIRA though. The RIRA is a precious commodity and each year you skip putting into it can be a big blow on your tax advantages during retirement.

Sincerely,
Someone who is about to finish his PhD in Chemical Engineering

[MDM]

GBR's suggestions look good.

If you are stuck with the problem described in http://www.evolvingpf.com/2012/03/earned-income/ (i.e., no "earned income" so no Roth allowed), then paying off the student loan is likely your best bet.

[CarDude]

Not to be a Debbie Downer, but make sure your prospective income after graduation will be enough to break even with (and surpass) what you'd have been able to earn with the degrees you have now, say, within 10 years. In other words, since it sounds like you're in year 1 or 2, do run the numbers to be sure you're not going to spend the next four years toiling for a job that will only pay 2k more than what you could have been earning all along with your master's degree.