New med student looking for some advice

[Sundancekid7]

So I recently earned 11.5k selling an old VW van and am wondering what I should do with it. I will pay around 40k in tuition this year and 20k my last 3 years since my fiancee just got a job at the university and I'll get half off tuition. I'll only be taking out loans for tuition and right now the interest is at 6%. I don't have any other debt and I don't have anything saved for retirement. Right now my plan is to keep 4k as an emergency fund, put 5.5k into a roth IRA and get started saving for retirement, and use 2k to pay for a honeymoon this next year.

Does it make sense to start a retirement account now? Is it better to just use that money towards eating away at tuition?

[Craigy]

I would blow it all on the honeymoon.

What line of work is the fiancee in?  

[Peds]

i would save the cash. youll burn through it fast.

my wife and i went on our honeymoon 2 or 3 years later (we were residents). paid cash, never took on debt for that.

[Craigy]

Peds wrote:

i would save the cash. youll burn through it fast.

my wife and i went on our honeymoon 2 or 3 years later (we were residents). paid cash, never took on debt for that.

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That's not a honeymoon, that's a vacation.  

But a much better move financially.

[Peds]

Craigy wrote:

Peds wrote:

i would save the cash. youll burn through it fast.

my wife and i went on our honeymoon 2 or 3 years later (we were residents). paid cash, never took on debt for that.

Click to expand…

That’s not a honeymoon, that’s a vacation.  

But a much better move financially.

Click to expand...

it was totally a 2-for-1!

[jpa]

4th year student here---I recommend not putting it in a roth ira; med school is expensive and you'll need the cash.  Whether it's buying UWorld ($400 minimum)x for both steps, paying for Step 1/Step 2 Ck/CS, or doing some "away" rotations, you're gonna need a slush fund.  I'm a dave ramsey follower in regards to debt, so i appreciate your sentiments, but I promise you that the peace of mind from having that available is gonna be worth it during the next 4 years.

[jpa]

And I also agree with Craigy, make sure to use some of it for your honeymoon! having some (reasonably cheap) fun during med school makes the grind bearable!

[Sundancekid7]

Definitely learning that medical school is expensive so that makes sense. For example they give us a "free" Ipad and act like it's a huge blessing for us, then sort of quickly say by the way you need to buy insurance for it and get a case and bluetooth keyboard (which cost another 150-200 dollars). Don't even get me started on the textbooks.

[Kamban]

When does the interest on the Principal kick in? When do you have to start paying back the loan? Can that loan be refinanced to a lower rate at the start of the payments?

All these will decide if you want to put into a Roth IRA or cash or honeymoon or bit of all of it.

[jsr52]

Id ditch the idea of having an emergency fund in med school, you don't have any job other than studying and your loans are basically guaranteed to cover your expensives. If you know you have some big expensives like board studying coming up sure save a few thousand but that's just savings not an emergency fund.

I wouldn't throw too much money at your loans now, med school is such a depressing time, you need to atleast have some fun, I do like the idea of starting a Roth IRA, your ahead of the game if you do that.

[AnotherSecondOpinion]

I'd consider saving it in some kind of high interest savings account so it's there when you need it, but not too accessible that you are tempted to spend it

Tying it up in a retirement fund is definitely not the right move since you have some major expenses coming up: applying for residency, traveling for interviews, moving for internship and potentially moving again for residency (not to mention fellowship interviews/moving if you go that route too).

[StarTrekDoc]

MedSchool -- survive it and enjoy the time off.  IMHO, blow a little on the honeymoon (albeit - on a budget!).  It'll be memorable in the long run and well worth it.

Also the same for the time between courses and breaks.  If can go with a cadre of students, even more memorable.  We did backpack trips to Europe between 2nd/3rd year.  Took 2nd year to plan it and did planning sessions/bbq after each section -- lots of good times and memories.

Balance between studies .  I would NOT use for retirement funds which are way too constraining.

[Sundancekid7]

Awesome. Thank you all for your advice I really appreciate the insights.

[East coast]

Sundancekid7 wrote:

So I recently earned 11.5k selling an old VW van and am wondering what I should do with it. I will pay around 40k in tuition this year and 20k my last 3 years since my fiancee just got a job at the university and I’ll get half off tuition. I’ll only be taking out loans for tuition and right now the interest is at 6%. I don’t have any other debt and I don’t have anything saved for retirement. Right now my plan is to keep 4k as an emergency fund, put 5.5k into a roth IRA and get started saving for retirement, and use 2k to pay for a honeymoon this next year.

Does it make sense to start a retirement account now? Is it better to just use that money towards eating away at tuition?

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Didnt see it mentioned anywhere so want to clarify - based one what you've written, I don't believe you are eligible to make Ira contributions this year. Did you earn money/pay income taxes this year? I suspect you meant that you 'sold' the VW, not 'earned' (from a tax sense). Seems that you won't be married this year so that's not an option spousal-wise either.

[mamaham]

AnotherSecondOpinion wrote:

I’d consider saving it in some kind of high interest savings account so it’s there when you need it, but not too accessible that you are tempted to spend it Tying it up in a retirement fund is definitely not the right move since you have some major expenses coming up: applying for residency, traveling for interviews, moving for internship and potentially moving again for residency (not to mention fellowship interviews/moving if you go that route too).

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agree - save a large portion if not all... we saw way too many of the other residents with no money for all that extra stuff - moving, traveling for interviews, gap month until you start attending.  they were going into debt for all these extras that could have been planned for ahead of time...

PS - jealous on old VW van... i have always wanted one but husband says no way - not safe.... sometimes (his) knowing all the dangers of life gets in the way of some fun...