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How I Ditched Debt How I Made the Most of the Gig Economy

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How I Ditched Debt to make the most of a Gig Economy

By Amrita Jayakumar Writer The Washington Post Amrita Jayakumar is a former special-assignment journalist for NerdWallet. She also wrote a syndicated column on millennials and money, and focused on personal loans and consumer credit and debt. In the past, she worked as an editor at The Washington Post. Her work has been featured on the Miami Herald and USAToday. Amrita has a master’s diploma in journalistic studies from University of Missouri. University ofMissouri.

Feb 5, 2019

Editor: Kathy Hinson Lead Assigning Editor Personal financial, credit scoring, managing money and debt Kathy Hinson leads the core personal finance team at NerdWallet. In the past, she worked for 18 years with The Oregonian in Portland in roles including copy desk chief and team leader for design and editing. Previous experience included editing copy and news for several Southern California newspapers, including the Los Angeles Times. She received a bachelor’s degree in mass communications and journalism in the University of Iowa.

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The series interviews people who have triumphed over debt through a combination of commitment, budgeting and clever financial decisions. The answers have been edited for length and clarity.

Kara Perez has never had a full-time job. The 30-year-old entrepreneur living in Austin, Texas, juggled multiple part-time jobs in her 20s including catering, nannying to coaching girls’ lacrosse at high school.

Perez completed her studies in 2011, graduating with an English degree and more than $20,000 in loan debt. Three years into “adulting” and no job offer coming her way, she realized she couldn’t afford to pay off her debt for the rest of her life. “I realized: no one can save me. I have to save myself from this existence which I’m currently living.” the woman says.

Perez determined to make use of her gig-based life and shifted things into high gear by balancing five jobs and working all week. Every dollar she earned toward her credit card debt.

Now debt-free, Perez is the owner of her own business known as an event and financial education company that shows women how to manage their money. Perez has shared her highs and lows with NerdWallet and her tale could encourage you to .

What was your total debt and income when you started?

I completed my studies in 2011 and had a little over $25,000 spread across five distinct loans. When I got really super serious [about the debt I owed at the end of 2014, I had about $18,000 left and I am earning $18,423.

How did you get in debt?

I went to my first-choice school [Wesleyan University]. I’m from a family with a single income, and taking out loans was always a part of the plan.

What was the reason that led you to get out of debt?

Frankly, watching everyone around me continue to live their lives, I felt like I drowned. I was spending my time in tears and panicking. I was applying to jobs, but I wasn’t employed. I was three years out of college , and employed as a part-time caterer, and 10 hours per every week working as receptionist for the gym.

My friends were on the road, getting real jobs or promotions and I was stuck.

[When I was learning about money] , I had to put one student loan over six month, because I couldn’t afford the payments.

What steps did your take?

I made two changes I cut down everything possible within my budget, and then I began to look for work. I drove a van for an athletic team at the high school. I did freelance writing for 12 dollars an hour for small blogs as well as freelance social media management.

I also started to be extremely thrifty. I would take leftovers from my catering business and eat them instead of spending money on groceries some weeks.

(Perez had multiple roommates at the time]. My roommates were my most cherished friends, however they all came from wealthy families with no debt. Everyone was very accommodating and my friends would always stay home for dinner , instead of making me go out for dinner.

I’m still very frugal. I have a boyfriend and a roommate and don’t go out to eat too often.

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It was surely a difficult juggling act.

I had five part-time jobs. I often worked seven days a week. I was absolutely exhausted at the end of the day, but I was also very proud.

Let me know about the debt avalanche technique to pay your loans.

There was one Federal loan with a rate of 6.8 percent; that was my highest interest rate. This is the loan that has the highest interest.It is the debt with the highest interest. I put any extra money toward that debt, and then made the minimum payments on everything else.

Did your income change through the over the years?

Catering and social media work I did was hourly, so I asked for more hours. I also worked to negotiate raises for my catering and nonprofit jobs, which was helpful. I went from earning $12 an hour as a caterer , to $15.50 in the course of a year. In 2015 [the year in which she paid off her debtI made $32,249.63.

What would you have changed?

Looking back, the biggest thing I would have done was to invest into my retirement accounts in conjunction with the repayment of my debt. I didn’t start investing until later, which was time my money could have grown in the bull market.

What are your current goals?

I am a part-time employee at my business full-time. I’m also a super-saver; I want to build up enough in assets to have work become an option. In the past year, I have saved 72% of my total income, using a and an .

How do you get rid of your personal debt

Build a budget so that you can put money toward debt, but also save for emergencies and tuck in some money to have fun. To accomplish this we recommend the in which your spending is split between wants, needs and savings, as well as the repayment of debt.

The debt avalanche technique that Perez employed is an effective way to pay off debt as you lower interest rates, however, for those who want to win quickly, you can also try the and pay off your smallest debt amount first.

As Perez notes, is something that could be accomplished and should be part of debt payoff.

Photo taken by Shane Henderson.

About the author: Amrita Jayakumar is a former writer for NerdWallet. She was previously employed by The Washington Post and the Miami Herald.

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