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How I Ditched Debt: Making the Most of a Gig Economy
Written by Amrita Jayakumar Writer The Washington Post Amrita Jayakumar was a former special-assignment reporter for NerdWallet. She also wrote a syndicated column about millennials and money, and wrote about personal loans as well as consumer credit and debt. Prior to that, she was a reporter at The Washington Post. Her work has appeared in The Miami Herald and USAToday. Amrita holds a master's degree in journalistic studies from the University ofMissouri.
Published Feb 5, 2019 9:11 AM PST
Edited by Kathy Hinson Lead Assigning Editor Personal financial, credit scoring, financial management and debt Kathy Hinson leads the Core Personal Finance team at NerdWallet. Previously, she spent 18 years working at The Oregonian in Portland in positions such as copy desk chief and team director of design and editing. Her previous experience included news and copy editing for various 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 speaks to individuals who have beaten debt by combining commitment, budgeting , and smart financial choices. The responses have been edited to improve length and clarity.
Kara Perez has never had a full-time job. The 30-year-old entrepreneurial entrepreneur from Austin, Texas, juggled various part-time jobs throughout her 20s such as catering to Nannying, to instructing girls' lacrosse at high school.
Perez completed her studies in 2011, graduating with an English degree, and over 25,000 dollars in loan debt. Three years into "adulting" and no job opportunity to be found, she realized she couldn't afford to carry on with the burden forever. "I realized: No one is going to save me. I have to save myself from this existence I'm living," she shares.
Perez decided to make the most of her gig economy life and kicked things into high gear by juggling five jobs and working seven days a week. She put every extra dollar she made toward credit card debt.
Now debt-free, Perez runs her own business known as which is a financial education and event company that teaches women how to manage their finances. Perez shared her successes and lows on NerdWallet, and her story may encourage you to .
What was your debt and salary when you first started?
I completed my studies in 2011 and had a just over $25,000 spread across five distinct loans. When I was really committed to repaying debt] during 2014, I had about $18,000 remaining and had earned $18,423.
How did you get in credit?
I went to my first-choice college, Wesleyan University. I come from a single-income household, and the need to take the loans was always part of my plan.
What triggered your decision to get out of the debt?
It was a bit depressing watching everyone around me continue to live their lives, and feeling like I drowned. I was in tears and panicking. I was applying to jobs but I hadn't gotten accepted. I was just three years out of school and working part-time as a caterer. I also worked 10 hours a day as an office receptionist in the gym.
My friends were on the road, getting actual jobs, or even promotions, and I was stuck.
[When I was learning about finances] I had to take out a students loan to cover six months due to the fact that I couldn't pay for the loan.
What steps did you take?
I made two changes I cut down everything remotely feasible in my financial budget. Then started looking for work. I was a driver for an athletic team at the high school. I was a freelance writer for 12 dollars an hour on blogs that were small and freelance social media management.
I also became extremely frugal. I would bring the leftovers of my catering job and eat them instead buying groceries for a few weeks.
(Perez had multiple roommates at the time]. My roommates were my most cherished friends, but they all came from very wealthy backgrounds with no debt. Everyone was very accommodating and my friends would always come home for dinner instead of making me eat out.
I'm still frugal -- I live with my boyfriend and roommate and do not eat out often.
>> MORE:
That must have been a hard juggling act.
I worked five different part-time jobs, and often worked seven days a week. I was really burnt out towards the end however, I was extremely proud of myself.
Let me know about the debt avalanche method for paying your loans.
There was one Federal loan with a rate of 6.8%; that was my highest interest rate. [ focuses on the debt with the highest rate of interest.] I made any additional payments towards that debt and I made the minimum payment on all other debts.
Do you have a change in your income through the time?
Catering and the social media tasks I worked on was hourlywork, and I asked for more hours. I also worked to negotiate raises in my catering and non-profit jobs, so that was helpful. I went from $12 an hour as a caterer to $15.50 in the course of a year. In 2015 (the year she paid off the debtI earned $32,249.63.
Do you have any suggestions for what you would have changed?
Looking back, the biggest thing I wish I had done was start investing into my retirement accounts in tandem with getting rid of the debt. I didn't start investing until later, which was time my money could be growing during the bull market.
What are your goals now?
I'm a business owner and work all the time. I'm also a super-saver; I'm trying to accumulate enough money to make work as an alternative. Last year I saved 70% of my net income by using a an .
How do you get rid of your personal debt
Create a budget you can allocate money towards debt, but also save for emergencies and tuck aside some for fun. To accomplish this, we like the , where your expenses are divided among needs, wants as well as savings and repayment of debt.
The method of debt avalanche used by Perez used is a more effective way to pay off debt because you can save on interest, but to get quick wins, you can also attempt to pay off your smallest debt amount first.
As Perez says, it is something that is able and should be done alongside the process of paying off debt.
Photo taken by Shane Henderson.
About the author: Amrita Jayakumar is a former writer at NerdWallet. She has previously worked for The Washington Post and the Miami Herald.
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