How I Repaid Debt: Making the Most of a Gig Economy

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How I Repaid Debt to make the most of the Gig Economy
By Amrita Jayakumar Writer The Washington Post Amrita Jayakumar is a former special-assignment writer for NerdWallet. She also wrote a syndicated column about the financial situation of millennials, and covered personal loans and consumer credit as well as debt. Prior to that, she was an reporter for The Washington Post. Her work has appeared on The Miami Herald and USAToday. Amrita has a master's degree in journalism from The University ofMissouri.





Feb 5 2019, 2019


Written by Kathy Hinson Lead Assigning Editor Personal finance, credit scoring, managing money and debt Kathy Hinson leads the core personal finance team at NerdWallet. Previously, she spent 18 years with The Oregonian in Portland in positions such as copy desk chief and team director of design and editing. Previous experience included editing copy and news for various Southern California newspapers, including the Los Angeles Times. She earned a bachelor's degree in journalism and mass communications in the University of Iowa.







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The series interviews individuals who have beaten debt by combining dedication, budgeting and clever financial decisions. Responses have been edited for clarity and length.
Kara Perez has never had a full-time job. The 30-year-old entrepreneur from Austin, Texas, juggled several part-time jobs during her 20s including catering, nannying to instructing girls' lacrosse at high school.
Perez completed her studies in 2011, graduating with her English degree, and over $20,000 in loan debt. Three years into "adulting" and no job offers coming her way, she realized she was unable to carry on with the burden forever. "I realized: No one can save me. I have to save myself from the life that I'm in," the woman says.
Perez made use of her gig-based lifestyle and kicked things into high gear by balancing five jobs and working seven days a week. She put every dollar she earned towards credit card debt.
Now debt-free, Perez has her own business known as a financial education and event company that teaches women how to manage their money. Perez shared her successes and lows with NerdWallet and her story may motivate you to .
What was your total debt and income when you first started?
I graduated in 2011 with a little over $25,000 spread across 5 different loans. When I was really serious [about the debt I owed during 2014, I only had $18,000 left and I earned $18,423.
How did you get in credit?
I went to my first choice college, Wesleyan University. I come from a family with a single income, and taking the loans was always part of my plan.
What was the reason that led you to pay off your credit?
I remember watching the people around me continue to live their lives, I felt like I was drowning. I was mostly crying and frightened. I was applying for jobs, but I wasn't employed. I was just three years out of college and working as a part-time caterer and 10 hours a day as an office receptionist at the gym.
My friends were out on trips to get promotions or real jobs, and I was stuck.
(When I was first learning about money] I had to put one student loan for six months, because I couldn't afford the payments.
What steps did your take?
I did two things that I did: I reduced everything to remotely feasible in my financial budget. Then began to look for work. I was a driver for a high school golf team. I was a freelance writer for the price of $12 per hour for small blogs as well as freelance social media management.
I also started to be extremely thrifty. I would take the leftovers of my catering work and eat those instead of buying groceries for a few weeks.
(Perez had multiple roommates at the time. My roommates were my most cherished friends, but they were all from wealthy families with no debt. People were very supportive and my friends would always return home for dinner , instead of requiring me to eat out.
I'm still a bit frugal. I live with my roommate and boyfriend, and don't go out to eat often.
>> MORE:
It was surely a difficult task to balance.
I had five different part-time jobs, and often was working seven days a week. I was absolutely exhausted by the end of it but I was proud as hell.
Tell me about using the debt avalanche technique to pay your loans.
There was one Federal loan at 6.8 percent. That was the highest interest rate I had. The focus is on the debt that has the highest interest.The loan with the highest interest rate. I put any extra payments towards that debt and made the minimum payments for everything else.
Did your income change through the over the years?
Catering as well as the social media work I performed was a per-hour job, so I asked for more hours. I also negotiated for raises at my catering and nonprofit jobs, which was helpful. I made the leap from $12 per hour as a caterer to $15.50 over the time of the year. In 2015 [the year she paid off debtI earned $32,249.63.
What would you have done differently?
In retrospect, the most important thing I wish I had done was to invest into my retirement accounts tandem with getting rid of my debt. I did not start investing until afterwards and that was the perfect time for my money to have been growing in the bull market.
What are your current goals?
I work on my company full-time. I'm also a super-saver; I want to build up enough money to make work become an alternative. In the past year, I have kept 72% of my net income by using a to .
How do you get rid of your personal debt
Make a budget to ensure you have the ability to put money toward debt, but also save for the unexpected and put some away for fun. In this regard, we like the , in which your spending is divided among needs, wants, and savings and the repayment of debt.
The debt avalanche technique that Perez used is a more efficient way to pay off debt because you can lower interest rates, however, for quick wins you could also attempt to pay off your smallest debt amount first.
As Perez says, it is something that could and should be done alongside repayment of debt.

Photo by Shane Henderson.



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







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