Do you feel like your low income is holding you back? What can you do if your debt load is higher than your income? Kara Perez founder of Bravely, paid off $25,302 in student loans while earning between $15,000- $32,000.
Her story has been featured in Forbes, Glamour, Elite Daily, and more. Kara is also the co-host of the highly addictive podcast The Fairer Cents with Tanya, financial blogger Our Next Life, who retired at the age of 38!
This girl rocks. Period.
In this interview with Kara Perez find out:
- How Kara paid off debt earning $15,000- $32,000
- How Kara increased her income with side hustles
- Advice for getting out of debt and starting a blog or business
The Beginning of Kara’s Debt-Free Journey
After graduating college with an English degree in 2011 Kara found herself waiting tables. Fast forward to 2014 she was working as a cater earning $12 an hour and a gym receptionist earning $9 an hour with an annual income of $18,423. She thought, “this is going to be my life forever if I don’t get it together.”
Constant financial anxiety was the root of her self-described quarter-life crisis. Her work was part-time, “I had so much free time; I would lie around the house and feel sad.” Her biggest anxiety rooted from having debt.
How Kara Paid off Her Debt
“Once I decide something, I am very good at being all in. My life revolved in debt-payoff. Literally everything went to debt,” said Kara.
She is the queen of the side hustles and was able to pay off her debt 100% through side gigs. In addition to catering, she worked as a social media manager, lacrosse coach, driver, research manager, development director, and freelancer writer.
Her advice for finding side hustles is to look for something that can benefit you in multiple ways. Her catering gig was a win-win because she worked on the weekends and was able to bring home extra food.
Kara also cut her expenses dramatically. That meant no coffees, no dinners out, no new clothes, and no expensive date nights. Her date nights became biking to the park and reading a book together. With her friends she became the one to initiate plans by searching for free events, going hiking, or having dinners in. She explained that cutting your spending is an amazing exercise in getting to know who you are. By the end of the month she found herself making 4 or 5 extra payments towards debt. One month she was able to pay $2,600 extra towards her debt.
How to Keep Your Housing Low in an Expensive City
One major barrier to cutting expenses is living in a city with outrageously high rent. For example, in Austin the average rent is $1,440. Kara has lived in Austin for six years and moved five times to keep her rent low. She encourages people to negotiate with the landlord. If you’re a nonsmoker, you don’t have pets, or could pay a few months upfront use that towards your advantage.
Kara currently lives with her boyfriend and another friend. “There is no shame in the roommate game. You can be house poor or apartment poor so quickly. Let go of what your life should look like. I’d be happy to live with a roommate if it saved $15,000,” said Kara.
Embracing the Frugal Life
Kara’s hard work paid off. Within ten months of deciding to become debt-free she paid off her final $18,000 in student loans. “I knew if I was really serious for a short amount of time, I could do this. I wanted the structure of working towards a goal anyway,” said Kara.
Unbelievable! Again, she paid off her final $18,000 in debt while earning around $30,000.
Although her income has increased, she still fully embraces frugal living. She keeps her thermostat on 86 regardless of the Texas heat and bikes versus driving as much as possible. Her current expenses are around $1,400 a month! “I like to do spending freezes often. If I know I am going to do a trip, I do a spending freeze to free up the extra cash,” said Kara.
Now she has an emergency fund, maxes out her IRA, and contributes to a solo 401(K) plan.
Kara’s Advice on Getting Out of Debt
“If you have high debt-load I recommend getting organized about your debt,” said Kara. Once you have a clear plan, she explained that everything doubles down naturally. It no longer feels like a sacrifice because you are working towards a clear goal. She said that increasing your income is a smart move to achieve long-term change.
Tips from Kara on Starting a Blog or Business
As founder of Bravely, she organizes events and retreats to empower women to manage their finances. She said, “Starting your own business is great, but it can be a real mental challenge. You spend a lot of time in your own head.” Her advice is to find a support group as soon as possible and have an active network to avoid feeling isolated.
Before quitting your day job for starting a business Kara recommends having at least an 8-month emergency fund and realizing that as a business owner it can be feast or famine. “Not everyone needs to be an entrepreneur, before you cut ties, be clear about why you want the lifestyle and the job of an entrepreneur.”
Kara shows that financial change is possible. She said, “No one is inherently good or bad with money. You can get good with money. You can teach yourself or learn from someone else on how to use money in your life.”
For some extra inspiration during your financial journey check out her podcast here.