Author Topic: Got Debt? Here's a Solution  (Read 2867 times)

nexus

  • Pencil Stache
  • ****
  • Posts: 815
  • Age: 33
Got Debt? Here's a Solution
« on: July 28, 2016, 05:10:53 PM »
Agree/Disagree: it's up to you.

You've absorbed all you can from MMM. You're living a simpler, more frugal life, riding a bike, paying down your debts, and getting real impatient on the long road to financial independence. Why? Well, you've got high interest consumer debt and/or a student loan and/or a car payment and/or [insert liability here].

You've done your projections and based on your current resources it seems like it is going to take FOREVER AND A DAY to finally EXTINGUISH THE PERPETUAL FLAMING LOCKS that you call hair for whatever reason.

Here's my solution:
Send yourself to jail. No, not real jail! Employment jail. Yep, I'm talking about picking up a second part-time job at the car wash like Walter White did before he Broke Bad.

No, it doesn't have to be a car wash, but hear me out. You're in debt. You work a full 40+ hour per week job, then go home and enjoy your free time to unwind and relax. You worked really hard all day, ate a brown paper bag lunch while your coworkers went out, deserve a nice cold beer, a home cooked meal and some quiet time before you have to get up and do it again tomorrow. (psst!...complainypants)

You have all of this FREE TIME in the evenings and on the weekends to enjoy yourself. Are you really free? Remember that money you owe? All that money you owe is accruing interest. It's stealing your freedom and keeping you in the day job grind longer and longer. See where I'm going with this?

My suggestion:
Pick up a second part-time job somewhere and use those paychecks to go directly towards debt (or into an investment account if you're debt free).

My experience:
2013: I worked a full-time salaried position 40+ hours a week and on evenings and weekends I went and delivered pizzas to pay off my '06 Scion Xa much, much faster a few years back. I'm a sucker for tips. I like the immediate reward at the end of the night that I can go deposit into an ATM. I tracked my tips in Excel when I got home each night to keep me motivated and for tax purposes. (Then I sold my car, moved cross country and financed another one. Very dumb move on my part, but I digress.)

2015/2016: Before I knew about MMM, I had been giving tennis lessons and stringing rackets to fund my portion of my SO's graduation trip to Europe. I amassed enough cash for everything, all the while not having to stray from my savings & investment plan. The great news is I didn't even spend all of the $5,000 I had saved for the trip and was able to tuck the rest into an investment account when we came back. I made $40 per lesson and roughly $10 per racket.

Here's what I like about this idea:
1. It lets you flex those badassity muscles. It shows just how hard you're willing to work.
2. A second job keeps you busier.
3. If you're busy, you're not buying crap.
4. If you don't have as much free time, you're much more mindful of how and with whom you spend it.
5. If you're not home, you're not running up the utilities.
6. You get more free time back when you get out of debt. It really translates into freedom (from jail) and it has a clear ending point. It is only temporary!!
7. *Because no one wants to work two jobs, it makes you even more mindful of what you're doing with your regular paycheck (unless you're silly enough to think extra income = extra spending).
8. You're inadvertently increasing your savings rate (or debt reduction rate) by temporarily increasing your income and putting it towards savings (or debt).


Possible 2nd job options that are better than minimum wage
--> Pizza delivery Driver
--> Uber/Lyft Driver
--> Bartender (personal favorite and am trying to find a gig in the East Bay. Possible barriers to entry**)
--> Personal trainer (requires certification it has a higher barrier to entry)
--> Server/Waitstaff: Depends on the state you're in. CA is great. $10 minimum wage plus tips. TN wasn't so great when I lived there briefly in 2013. Less than $3/hour plus tips. A slow shift and you're boned.
--> After school tutor: Very rewarding & I often see jobs like this offer $15-$20/hour

I was an assistant tennis coach during college. Usually you get a paid stipend at the end of the season that has ranged --for me at least-- from ***$500 to $3,000. If your students go post-season, there's even an extra bump in the stipend. I managed to 'assistant coach' my high school team while I was in college all four years.

"Easy 2nd jobs" (minimum wage warning)
> Front desk at a gym
> Front desk at a hotel (overnight especially)
> Night janitor: This could be difficult if the job entails stripping & waxing floors, but most other janitor duties are pretty easy. Vacuum, mop, sweep, trash, clean windows.
They can offer potential perks like free gym membership, discounted hotels, and new skills with floor equipment.

Thanks for reading. Feel free to add your own job ideas or experiences to this list.

This plan might not work for everyone. Here are a few situations I acknowledge
1. If your day job is physically exhausting
2. You have children you need to raise
3. Your day job has irregular hours or you have to be on call

The optimal audience could be anyone from bright-eyed, bushy-tailed 20-somethings that have near-infinite energy to folks that have grown children that require less supervision to anyone with a fairly regular schedule and free time in the evenings/weekends.

*Gross generalization here, especially since I look forward to giving lessons and plan on doing it well into Financial Independence.
**I'm debt free but have a genuine interest in mixology and would like to put the additional fund into my F.I. fund, or towards another trip.
***$500 was the year I was only there twice a week and split the stipend with 2 other assistant coaches. $3,000 was when I was able to be there 5 days a week, plus go to the away matches, plus the team went post-season. Other years varied depending on the school district's budget and politics I let the main coach deal with.
« Last Edit: July 28, 2016, 05:18:13 PM by nexus »

Shor

  • Bristles
  • ***
  • Posts: 478
  • Location: Orange County, CA, USA
Re: Got Debt? Here's a Solution
« Reply #1 on: July 28, 2016, 05:48:40 PM »
I just want to expand here on one advantage I've considered about getting a second job.
It will force you to stick to your working hours.

When your primary job is a salary position, there can be a constant push to work those extra late night hours, especially if you don't have family waiting for you to get home, there's always that extra push you can do to move a project along further (naturally it goes monetarily unrewarded). Getting a second job will ensure that you stick to your set schedule.

Also, if your primary job is sitting in a chair all day, finding something physical, or socially engaging will definitely help to change the pace, prevent the mind fog from glazing over.

On the down side,
Physical/Mental exhaustion at the end of the day can definitely open the door for a little bit of extra spending: late night quick bite to eat, car drive instead of bike commute, eat out instead of cooking batches. Not necessarily super pricey, or a waste of time, and overall you will probably make more in a side job than you spend extra for the convenience.

I think one of the hardest parts is actually landing decent PT hours. California in particular is going to might see a job squeeze on PT workers over the next 5 years as hourly rate minimums rise. If you are the PT worker that is least flexible in filling in the gap hours, you might be the first up on the chopping block.

NV Teacher

  • Pencil Stache
  • ****
  • Posts: 553
Re: Got Debt? Here's a Solution
« Reply #2 on: July 28, 2016, 08:25:41 PM »
Sometimes it's not because you have debt, sometimes it's just life.  My dad died in 1985.  My mother was left with a farm and four kids to finish raising.  My parents were always frugal because they had to be.  After paying for the funeral and medical bills not covered by insurance my mom had $700 in the bank.  She worked as a school lunch lady in the morning, a clerk at a gas station in the afternoon, did the billing/books for a water company and ran the farm in her spare time.  I was complaining about work and she told me that she once worked three and a half months straight without a day off. I shut my mouth and quit whining.  She just retired from the last job last year at 86 years old.  I have little tolerance for people that complain about their situations but aren't willing to work their way out of it.

nexus

  • Pencil Stache
  • ****
  • Posts: 815
  • Age: 33
Re: Got Debt? Here's a Solution
« Reply #3 on: July 29, 2016, 09:33:18 AM »

On the down side,
Physical/Mental exhaustion at the end of the day can definitely open the door for a little bit of extra spending: late night quick bite to eat, car drive instead of bike commute, eat out instead of cooking batches. Not necessarily super pricey, or a waste of time, and overall you will probably make more in a side job than you spend extra for the convenience.

I think one of the hardest parts is actually landing decent PT hours. California in particular is going to might see a job squeeze on PT workers over the next 5 years as hourly rate minimums rise. If you are the PT worker that is least flexible in filling in the gap hours, you might be the first up on the chopping block.

I definitely agree about the exhaustion. I was logging up to 65 hours between FT and PT when I juggled the pizza gig back in 2013. Once in a while I'd check the schedule and discover an extra 16 hours of work scheduled on the weekend. Pair that with two or three four-hour shifts during the week and you hit 20+ hours real quick. The only thing that kept me going was seeing how quickly I was able to pay down the principal balance. By the fourth month, I was burnt out but so was the loan. Freedom never felt so good.

Nowadays I might string 5 rackets during the week, which is about 30 minutes per racket and equates to 2.5 hours of work, or $50. My lesson clients are hit and miss; I get an average 3 of them per week also for another $120. That puts me at a cozy 5.5 hours of part-time work for an extra $170 per week, or $680 a month. Sometimes it ends up being closer to $1,000 or $100 depending on weather/leagues/teams/seasons.

For math's sake, $680 per month compounded over a decade would be an extra ~$100k added to the stash. Using the 4% rule that's an extra $4,000 annually you could add to your FI income or an extra $333 per month. I think an extra $600/month is fairly attainable for a PT job with tips, or a $10/hour job 15 hours per week.

Lastly, I'd think the opposite would happen. The mandatory rules of Obamacare that state if an employee works more than 32 hours per week, they are considered full time and the employer must provide healthcare options. In order to dodge additional expenses (and generally screw their employees), I believe the trend has been for companies to hire more part-time workers and fewer full-timers. I have friends who often complain that as soon as they get even remotely close to 30 hours in a week, they start getting sent home. Their solution is to juggle multiple PT jobs with (mostly) flexible employers.

nexus

  • Pencil Stache
  • ****
  • Posts: 815
  • Age: 33
Re: Got Debt? Here's a Solution
« Reply #4 on: July 29, 2016, 09:34:31 AM »
Sometimes it's not because you have debt, sometimes it's just life.  My dad died in 1985.  My mother was left with a farm and four kids to finish raising.  My parents were always frugal because they had to be.  After paying for the funeral and medical bills not covered by insurance my mom had $700 in the bank.  She worked as a school lunch lady in the morning, a clerk at a gas station in the afternoon, did the billing/books for a water company and ran the farm in her spare time.  I was complaining about work and she told me that she once worked three and a half months straight without a day off. I shut my mouth and quit whining.  She just retired from the last job last year at 86 years old.  I have little tolerance for people that complain about their situations but aren't willing to work their way out of it.

Your mom's a badass and you're very fortunate to have such a hard working, awesome woman in your life. :)

nexus

  • Pencil Stache
  • ****
  • Posts: 815
  • Age: 33
Re: Got Debt? Here's a Solution
« Reply #5 on: July 29, 2016, 10:15:26 AM »
My Interview Experience With Part-Time Employers

So you've submitted a crazy amount of applications and finally secured a job interview with the person that could -potentially- help you pave the road to faster debt freedom (or FI). Here are a few tips I've used.

1. Be honest and up front about your availability. If you get off work from your day job at 5, don't tell your PT boss you can be at work for him at 5, or 5:15. Be realistic. I typically like to have 30 minutes to 1 hour between jobs in case I am running late or need to eat something. If the shift starts right when you get off from your day job, maybe it isn't the best fit.

2. Similar to #1, make sure they understand that you have a full-time day job. "I'm currently working at ABC Company and am looking for some extra work outside of those hours."

3. "So what makes you a good candidate for this job?/Why do you want to work here?"
-> I've got $X,000 in debt and I'm incredibly motivated to pay it off.
-> I'm trying to save up for a down payment on a house and this job would make it go by faster.
Even though it doesn't answer the question directly, it shows that you've got goals and you're going to show up and get shit done.
The $X,000 in debt one can tug on the heart strings of the hiring manager. They don't know you're an MMM reader and you're going to crush that debt in no time. It gives them the sense that you'll be around for (quite) a while. Most PT/minimum wage jobs accept that there will be frequent turnover. That's the nature of the beast.

4. Not really a tip, but its not likely that you're their typical interviewee. You're going to stand out because you're much more professional, which is probably in stark contrast to what they're used to. Being an MMM reader, you're probably more qualified to do their job than they are (higher education, more years of management experience, etc).

5. Go into interviews relaxed. You know that you don't need this second job. Regardless of the outcome you still have a job that pays the bills and gets things done. Dress professionally, but keep things casual. You'd be surprised how often a hiring manager breaks script and takes a genuine interest in your regular job. That's the one you want to work for.

Drawbacks to part time jobs
1. Working with immature coworkers (callouts, drama, and general buffoonery)
2. Working with inexperienced/cruddy managers (bossy, condescending, half your age)
3. Dealing with customers (Let's face it, some people are jerks)

Additional perk: Although rare, you may end up being offered a promotion to shift manager or another position higher up in the company. It isn't a bad way to get your foot in the door and possibly score a better position within corporate that pays better than your day job and part time job combined. It's a sneaky/clever back door way into internal positions within the company too, especially if they have a culture of promoting from within like Chipotle, Trader Joe's, and Costco, just to name a few. Companies don't want to underutilize their top talent. You just have to put in some time and then find a way to get noticed, usually by taking a few moments to apply for open positions within corporate.