Jun 17

The Freelance Creative Who Took Control of Her Debt After Leaving Her Job

After many years of fantasizing about leaving her job, Karen* left her difficult position in television production to pursue a creative career as an artist and musician. Soon after quitting, her uncle, who lived on the opposite coast, passed away. She found herself covering flights, hotel rooms, and other travel expenses for her immediate family of four people. At age 30, she had debt — five figures worth — for the first time in her life. Things started to get better when she took a workshop for artists and their finances that changed the way she approached managing her debt and savings.

 

 

The Stats

Highest amount of debt: $12,000

Time it took to pay it off: 18 months

Credit Cards: 3

Personal Loans: 1

Income: around $32,000 at the height of the debt

 

 

A frugal start

I grew up with a fear of debt. My family was always very vocal about their anxiety around money and debt. As a result, I was wary of credit cards and student loans. I studied hard in high school with the intention of receiving a scholarship — and it worked. I received a full scholarship for four years, worked two years as a Resident Advisor for free room and board, and got another scholarship to study abroad my junior year. Using the library saved me money on books. The only student debt I graduated with was for room and board my first year.

 

During college, I worked at a cafe and bought everything with a debit card or cash. I hardly bought anything besides books, used records, secondhand clothes, and art supplies. Spending money at restaurants and bars made me feel guilty, so I rarely ate out or went out.

 

I opened a super high-interest credit card in my mid-twenties to take advantage of the cash back rewards. It was paid off in full every month, and I made a few hundred dollars a year this way. I decided to get another card because I thought I could get even more rewards, then I got another credit card to keep my checking account free at my bank.

 

 

Getting into debt

A few years out of school, I was working in commercial production and had low rent and expenses. My job seemed like a good situation — it was somewhat flexible and the hourly rate was more than I’d ever been paid. But after a few years and a series of upsetting work experiences, I left my job in order to pursue my career as a performance artist.

 

A few months after that, my uncle passed away on the east coast. Because my family, who live in California, couldn’t afford the travel, I used my credit cards to pay for my mom, dad, and brother’s plane tickets, hotels, and meals when we traveled to the funeral. This racked up to about $10,000 in total. I knew I wasn’t going to be able to pay it all off that month, but I kept making charges. Somehow, knowing I couldn’t pay the bill actually made me spend even more than usual. It felt like emergency spending, but I was definitely making choices that were out of character — buying dinner for the whole group, renting four cars for twelve people. At the time, I felt like I was taking care of my family, but I think I used spending to deal with grief and stress.

 

From then on, I began to carry balances on three credit cards. I tried to not use the one with the highest interest rate but couldn’t always avoid it. As a new freelancer, my income was unstable and I did a lot of work for free. One month my partner, who is also a freelancer, and I earned almost nothing. I ended up borrowing money from my little brother who has both a steady job and savings, a privileged thing to be able to do, but also, a huge wake-up call.

 

Listening and learning

In the middle of this low point, I was scrolling through Instagram and saw a post about a workshop at the Women’s Center for Creative Work called “Getting Real With Money” led by the writer Beth Pickens. I signed up right away. The first class covered the relationship between family history and psychology and money. People shared their stories, many through tears.

 

The homework for the second class was to compile a full rundown of all debt, assets, earnings, and spending. Finally, all the guilt and anxiety I’d been feeling was laid out before me in numbers, which felt like a huge relief even though my debt was now five figures. I was also surprised to learn that, quite unlike in my college years, I had been spending a ton of money on books.

 

In the weeks following the workshop, my work picked up because I started hustling harder than ever and was lucky to have supportive friends who tossed work my way. With a more regular income flow, I decided to put my lessons to use.

 

 

Turning it all around

I wanted to get out of debt within 18 months and so I consolidated my high-interest cards onto one card with a 0% introductory APR (which lasted 18 months). I hustled to work more jobs and when I was paid, I’d split the money evenly between expenses, paying off debt, and future taxes. Every single check was divided this way; I used the phone app from my credit union (which I liked more than a bank because it was less corporate) and could easily transfer the money towards the savings accounts. I started an emergency fund as well and would put odd amounts of money in there with every larger deposit.

 

I felt a rush every time I’d transfer money to savings or paying down the card. By the time the 0% APR offer ended, I had fully paid off my debt, and had a little money in savings as well. I’m still paying back my brother, whom I owe a few hundred dollars, with this method — 1/3 of every payment gets Venmo’d directly to him.

 

 

My debt lessons

1) Set rules and follow them
Knowing that a specific percentage of every paycheck would go directly towards paying off my debt saved me time and energy.

 

2) Use apps
Being able to budget on my phone helped encourage me to do it more often.

 

3) Be kind to yourself

Having debt is not a character flaw. It also doesn’t mean you messed up — outgoing was just more active than incoming. It’s easy to make questionable financial decisions when you’re stressed, grieving, or feeling desperate.

 

 

*Name has been changed

Related

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How Losing My Job Prompted Me to Pay Off My Five-Figure Debt