My 2016 Budget Challenge: Am I Ruining My Career?

[Editor's Note: This is another episode in Max Wong's journey to find an extra $31,000 this year. Read the whole series here.]

As a freelancer, I never know when my next job is going to come or how much it's going to pay. Some of my jobs pay me $8,000 for one day's work, or have incredible perks like international travel — but that kind of gig comes around about once a year. Should I spend more time looking for higher paying work that only comes intermittently, or keep working low paying gigs as they come?

I recently had dinner with a business acquaintance who revealed that he is also $30,000 in debt. When I mentioned all the little side jobs I am doing in an effort to make an extra $31,000 this year, he laughed — and not in a good way. He is actually considering not taking a six-month job that he had been offered because it would only pay him $17 an hour.

His argument for not taking the job was this: It would take away his ability to accept better offers for half a year. Did I mention that this person has already been unemployed for four months?

Are My Side Hustles Keeping Me From Better Offers?

The dinner put me in a bad mood. Mainly because when I brought up my $31,000 budget challenge, he was critical of my work strategy. According to him, I spend way too much of my time and brain space working odd jobs, instead of focusing on landing a "primo salaried gig."

When I asked him what a primo salaried gig pays, he responded: $75,000.

I Hated Working 9 to 5

I used to have that primo salaried gig. I hated it. Not the primo aspects of the work, such as flying business class and free office supplies, of course — just every other single thing about it. I am not cut out for corporate life.

Had I stayed a corporate cookie, I would probably be several hundred thousand dollars richer. I would have, no doubt, paid down my house by now.

But had I stayed the obvious course, would I be able to leave the U.S., as have done twice in the last five years, and travel abroad for three months at a time? More importantly, would I be as happy as I am now? I don't know one documentary filmmaker or beekeeper who does the job expecting a huge payday.

Am I Wasting Money or Gaining Opportunity?

Aside from the fact that I think his ideal $75,000 primo salaried gig sounds like the worst, I am still trying to parse out whether his argument that I am wasting my time, and by extension my life, on activities that offer a terrible return on investment.

I often wonder if crazy side jobs always find me because I am free to take them. For example, would I have been able to spend four days interning for a photographer last month if I had a regular day job? If I had a 9-to-5 job, would I be able to devote as much time to activities like architectural photography that bring me pleasure, that I can potentially grow into a business? Have I exchanged a regular paycheck for more free time?

Is There Such a Thing as Good Personal Debt?

I do feel like, in my current situation, any income is better than no income. The faster I pay down debt, the less my debt will cost me in interest payments.

My $31,000 budget shortfall contains $15,000 in debt from a loan with a 4% interest rate (my housing costs and camera fund don't carry interest). My husband and I have been steadily paying down this loan with $800 monthly payments. Using a debt repayment calculator, I know that at our current rate, we will pay off this debt in 20 months, but end up paying an additional $515 in interest. In order to pay down this $15,000 by the end of this year, we are going to have to increase this payment to $1,695 for the next nine months. If we pay off this debt by December 31, 2016, we will pay up to an extra $251 in interest. (See also: How to Stop Paying Interest on Your Credit Card Debt)

By comparison, my dinner companion has $30,000 in credit debt over several cards with an average of APR of 11.9%. To pay off this debt in 20 months, he will have to pay $1,740 every month, and he will pay $3,063 in interest.

When I pointed out the high cost of using credit cards as a slush fund, my dinner companion did not bat an eyelash. He argued that I am letting my fear of debt overly influence my financial decisions. What if I am so busy putting my nose to the grindstone for small jobs, that I am missing out on bigger job opportunities? For example, although I had wanted to attend this year's Palm Springs Photo Festival, a major educational and networking event, I cannot afford it. Just the cost of the lodging and transportation for the festival would cut into my savings by $1,000. But, by not putting the cost of the festival on my credit card, am I losing out on leads for photography jobs or giving up the opportunity to learn new skills that would immediately improve my work? Am I being pennywise but pound foolish?

Work vs. Unemployment

Since January 1, 2016 I have made $5,190 in extra cash. This averages out to $1,730 per month. For the last four months, my dinner companion has been making $1,800 per month on Unemployment Insurance. (My dinner companion's assessment that I am a financial loser is undoubtedly colored by this fact.) His search for the primo salaried job, as far as I can tell, has also been much more leisurely than my constant hustle to rustle more side work.

Who Am I to Criticize?

Well, I am a financial writer who understands the concept of compound interest. As unpleasant as it was to get unasked for advice on my debt-killing plan, I made a major effort to listen to my dinner companion, if only so I could passive-aggressively complain about it in this post, and monetize my annoyance.

But I still wonder: Is he just really stupid or am I a rube for accepting minimum wage gigs when I'm strapped for cash? Dear reader, what is your opinion on my employment strategy?

Progress Report

Because our business taxes were due on February 29th, my husband and I decided to complete our tax prep for our personal taxes by that due date as well. Why suffer through tax prep twice? Our accountant just filed our personal taxes. We are getting a $2,934 refund from the IRS and a $1,654 refund from the state of California. We paid our accountant $470 for her work.

Goal: $31,000.00

Amount Raised: $13,478.00

Amount Spent: $5,303.72

Amount Left to Go: $22,825.72

Should Max continue hustling up wacky side jobs she adores or should she buckle down and find a regular job, like everyone else?

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Guest's picture

No regular job! If you had a regular job, would you still be able to pursue writing and photography with such zeal? I like the adventure of finding side gigs. And isn't there a way that you could still spend a little more time looking for the larger paying gigs, but also keep working your side gigs?

I think the dinner companion is rationalizing a bit too much. I used credit cards in the same way once, and it was a quick trip to bankruptcy.

My only thought on the low-paying side gigs is this: weigh the pay against the adventure. You don't want to get stuck in an underearning zone, but you do want to have time and space to grow in the areas that you're pursuing. If some of them pay less (or not at all) then that's fine for a minute. There is room for it to turn into higher paying work.

As for "regular" jobs, I have a "steady" job now, but one that is incredibly flexible. I could have the summer off if I didn't take on more work. That's the only way to have one, I think. And, I believe that no job is ever truly "steady."

Max Wong's picture

Hi Amanda!

Thanks for your thoughts! I think you verbalized something that has always been a nagging thought in the back of my head: no job is every truly steady. Often times, it's these little, weird, side jobs that led to the biggest opportunities for me. That said, I also like your steady but flexible job strategy. It's definitely something to aspire to. My job track has been 100% flexible, but that is a double-edged sword.

Guest's picture
Modernized Mrs

At a high level I feel you are comparing yourself to the standard American way of thinking about their financials. An individual with high credit card debt that refuses to acknowledge they have a problem. You are most certainly on the right track. Eliminating your debt allows you to free up your cash flow in the long run. Keep thinking about the future and the light at the end of the tunnel. I am not debt free yet, but I keep envisioning what that would feel like. As for your income stream, your first priority should be to be happy. If freelance, making your own schedule, having a flexible vacation timeline if perfect for you, then take it! So many people are jealous of those who are happy in their jobs. Don't allow someone how is clearly in denial set you off track. At the end of the day you are accountable for your happiness :)

Max Wong's picture

Hi Modernized Mrs.!

Thank you for your input! The dinner was so annoying because I really felt like I was being talked down to by someone who is a financial wreck. There are few things that annoy me more than expert advice from people who lack expertise. Thanks for backing up my suspicions.

I have actually been debt free and it is liberating! It's one of the reasons why I am so motivated to get back in the black. I feel like my life choices are limited by debt and that is the worst feeling.

Good luck in your debt-crushing journey! It's worth it.

Guest's picture

These are personal priorities. If you truly dislike working in a salaried position, then you have to decide whether you dislike that more than you dislike the rate you are paying down debt. I actually think that marketing costs (attending the seminar) are very valuable to small businesses. You have to decide whether you want to take that risk and potentially extend the amount of time it takes you to pay off your debt. The level of risk each person is comfortable with is individual. Your friend might have a higher tolerance for risk and dislike salaried jobs less than you (or he might even like salaried jobs). Just because your friend likes something doesn't mean that it's right for you or that you would like it too. But no one can answer those questions for you.

Max Wong's picture

Hi Jen2--

Thanks for your advice regarding marketing costs and their value to small businesses. As I am still considering attending the seminar, the value of self-promotion is something I should definitely add into the equation.

Guest's picture

He's stupid. I used to work with a guy like this. He quit after a few weeks, saying the job was beneath him. That was a year ago, he's still unemployed.

Max Wong's picture

Hi Guest--

I often wonder how poor I'd be if I hadn't lost my vanity years ago. Plenty of amazing people work jobs that are beneath their talent their entire lives. The job is what they do for money. It's not who they are.

Guest's picture

Don't listen to the dinner companion. You're happy pursuing your dream and although it may make less money, if you balance the credit cards right you can reduce the amount of interest. I restructure our household debt all the time. If it's not 0-1% I'll find a way to make it. I'm a tutor and writer, and I love the free-time and the ability to travel and take off when I need/want to without worrying about a two week annual limit. Just learn to work with balance transfers and stocks that pay dividends and you'll be golden. Good luck!