Roth IRA Challenge: From Frugal to Free

karaHappy Friday everyone! I’m so excited to introduce Kara today on the blog. She writes over at From Frugal to Free. She has a track record of kicking debt fast and now she’s just about to venture out on her own! She’s here today to report on taking the Roth IRA Challenge which tracks $5500 of money (how it was earned, where it went, and lessons learned). Take it away, Kara….

I have a different relationship with side hustles than your average personal finance blogger. I’m employed part time at a non profit, part time at a catering company, and part time as a freelance writer. I don’t have one main job, and then pick up side work here and there. My whole life is side hustles!

In 2015 I had no fewer than seven jobs. For whatever reason, I haven’t ever been able to find a full time job. Great Recession, English major, stagnant wages…it’s hard out here for a Millennial!

Still, maxing out my IRA each year is super important to me. I’ve really just started to save for retirement, and I want to do as much as possible now. So, where am I finding an extra $5,500 in my budget?

All over! Since my income isn’t set month to month, and since it comes from a variety of sources, I don’t allocate one side hustle income directly to my IRA. Instead, I put away chunks of money each month, and that money can come from any of my three jobs.

However, this wouldn’t be much of an article without some kind of side hustle trick, would it?

If there’s a month where I have high expenses (like when I moved in April and had to put down a deposit, as well as buy some things for the new place), I will pick up more catering shifts to compensate. I am driven to hit my IRA max no matter what I have to do. Normally I cater fives times a month. In April and May I’ll be catering 7-8 times a month, in order to bring in some extra money. After taxes, I usually take home about $120 for one catering event.

I also just turned 28, and got $200 from my mom. (Thanks Mom!) Every year, any birthday money goes straight to my IRA account.

Finally, I save all my cash tips from catering, and any coins I find/get back from cash purchases. Every six months or so I cash in my jar at my bank, and deposit the results into my savings account. I’ve done this three or four times now, and have never deposited less than $70.

I’m about $1,500 away from maxing out my IRA for 2016, and I plan to do that by early May. I’ve been diligently saving my extra pennies since February, and have been able to tuck away around $1,300 a month for my IRA. It’s been a brutal schedule, but I’m so close to the end!

Let me talk about the brutal schedule for a minute. Catering, and food service in general, is hard work. I’ve been in the food service industry for five years now, as a waitress and a caterer, and it’s honestly been the most challenging job I’ve ever had. I work about 50-55 hours every week, some weeks up to 70, and between 12-30 of them are catering.

Events are usually eight-twelve hours long (not including drive time, usually another hour total), and you’re on your feet for most of that time, moving heavy things around. Moving a box full of hundreds of salad forks, dinner forks, butter knives, and steak knives is hard. That stuff gets heavy! And of course, it’s an emotional drain. You’re there to serve the client however they want, and always with a smile on your face.

I’ve been catering for two and a half years now, and the money I’ve made there has paid my rent, helped me pay off my student loans, and in general been a huge asset. As I’ve gotten raises at my nonprofit job, and added new side hustles, I’m realizing the money I make isn’t enough for the time I spend catering. For the amount of effort required, the money is no longer good enough.

I plan on catering for the rest of the year, but I am pulling back after May, to about three events a month. Rather than pour all my time and energy into this side hustle, I’m planning on creating a new career as a freelance writer! I recently realized that sometimes a side hustle is just plain not worth it. I’ve been working my butt off at two jobs I don’t really like, when I could be devoting myself to one job that I do really like. Let me tell you, it was a revelation.

More money is always nice, but find a side hustle that works with your life. Don’t make yourself miserable, or work for less than your value, just because you want some extra cash.

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16 Comments

  1. This brings back alot of memories from back when I was a banquet server before going to graduate school. There were a lot of weddings. As you probably know, you have to clear off everything on the table after dinner (water goblet, coffee cups and saucers, etc.) – those trays were HEAVY.

    I’ve always worked hard, but I spent it all. Good job saving so much at a pretty young age. You’ll be in such good shape when you’re my age, in five years.

    Good luck with the freelance writing 🙂

    • MaggieBanks

      Isn’t she doing great? I’m so excited for her to go out on her own! I’m loving this series!

  2. thx for sharing his story. Kudos for building up income out of different income side hustles. You have a strong goal to max out your IRA that soon already.

    When a student, I worked at a bakery in the weekend. Very of the the opening shift on Sundays.It teaches a good lesson on hard working and work ethics. Being there at 6:30 am is sometime hard, especially after a part evening.

    Good luck with the writing career

  3. Man, catering does sound tough! I also somehow didn’t realize that your non-profit job was part-time. I’m super impressed that you’ve been able to juggle so many different jobs over the years. I’m curious to know how you have been handling health insurance — do you pay out of pocket?
    In any case, thanks for sharing your story here! You’re inspiring me to try to max out my Roth IRA (though in my case I still have those pesky loans to deal with, so honestly it’s hard to choose between them…).

    • I didn’t invest anything when I paid off loans. My debt was so personal, I really needed it gone for my mental health! I would recommend trying to put some into investments now though- $2,500 adds up over the years!
      And for healthcare, last year I paid out of pocket. This year I get a stipend from the non profit, but overall that job is still not a great deal. Big fan of Obamacare over here!

      • MaggieBanks

        I also hope you talk about healthcare costs with the new shift to freelance. It’s one of the main things keeping Mr. T from taking the leap I think.

  4. The cater-waiter thing can be brutal. I remember a job I did on a boat where I got sea-sick. I was in my 20s, like you, and in addition to that I did promotional modeling work, office temp, theater usher jobs – anything to pick up money while acting. So my situation was similar to yours, yet I never dreamed of saving money, let alone enough to fund an IRA. Well done, Kara!

    • PS – Mr. Groovy reminded me IRAs weren’t even part our our consciousness when we were in our 20s. They were still fairly new and our parents never had them. (But we did have passbook savings accounts back then!)

      • oh my goash, I had a passbook savings account as a kid! haha, i cherished that thing. Saver from early on I guess!

    • MaggieBanks

      I always wanted to be a theater usher! Free shows, amiright?

  5. Kara is so inspirational–way to crush it with all of those gigs. And she has the courage to venture in a new direction. Wow!

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