The Winner of the America Saves Week Challenge!

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america saves week challengeEarlier this month, we held a contest in honor of America Saves Week. Readers were invited to share their saving experiences with LearnVest over the course of the week. The winner, chosen at random, would receive a $250 boost to their savings, courtesy of LearnVest!

We had so many great entries, and we’re thankful to all the readers who reached out.

We’d like to congratulate Jill from Tampa, FL for winning the America Saves Week Challenge!

Jill’s story was so remarkable that we’d love to share it with all of you:

“I am in the first generation of my family to attend college. My parents were not willing to co-sign on my loans, and I made the mistake of supporting my now ex-fiance. In total, I have about $110,000 in credit card and student loan debt. My $90,000 in student loan debt is just for my bachelor’s in interactive media, and $80,000 of that is private loans at 9.275% interest. (Editor’s note: Read about why private student loans are worse than federal loans.) That debt total doesn’t include my current mortgage, either.

“Needless to say, I really need to save!  My goal is to get to at least $1,000 in savings while chipping away at my debt. After doing several balance transfers and calling all my credit card companies to see if my interest rates could be lowered (only one could be cut by 2%), my credit card balances all have a 0% APR or a 9.99% interest rate. But countless times, I have gotten so frustrated with my debt that I’ve drained my savings account to pay off credit cards.

“Thankfully, I’m not defaulted on any of my loans and am paying more than the monthly minimum in most cases. But at the same time, the debt feels like a curse. Financial advisors and debt consolidators can’t do anything for me because I’m not defaulted.

“Meanwhile, I’ve been working on trimming my expenses. A couple months ago, I cut my cable but kept my internet speed high. Last week, I called my internet service provider and asked for the cheapest internet plan. It saddened me to do this because I’m a web developer and gamer, and the majority of tasks I do are online. When the service technician guessed I was doing this to save money, he found a cheaper plan that included local channels—saving me an extra $260 a year.

“I’ve also saved by doing most of my grocery shopping in ethnic markets and a nearby farmer’s market. I buy in bulk, and anything I can’t use immediately, I freeze. I limit my spending to only things I need; I will stand there for as long as necessary while weighing how much I need an item. I even purchased a box of instant Ramen noodles and am prepared to relive college all over again. Dining out has become foreign to me and I’ve started to bake my own breads (yeast and flour! so simple). I even started keeping track of expenses in a Google spreadsheet.

“At the same time, I’ve been trying to earn extra money. I completed my first mystery shop (thanks to LearnVest!). It was nerve-racking at first but eventually I got the hang of it. I hope to complete more of these shops. I’ve also picked up some jobs here and there, anything extra friends or acquaintances need done.

“To be honest, I am very wary of the future. My company does not offer a 401(k) or any type of retirement plan/benefit. My private student loans tell me I still have 26 years of repayment, and I am already 28 years old. I am also stuck in a tax bracket with no benefits of any sort—or at least it feels that way. I feel like I’m floating around with a broken motor. But I’m still truckin’ along. I have to. What else can you do?”

Thanks for sharing your story, Jill. We asked Sophia Bera, LearnVest Planning Services certified financial planner, for her recommendations on your situation, and this is what she said:

  • Increasing your income is a great way to get closer to paying off debt—you could try looking for a new, higher-paying job or negotiating your salary. If you decide to search for a new job, look for one that has a 401(k) plan where the company will match your contributions—that’s essentially free money for your retirement!
  • You could sell your home and move into a low-cost apartment for a while or in with family until you can rebuild your savings and pay off your credit card debt. Or you could rent out a room in your house for extra income using a service like Airbnb (though be sure to check the legality of that for your city).
  • Keep looking for a part-time job or freelance work and split this extra income between building up savings and paying down credit card debt. (Check out how some LearnVest readers make extra money on the side.) Don’t pay extra on your student loans until your credit cards are paid off.
  • Set up your student loan payments so that they are automatically paid on time every month. You don’t want to be charged late fees or end up defaulting on these and have them go to collections.
  • Look at opening a Roth IRA or an IRA. You may be able to qualify for a tax-deductible IRA since your company doesn’t offer an employee retirement plan.

Keep an eye out for our next contest!