Destroying My Debt

Day 27| Paid: $2406.77 | Remaining Debt: $61450.11

Yes, I just added more debt….

My Payday Loan 2 gave me the option to refinance. I realized that my gap between my debt payments, other expenses, and my income wasn’t completely closed and I wouldn’t be able to pay all my bills this month. So, I refinanced that loan for another $300.

It is a bandaid, but a poisonous one.

If I had any other short term options I would have take it. But I didn’t. I needed the cash, this week, and it was a quick an easy solution.

This is exactly how I got into this situation in the first place, and this is prime example of how I, and thousands of others, get trapped into the debt cycle, especially the payday debt cycle.

It didn’t help that I havne’t been able to Uber all week. I may have overestimated my ability to uber after work on weekdays. Part of it I am attributing to working extra hard this week to minimize the effect of my absence next week. Nothing like trying to do almost 2 weeks worth of work in one week. I always felt that the stress and extra work before and after a vacation almost defeats the purpose of the vacation.

I am so frustrated with myself right now. I am heading backwards from my goal.

Fortunately I am on vacation next week. I need the time away from work, and from a hyper focus on my finances. Maybe I should have cancelled the vacation, but now it has all been paid for. The only expense during the week will be gas and food, and I can keep the food expense to a minimum.

I am hoping the time away will give me some time to reflect, and maybe adjust my plan, and write a few more insightful posts. Hopefully it will give me renewed energy and motivation to really tackle this goal.

Day 24| Paid: $2406.77 | Remaining Debt: $61150.11

I would classify this weekend as semi-successful. I did not make as much as I hoped I would have, but overall it wasn’t bad.

I did 30 rides total over Saturday and Sunday. 15 each day. In total I brought in $255.71

$169.21 from Fares, which is an average of $5.64 a ride. The biggest fare was $14.75 for a 15.7 mile, 22 minute ride. Smallest fare was $3.31 for a 0.1 mile, 70 second ride.

$12.00 in Tips, from 6 passengers. 3 x $1 tips and 3 x $3 tips.

$74.50 in Promotions. $3 for 3-trip series, $6 for 3-trip series, $6.50 for 3-trip series, 2 x $4.50 for 3 trip series, 2 x $10 for 3-trip series, and $30 for 30 rides total.

Overall for 30 rides I was hoping for something a little closer to $300. Last year I could always count on close to $100 for every 10 rides on average, factoring in tips and promotions.

This weekend I tried to drive as much during the different 3 trips series as possible, and my goal was 30 rides, so overall I am pretty happy with the weekend. Lets see if I can get some more done this week before I leave for my trip this coming Saturday.

Day 21| Paid: $2406.77 | Remaining Debt: $61150.11

No Uber This Week

My supervisor is out sick (not covid) and things are a mess all around work, so I have been working longer hours this week to help cover, and as a result I am been stressed and exhausted after work. Combine that with a snowstorm and terrible promotions from Uber and I found myself not driving at all this week. In some ways it feels terrible not getting out and getting it done, but I know I have to take care of my physical and mental health first. I will see a little bump in my paycheck due to the overtime I worked this week, but it won’t be much. Th

Debt Payments

This week I paid some more minimum payments. Another $162 for Payday Loan 1 and another $87.86 for Payday Loan 2. I also paid both my Affirm Payments and one Afterpay. For Affirm 1 I just have the February payment left, and Afterpay has one more payment due next week. Then I can finally cross those off and that cash can go towards closing the gap in my budget. I also paid $400 toward my car loan, which is the minimum payment plus a little extra since I am still one payment behind.

Overall it has been a pretty depressing week. My primary job has been long and stressful, and between that, bad weather, and crappy promotions I haven’t had the energy to Uber. And I spent a whopping $824.69 in debt payments. I also haven’t gotten a chance to write and share here, which I really enjoy, because after work I have been too tired to think.

Weekend Plans: Uber

One thing I am looking forward to is Ubering this weekend. My girlfriend has a friend visiting so I am taking the opportunity to drive as much as possible. Unfortunately the # Ride Bonus is horrible this weekend, at least compared to last fall, but there are some decent consecutive ride bonuses, so I am going to try to make up for my lack of driving all week.

Day 17| Paid: $1370.27 | Remaining Debt: $61830.74 

This past week was my first week specifically driving with Uber to increase my income and pay down my debts.

As I mentioned in my previous posts I have done Uber occasionally in the past, but never consistently. My general goal is to hit the Weekday Quest, and Weekend Quest, of 20 rides each. So that would end up being 40 rides for the week, and I should come out to around $200 minimum and up to a max of $500.

This past week weather, my primary job, and my social life got in the way of hitting that goal.

I did a total of 10 rides with a total payout of $191.44. That is pretty far away from my goal.

However both the weekday quest and weekend quest were horrible. They offered $20 for 20 rides Mon-Thur, and $10 for 20 rides Fri-Sat. Honesty it is not even worth trying to hit those goals. Yes the extra money is nice, but not a real incentive to get out and drive.

However I did have a $100 for 10 rides quest for January, since I think Uber was trying to get me back out on the road. So I drove to hit that number, and decided to call it quits for the week once I hit that.

In total that $191.44 was broken down into $67.42 Fares, $8.02 Tips, and $116.00 promotions which was the $100 for 10 rides plus a $16 for 3 consecutive rides on Monday night from 9pm – 11pm.

The weather was horrible this past week, and my job was busy, so I had very little motivation to drive after work. Then I also realized that I am not going to see my girlfriend the next two weekends since she has a friend visiting next weekend, and the weekend after that I am heading up to the mountains for some skiing and snowboarding.

I decided that the best thing was to spend some quality time with her this past weekend, so I headed to her place Friday night and came back late Sunday. It is a 3 hour drive to and from her place, so I still did plenty of driving over the weekend, but I gave up any chance of bringing in more money with Uber.

January is typically slow, and the weather makes it hard to motivate myself to get out and drive. I drove one day in January 2020 and two in January 2019, and I think the same factors that preventing me from driving more this week were the same as then. There seems to be a lack of demand, and increase in drivers out, and low bonuses from Uber.

However I have to get more consistent and serious with things if I am going to reach my debt destroying goal. There is a decent consecutive ride bonus tonight from 9pm – 11pm, but there is also freezing rain outside and I am not sure if I want to risk driving on roads potentially covered in black ice, and thereby risking my own and the passengers safety, just for a few extra bucks. We will see, I will evaluate the situation tonight.

This weekend since my girlfriend will be busy with her friend visiting I have the whole weekend to myself, so my goal is to wrack up the mileage and the money and get back on track.

 Day 14| Paid: $1370.27 | Remaining Debt: $61830.74 

Today I paid $52 toward Afterpay, $80.91 toward the first Affirm loan, and $87.86 towards Payday Loan 2. Total of $219.91, all of which were minimum payments on those debts. Still even though it was only the minimum it feels good to get those down.

Now Afterpay only has one more payment due in two weeks, and Affirm only has one more due in February. That will lower my monthly minimum by over $150 and help close that gap between my income and expenses.

If you noticed even though I paid $219.91 my total debt only decreased by $167.34 That is because for out of the $87.86 Payday Loan 2 payment, only $34.43 went to principal. The rest was pure interest. Damn high interest loans.

Day 13| Paid: $1150.36 | Remaining Debt: $61998.08

In case you haven’t noticed I have not yet talked about my emergency fund. That is because I don’t have one. In fact I don’t have any kind of cash savings. I am one of those millions of Americans who couldn’t afford a $1000 or $500 emergency right now if it occurred.

This is probably one of the biggest reasons why I have continued to get deeper into debt. I run into issues, use any cash I have on hand, take out a loan or use credit, get late on other payments, and just keep spiraling down into debt.

One of the best things I can do, that anyone can do, is establish an emergency fund. Even if its just a small one.

There is no way I can build up a 3-6 month emergency fund and also get rid of this debt. The math just does not work out. Plus I think that it is financially irresponsible to be saving up thousands of dollars why I am paying ridiculous interest rates on loans. But I do think it is reasonable to try to build up a small $1000 emergency fund, as well try to build up an additional cash reserve equal to my weekly paycheck so I am not getting my balance down to, or below, $0 each Tuesday before I get paid.

I have two other expenses coming up soon that I have not mentioned yet, and really are not budgeted for anywhere.

First is an AirBnB payment for a small apartment I am renting the first week of February in the mountains. I haven’t taken a vacation since July and desperately need one. So I am going to take a week to do a few days of skiing, snowboarding, hiking, and snowshoeing. I already prepaid the lift tickets and any equipment rental back in November, as well as the deposit for the apartment. However I still need to pay the remaining $565 for the apartment rental. It was by far the best deal on lodging I could find, and even though this trip doesn’t match up with my financial goals I do need it for my own mental health.

The other expense coming up soon is an engagement ring. I don’t know the details on how much it will cost, and I don’t have an exact timeframe or plan on proposing. But I know I am going to do it in the next few months. My girlfriend and I have talked about it and its about time it happened. That will obviously throw a wrench in my plan but where I am in my life there will never be a ‘right time’ for things, so I am going to find a way to make it work.

Day 12| Paid: $1150.36 | Remaining Debt: $61998.08

As I have mentioned in my previous posts, my original goal for 2022 is to eliminate all of my debt except for my student loans and car loan.

However both my student loan and car loan are currently behind in payments, so I also want to get back on track and paying those on time. And of course I have to maintain the minimum payments on those loans as well.

Adding up the remainder of my debt, plus the late payments and minimum payments for those loans, that gives me a total goal of $27,157.65

(I already paid off that first pay day loan in a lump sum on January 7th, so I am removing that $1062.50 from all of these calculations)

Of course that $27,157.65 does not include any additional interest accruals. At this point I honestly can’t figure out what the interest is going to be. SOme of the loans have variable interest rates that change depending on my remaining balance, and the amount I will need to pay on interest for any of these debts will vary depending on how much extra I am able to pay toward the principal each month. I know there are calculators and spreadsheets out there that can figure this out for you. I have tried them out, but none of them seem to work, they don’t seem to allow different payment schedules in their calculations.

So in order to keep things easy for myself, even if it is not exact, I am going to round things up and say that my goal for 2022 is to pay $30,000 towards my debt.

I don’t know if that will cover all the interest that will accrue, leaving me with only the student and car loans left for 2023. However even if I do have some other debt left over I will be incredibly happy if I am able to put $30,000 towards my debt this year.

Breaking It Down

Goal: $30,000 worth of debt payments in 2022

That comes out to $2500 a month.

For months with 4 weeks that is $625 a week

Of course not all months have 4 weeks, and since I get paid weekly I do tend to think in weekly terms. So divided up into 52 weeks it comes out to a little under $577 a week. Of course we are already into the second week of January, so if I average it out over 51 weeks it is about $588 a week.

Basically I need to pay $588 a week, on average, towards my debt to hit my goal.

That is a lot of money. Especially considering my combined expenses and minimum debt payments are already more than my income from my primary job.

However I don’t think it will actually be as much of a stretch as it seems at first glance.

Right now my minimum monthly payments on my debt are $2088.38. That means to hit my goal I only need to find an additional $411.62 a month to hit my monthly target of $2500. That is not so bad. Especially if I am able to bring in about $200 a week from Uber, or about $800 a month. Half of that Uber money will go towards that additional debt payments, and the other half can go towards closing the gap between my income and expenses.

It is not fun, but it is doable, and I am going to get it done.

Day 11| Paid: $1150.36 | Remaining Debt: $61998.08

How much can I make per week with Uber?

That depends on so many factors:

• How many hours am I able to drive?
• How many rides can I get while I am driving? Determined by both rider demand, and driver saturation.
• How long do I have to drive to pickup rides? Longer drives mean more gas and wear and tear without getting paid for those miles.
• Are the trips I am receiving short or long? Long trips tend to be more profitable per trip, but often take you further away from requests. Short trips don’t pay as well but help achieve quests and bonuses quicker.
• What are the Weekday and Weekend Quests?
• Are there any Consecutive Trip bonuses or other Promotions that fit my schedule?
• Are there any Surges?

There are a lot of different factors that will determine how much I can earn each week. Because of that I am not sure if setting a specific monetary goal for each week is feasible. If I were Ubering full time and it was my only source of income I would definitely set a daily income goal and I wouldn’t stop driving each day until I hit that. But I work 40 hours a week at my primary job, and I still want to get quality sleep and spend time doing other things besides working and driving.

So if setting a weekly monetary goal isn’t practical for me what then?

I think what makes the most sense is to try to hit the smallest Weekday and Weekend Quest each week.

Almost every week, with very few exceptions, Uber has offered me a Quest ranging from 20/30 rides, up to 50/60 rides or even higher. They offer a weekday one fort that starts at 4am on Monday and ends at 4am on Friday, and a weekend one that starts 4am on Friday and ends at 4am on Monday. What that means, practically, is the weekday quest is from Monday – Thursday, and the weekend quest is Friday, Saturday, and Sunday.

I have learned through trial and error that I can realistically only hit the 20/30 ride quest. Most of the time I can only hit 20 rides, sometimes I can hit 30 rides. If I have a weekend where I plan on doing nothing else other than Uber I can hit 40 rides before I get completely burnt out.

Of course some weeks the quests just aren’t worth it. For example this upcoming weekend they are offering me $10 for 20 rides, and an additional $10 for another 10 rides. That means if I do 30 rides over the weekend I will get an extra $20. Obviously an extra 20 bucks is always nice, but it is not very motivating, especially when I used to get offered anywhere from $40 – $80 for 20 or 30 rides.

So the plan is to try to hit the 20 ride quest minimum each week and weekend. That means Monday – Thursday I will need to do 5 rides a day. And on weekends I will need to do somewhere between 6 and 10 rides a day. Since I like to spend at least one weekend day with my girlfriend it really means doing 10 rides on Friday and another 10 rides on either Saturday or Sunday. Of course I can do more rides one day and do less another day, but I find it easier to think about and accomplish when it is split up evenly. If I happen to do 6 rides on Monday, that means I have one less ride to worry about on Thursday.

In my experience I average 2.5 rides an hour. So after work on Monday – Thursday I will have to log in and drive until I hit at least 5 rides, which should take 2-3 hours. On Friday after work I will log in and drive until I hit 10 rides, which should take 4-5 hours.

Of course I will also try to time my shifts driving with any consecutive bonuses offered. If Uber offers a decent consecutive ride bonus from 9pm – 11pm, then after work I will go home, have dinner, recharge a little bit, and go out from 9pm – 11pm instead.

How much should I earn doing 40 rides a week? That is tough to say, for all the reasons listed above. At the low end each ride at a minimum pays $3.60, that is the minimum fare. So at a minimum I should earn $144. At the high end I could earn up to $500 in 40 rides. Based on my experience I think 40 rides should easily add up to $200, since I have to include any tips and promotions, and very few rides pay the minimum fare.

That is the goal: 20 rides on Monday – Thursday, 20 Rides on Friday – Sunday. Income anywhere from $144 to $500 with a reasonable minimum expectation of $200/week.

Day 10| Paid: $1150.36 | Remaining Debt: $61998.08

No matter what I am not going to get out of this debt simply decreasing my expenses. I already live fairly frugally and don’t have much more to cut out than I already am planning on doing. So the only other way to make this work is to increase my income.

As I have already mentioned a few times I have some experience with Uber, and Uber is the first source of extra income that I am planning on using to dig myself out of this hole.

My History With Uber

I actually started Ubering a little bit in October 2019. In the 2.5 months I did it in 2019 I earned $1309.87. In 2020, due to Covid, I barely Ubered and only earned $768.83, and in 2021 got a little more serious and brought in $4091.35. Since I started I have never been consistent with it. It has always been something I have done occasionally after work or on the weekends, only when I feel like doing it, and only when they have good promotions.

How Uber Pays

For those of you who aren’t familiar with how Uber works on the drivers side, for each ride a driver gets paid a set amount per mile and per minute. For example I get paid $0.68 per mile, and $0.13 per minute. If I have to wait over 2 minutes at the pickup, I get paid a small amount for each extra minute I wait, and if the distance from where I accept the pickup to the actual pickup location is over 10 minutes I get paid a tiny amount for each minute over 10 minutes that it takes me to get to the passenger pickup.

Basically what the base pay amounts to is not very much, it is barely over the IRS Mileage Reimbursement rate.. In fact of the $4091.35 I earned in 2021, only $2484.93, or 60.73% of the income, came from Fares. The other $1606.42 or 39.27% came from Promotions and Tips.

Promotions:  They are not consistent, and they are not always offered each week, and they vary drastically by market and can even vary per driver.

Quests: In my experience they usually offer 2 Quests each week, one from Monday – Thursday, and another from Friday – Sunday. In these if you complete a certain number of trips you get some extra money. Of course you have to select your quest prior to the start, and you are limited to only receiving the quest bonus that you selected and complete. These quests bonuses used to be much higher, but lately have been really low. For example right now I have a 20 trip quest bonus of $20, and if I do 10 more trips to make a total of 30 I will receive an extra $10. That is only a bonus of $1 per trip. I tend to always select the lowest quest each week since I am not consistent and honestly getting even 20 trips after work on Mon-Thurs, or on Fri-Sun can be difficult if I want to do anything else with my life besides drive.

Consecutive Ride Bonuses: Along with those quest bonuses they also tend to offer Consecutive Ride Bonuses where if you do 3 rides in a row, without rejecting or cancelling any, you get some extra cash. These usually have to start in specified area, and are limited to an hour or two of time. For example last night I had a 3 consecutive trip bonus from 9pm – 11pm of $16. It was very slow, so it took almost that entire time to get 3 trips in, but I got my extra $16. They may have morning or afternoon consecutive bonuses too, like today there is one for $5 for 3 trips from 3pm – 4pm.

Other Bonuses: And then every once in a while, if you haven’t driven recently, they may throw you a big bonus just for completing a few rides. The best one I saw was last year I had one that was 3 Rides for $100. It was one time, you couldn’t repeat it and do another 3 rides for another $100, but still that was a pretty easy $100. Right now I have one like that, 10 rides for $100, which I should easily complete this week.

Tips: And of course there are tips. Very few passengers tip, but the tips I do get go a long way to making it profitable and worthwhile. In 2021 out of the $4091.35 in total I earned, $329.92 was in tips.

All of this is to say that back in the day when Uber started, the pay was supposedly great. In 2019 when I started the pay seemed decent, but I heard from other drivers it had gotten worse over the years. Now, in late 2021 and the start of 2022 I am seeing the pay get even worse.

Even with the decrease in pay over time this is still the quickest way for me to increase my income. I want to find other ways to bring in money that are more passive and not directly tied to my time and decreasing the value of my car. But I need to start destroying this debt asap, and until I figure something else out Uber is the best place to start.

Benefits of Uber

Despite the decreased pay over the years there are some definite benefits to Uber, especially for my current situation:

It doesn’t take time to ramp up. Unlike other side hustles it doesn’t take time to build up an audience or customer base. If I want to make some money I can just turn on the app, give some rides, and make some money.

There is no set schedule. I can go online whenever I want, and turn it off whenever I want. I am not locked into any specific schedule which is ideal for my current situation.

Doesn’t require a large up front cost. Yes of course you need to have a vehicle, but I already do. Otherwise there are of course increased costs of gas, car maintenance, cleaning, etc… But you don’t need much cash up front to get things started.

Downsides of Uber

However Uber has some definite downsides as well including:

Increased wear and tear on my car

Passengers getting my car dirty, and increased time and cost of keeping the car clear

Potential for passengars throwing up

Potential safety issues with passengers

Why I Don’t Do Food Delivery Instead

I tried doing uber eats once, and the pay seemed even worse compared to driving passengers. Most of the time delivering food you have to drive to a restaurant, get out of your car and go inside, wait for the food, pick up the food, drive to the customers house or apartment, get out of the car, go into the apartment and find their door, drop off the food, and return to the car and drive back towards where the restaurants are. To me that seems like a lot of getting in and out of the car. The only benefit is you don’t have to deal with other people in your car.

But with passengers, the vast majority of them are friendly, quiet, and just want a clean safe ride. So you accept a request, pull up to their location, they get in, you drive to where they are going, pull over, and they get out. That is it. No walking into restaurants or apartment buildings. No waiting for a food order to be ready. It is very simple, and I vastly prefer it to delivering food.

So since I am already familiar with how Uber works and I generally enjoy doing it, that will be my first additional source of income to bridge my income/expense gap and increase my income to pay off my debt. Tonight I am going to sit down and figure out a game plan for Uber for the next year and how to get the most bang for my buck out of the platform.