How I Paid Off $25,302 of Student Debt on a Smaller Income

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This article is part of the Student Loan Debt Movement, which is encouraging and inspiring people to take action on their student loans.

Tell us a bit about yourself

I’m 27, my favorite color is green and I am debt free! I’m a freelance writer who writes about adventures in frugal living on the way to financial independence at my blog, From Frugal to Free.

How much debt did you start out with?

$25,302 in student loans. I had a small amount of credit card debt in 2012 but paid it off in two months.

What motivated you to pay off your debt?

June 2014. I was incredibly underemployed- working as a gym receptionist for $9/hr 10 hours a week and catering 1-2 times a week for $12/hr. I was constantly stressed about money and felt really lost. I was ashamed that I hadn’t been able to find a real job. I felt like I was wasting my time, my talent and my education. My loans were in deferment and I was having panic attacks thinking about what I would do when that deferment let up in August 2014. I felt totally out of control and realized I had to do something to take back my life. My debt caused me the most amount of stress so I decided to eliminate that.

What plan did you formulate to pay it off early?

I decided to cut all unnecessary spending until I was debt free. I spent money on rent, insurance, food, and utilities. Everything else was out! I’m an all or nothing kind of personality, so this really worked for me.

I also picked up more hours at my side hustles. I catered, did freelance social media work, wrote freelance articles and coached lacrosse.

I put my Christmas and birthday money, as well as my tax refund, toward my debt. Any extra money that came my way went straight to my debt load.

What resources did you use to help you through this process?

I used to binge read personal finance blogs. I learned from others who had been in my shoes.

I would routinely google ‘pay off student loans’ or ‘pay off debt’ and I read every story I could. I also read a lot of frugal living blogs to see how I could maintain a happy life that didn’t come with an astronomical price tag. I found everything I needed to learn and to motivate me online.

What were the biggest setbacks that you faced while paying it all off?

My low income. In 2014 I made under $16,000 for the year. I just couldn’t pay off anything when I made so little money. So in 2015, my focus was on cutting expenses but also on increasing my income.

What were you doing for a living while you were paying off the debt?

Oh man. What WASN’T my job?! I didn’t and still don’t have one full-time job. Rather, I work several part-time and seasonal jobs. Over the course of 2015, I had seven different jobs!

When I was paying off my debt, I worked 25 hours a week at a nonprofit in addition to four other jobs: freelance social media work, freelance writing, catering 2-4x a week in the evenings. I also coached lacrosse from February-May.

How long did it take you to pay it off?

In total, it took me three years to pay off my loans. I paid $13,000 off from January-June 2015 though. I think it’s worth noting I’ve never made over $30,000 annually either, so it can be done on a small salary!

How did your life change once you paid it all off?

I’m using “literally” correctly when I say that LITERALLY EVERYTHING got better. Financially I was able to more than double my emergency fund, open and fully fund an IRA and save an additional $3,000.

Personally, my stress levels went down, my self-esteem got better and my belief in myself got stronger. I had set this goal for myself in January 2015 to be debt free by January 2016 and I accomplished my goal almost seven months early.

I proved to myself that I can do anything that I set my mind to. That kind of faith in myself and my abilities is the best thing to come from being debt free. It’s priceless, really.

What practical tips do you have for people looking to pay off their debt?

Ask yourself what is necessary and what’s not. Be brutal in this assessment. Debt holds you back in a myriad of ways, and the best thing you can do for yourself and your future is to get out of it!

The things that made the biggest difference for me was cutting back on costs and making more frequent payments to beat the interest. I made 3-6 payments each month on my debt. My interest accrued daily so if I made a payment on a Monday and another one on Friday it meant there was less time for the interest to grow.

So my payment made more of an effect on my actual balance. I would really recommend doing this. Even if it’s just $50 it makes a difference!

Also, buy food in bulk, buy off brand, use coupons, cook at home, eat leftovers and never turn down free food. Use what’s free around you. I got free sneakers and food from my coaching gig. Use the library. Walk or bike more. Trade instead of buying. There are a million ways to save money. Find the best ones for your lifestyle and commit to them.

To learn more about Kara and her journey to debt freedom, you can head over to her blog, From Frugal to Free. 

Want to pay your debt off quickly? Here are some things you can do:

Find out exactly how much you owe – Check out Credit Sesame which will give you your credit score almost instantly for free along with the details of your credit report

Online surveys – You can get paid for taking surveys online in your spare time. Three of the most reputable companies to check out are Survey Junkie, Panel Payday, and Swagbucks.

If you sign up for all three, then you can get more survey opportunities and make even more money.

Save money with little thought required – There is a free tool called Trim which will cancel your unused subscriptions, find you cash back, and renegotiate your bills for you.

Shop your auto insurance – When was the last time you did this? You could be paying more and not even know it. Check out Esurance and get a quote within minutes to see how much money you can save on your car insurance.


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19 COMMENTS

19 responses to “How I Paid Off $25,302 of Student Debt on a Smaller Income”

  1. Joe says:

    What a wonderful story of getting yourself out of debt. I am impressed with everything you were able to accomplish with being very intentional with your dollars so you could get the most out of each of them and reach the bigger goal of being out of debt. Also, the ability to build some savings so you were not on the razor edge with your finances and had something to fallback on. Keep up the great work. I also posted my story here as well about paying back my student loans in a short period of time. I was “Debt Success Story” #42. Check it out.

    • Kara says:

      Thank you! It’s amazing what you can accomplish when you start paying attention. Suddenly, even on a small income, every dollar has a purpose and nothing slips through your fingers. Congrats on paying back your loans!

  2. Eva Rabinovic says:

    Thanks, Laurie, for such a good post. From today on I am going to follow these steps toward my financial freedom. I know that I have been spending too much and I am not going in the right direction to get free of my debt. I thought that it was impossible. Now you’ve explained to me how to do it. Thanks.

    • Kara says:

      Nothing is impossible. I really believe that. If you shift your mindset and stay dedicated to your goals, I pinky promise that you’ll get there. Feel free to email me with any specific questions! from [email protected]

  3. Abigail @ipickuppennies says:

    This takes me back. When my husband and I were paying off debt, we had $3,100 a month to work with. With $700 rent and $500 insurance. Since we both have chronic health conditions, co-pays and medication took a huge bite each month too.

    Sorry that you had to hustle so hard, but it’s really impressive that you managed it.

  4. Kara says:

    Thanks for the kind words. I know how medical bills can add up, so good job to you and your husband for sticking to your debt payoff. It’s hard, but definitely not impossible, to do big things on a small budget.

  5. kym says:

    This is inspiring. I think most of us live with debt hanging over our heads and just kind of accept it. Especially if we are not earning as much as we could be. Thanks for the kick in the pants.

  6. Neville Bendiola says:

    What an inspirational story!

  7. Patrease says:

    This is an amazing story. I am trying to do the same thing with my husband, but he is so negative about it. He would rather try to move us (myself, him and our 5 kids) in with his sister. I’m not doing that. Do you have any suggestions.

    • Kara says:

      It’s all about reasonable cost cutting. Can you give up meals out for the family or shop second hand for the kids? Could you go down to one car? I got really extreme for a few months and the savings was so big that I paid off my debt 7 months earlier than my original goal!

  8. Brendan Barrett says:

    Way to go!

    I think it’s funny that you found yourself binge reading personal fiance blogs. I do that too. I also listen to a lot of podcasts and old episodes of Dave Ramsey. I call it “Going to Church,” because immersing yourself in things like that can help center you and reaffirm that you’re not the crazy one.

    Anyway, thanks for sharing!

    • Kara says:

      Thank you! Oh yes, the pf blog black hole went deep. I found it so helpful, so inspiring, and ultimately, an area of interest that I am still pursuing!

  9. Paige @ Live, Laugh, Budget says:

    Thank you for sharing your story! It is so nice to see someone overcome debt on a “smaller” income. I finally passed $30,000 in 2015 for the first time after graduating college in 2011. Between that bump in income from a new job and cutting way back on expenses I paid off the rest of my student loans in less than a year.

  10. Jerrena Brown says:

    Thanks for your story. I always hear about people getting out of debt with six figure incomes. This story has inspired me…I also have an income that’s around $30,000. I see it can actually be done. Thank you for sharing. This article gives me hope.

  11. Jenny says:

    I just recently faced my school debt and I am so scared. Your story has really opened my eyes that maybe this being debt free is possible with a small income. I am still just trying to figure out how and what I need to do to begin. But, thank you for sharing your story.

    • Deacon says:

      Jenny,
      Check out the resource page on my website. There are some forms and other info that may help you along your path to getting out of debt. Good luck!

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