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

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.