I Paid Off $11K in Student Loans in 4 Years Making $15/Hour. Here’s How


As a young person, getting on top of your money lets you take control of your life.

Your best friend asked you to be in her out-of-state wedding? No problem! You got in a fender-bender? Bummer, but no problem.

And it definitely feels like successful adulting when you can write a rent check without anxiety.

Plus, nothing is quite as satisfying as paying off student loans AND still being able to pay all other bills, put food on the table and go out to celebrate.

I should know — I’ve paid off nearly half of my student loans.

I graduated in 2012 with about $24,000 in student loans, which is just about average for my class, and I’m proud to have knocked out $11,000 of that debt in less than four years.

It seems incredible when I think about it: I’m 25, live on on my own and only make $15 an hour.

My situation is average — I don’t have any unusual skills or strategic moves to help me.

So how do I do it? Budgeting.

How to Budget to Pay Off Debt

I started making a budget a few months after my loans went into repayment.

I was constantly worried I wouldn’t have enough money — partly because I didn’t know where it was going!

I knew I made enough to cover rent and my normal expenses, but adding student loan payments made me feel like I was in constant danger of not being able to pay an important bill.

Something had to change.

So, I started budgeting by following these simple steps, which I’d recommend to anyone… student loans or not.

1. Track Your Spending

For a week, a month, whatever. Track everything.

Keep a list, and add to it every time you pull out your wallet, whether it’s on a spreadsheet or a simple notepad.

Become aware of your spending habits. You need to know exactly where your money is going.

Bonus: You might decrease your spending just by being more attentive. I didn’t want to write down a $1 snack at work, so I didn’t buy it. That was one more dollar I could put towards my loans!

2. Set Some Financial Goals

Come up with a few short- or longer-term money goals, and write them down.

Maybe you want to put as much money possible each month toward your student loans, like me. Or maybe your goal is to go on a dream vacation, build a six-month emergency fund or stop living paycheck to paycheck.

My long-term goal was to fully pay off my student loans, and each month, I aimed to pay at least $50 more than the minimum payment.

3. Analyze Your Spending

Go back to your tracked expenses, and examine them.

What did you spend the most money on? Are you happy with how much you spent?

Be honest with yourself. Does your spending match your goals?

If not, it’s OK. Mine didn’t. Just acknowledge where you’re overspending and move forward.

After realizing how much I spent eating out, I said goodbye to Panera, and hello to bagged lunches.

4. Build a Budget

During extensive Googling (I may have been procrastinating), I found YNAB, or “You Need A Budget” — which I love.

But all you really need is a way to plan what you want your money to do for you, whether that’s an Excel spreadsheet, YNAB, Mint or even pen and paper. Use what’s comfortable.

First, enter how much money you have now. Not what you anticipate having, but what you have now.

Next, list where your money goes: rent, car repairs, fun money, groceries, student loan payments, retirement savings, etc. It can be as detailed or simple as you want.

And don’t forget an emergency fund! (Says the girl who had an unexpected root canal. Ouch.)

Here’s a more in-depth guide to creating a budget.

5. Give Every Dollar a Job

This is a YNAB mantra: Make sure to budget all of your income. Every. Last. Cent.

Your monthly bills are straightforward. And by looking at your list from step one, you can anticipate how much you’re going to spend on groceries and restaurants.

But the real trick is planning for less common expenditures, like car registration.

You’ll eventually use every dollar you have, so plan for it. Prioritize your categories, and make sure every time you get paid, you give all those dollars a job.

6. Be Vigilant with Your Spending

Record every transaction.

The list you started with was good practice, but now you have to make it a habit. Making a budgets is relatively easy, but it’s not a “set it and forget it” deal.

Check your categories to see how much money you have available before shopping or going out.

Recently, I bought several T-shirts at Target. I hadn’t planned on it, but I looked at my budget, saw I had enough money in my clothing category to cover the cost and went for it. Guilt-free impulse buying for the win!

If you go over your budget by a few dollars here and there, it’s fine. Pull money from a different category, and learn from it.

I adjust something pretty much every month. Recently, I had to pull some money from my grocery category and put it into my household goods category because I ran out of toilet paper, paper towels and Clorox wipes all at the same time. Whoops!

7. Be Realistic

A budget is not set in stone. Setting realistic expectations is the secret to successful finances.

You know you. If you know you’ll want to splurge on certain things, don’t stress. Instead, build it into your budget.

I set aside enough money to go to two movies every month. It removes the guilt and makes it easier to stick to my plan. I don’t feel like I’m missing out, and I’m still putting as much as possible towards my loans.

Being realistic is the only way to make your budget stick.

What Will Your Budget Help You Achieve?

Budgeting is simpler than you think, and it helps you achieve your financial goals much faster.

Realizing I’d about halved my student loan debt in less than four years was an amazing feeling!

You probably won’t always perfectly stick to your monthly budget, but it’s OK. Just adjust as needed.

But make sure you’re only spending money you already have, even if it’s tempting to pull out your credit card.

You have the power to take control of your money. All you have to do now is start.

Your Turn: Do you set a monthly budget? How do you manage your money?

Emily Wynn is a young professional passionate about helping her peers figure out their money. Often, personal finance seem overwhelming, but she’s on a mission to show it’s not.