How I Paid Off $28K in Student Loans in 3 Years While Making $30K a Year

How I paid off my student loans
Photo courtesy of Zina Kumok
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A character in the Shopaholic series from Sophie Kinsella tells the main character, who’s up to her eyeballs in credit card debt, she can either spend less or make more money.

Most people try to spend less. So many financial books and blogs (even mine) focus on cutting your expenses. But the biggest thing I realized while paying off my debt was that spending less wasn’t enough.

If you’re only making $28,000 a year, you can only cut so much before you reach your breaking point. That’s when the amount of money you could save becomes less valuable than what you’re buying with it.

If You Can’t Spend Less, Make More Money

I was paying $550 a month for my apartment, I was driving six hours every weekend to see my boyfriend (and paying $300 for gas) and I was contributing $250 to my savings account every month, trying to build up an emergency fund.

At one point, when I was going on vacation for 10 days, I called my Internet provider and asked if I could disconnect the service while I was out. At that time, I was putting $10 extra a month toward my debt, which was enough to knock off one year’s worth of payments. But paying off my student loans in nine years versus 10 wasn’t enough.

That’s when I realized that spending less couldn’t be my only plan. I had to find a way to make more money.

Due to my schedule, a part-time job was out of the question. I was working as a journalist, and the random hours of my job made it impossible to find a second gig.

I decided to start putting any extra money toward my loans. When I visited my grandma and she handed me a check, I added it to my monthly student loan payment. If I had a freelance gig, I put all that money toward my loans. If I got a hefty tax refund, I put that toward my loans.

To keep myself from going crazy, I usually kept about 10% of everything I earned and used that as a small splurge. That way, I could still celebrate without forgetting my goal.

Get a Raise? Put It Toward Your Debt

A year after my first job, I moved to the city where my boyfriend lived. My new gig came with a slight pay increase, and I no longer had to fill up a tank of gas every week. I added my new savings toward my loans and suddenly I was more than doubling my monthly payment.

It was at that point that I wanted to see how quickly I could pay off my debt. If $10 a month shaved off a whole year, how much would $400 do? I set myself a goal of paying off student loans within three years of graduation.

When my lease ended, I moved in with my boyfriend and a mutual friend. Having roommates for the first time since college meant even lower living expenses. We chose a cheap duplex, and my rent only cost 14% of my take-home pay. You can probably guess where I put the rest of my money.

While I was paying off my loans, I also found other ways to save. I clipped coupons and bought items on sale, I discovered Goodwill and other thrift stores and I always researched an item before I bought it.

A little more than a year after that move, I made my last student loan payment — three years after my first.

How Much You Make Matters Less Than What You Do With It

Throughout this journey, I learned that how much you make doesn’t matter as what you do with it. I know people who make double than I do that have more debt and fewer savings. I know people who make more who travel less. I know people who live on six figures and feel broke.

Even though I still have yet to make much more than $30,000, I don’t feel poor. I can buy everything I need and most things that I want.

Make the most of your salary by figuring out what truly makes you happy and how to save money on the rest. I love to travel, so I don’t scimp there. I use credit card bonuses to buy flights at a discount, and I stay at Airbnb to save money. Traveling is expensive, but I’d rather go to a new country than buy nice purses or hit up the bars. So I skip those.

No matter how much I earn, I still have habits that I developed over the last three years to carry me through.

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Zina Kumok writes about paying off $28,000 worth of student loans in three years at Debt Free After Three. She has been featured in DailyWorth, LifeHacker and Time.