Paying Off Debt When You Make Peanuts

Today we have a guest post from Kara. She’s here to tell you how she’s managing to pay off her debt despite a very low income.

I make almost no money. I made $22,253 this year and will make around $23,000 next year. I have 4 part-time jobs that add up to this sad little number. But I have made it my mission to pay off my student loan balance of $13,291 in the next 14 months.

My story is a simple one: I hate sending money to my debt each month. It’s absolutely maddening to watch chunks of your paycheck disappear into the black hole of debt. Especially since it’s student loan debt. College was supposed to make me money, not suck me dry!

Since I make so little money, each expense stands out. In the last few months I have made drastic life changes and thus I’ve also made major headway on my loans. I am committed to maintaining my dedication throughout 2015. But how much impact can I really make when I make so little money?

It comes down to one thing: knowing when to say ‘no’ and when to say ‘yes’. I say no a LOT of different things.

When my friends go to $16 brunch Sunday morning, I sleep in.

When my family draws names for Secret Santa gifts (you must spend a minimum of $75 on your person!), I opt out.

Any birthday or Christmas money I get doesn’t go to a new dress or a dinner out – it goes to my loans.

Nothing saves you money like simply not spending. And I have turned not spending into an art.

Luckily, free is all around us. I eat left overs from the catering company I work for and don’t spend money on groceries or eating out anymore.

I run and hike outdoors and don’t pay for a gym.

I don’t buy clothes anymore but host clothing swaps with friends.

I attend free events around my city – live music at parks, bars, and event venues are often free during certain hours.

Businesses also frequently host promotional events with free food, drinks and entertainment and you better believe I hit them up.

I can’t remember the last time I went to the mall, and I put myself on a 6 month Target ban.

I walk instead of driving.

I gave up buying drinks at bars or coffee shops, and I haven’t seen a movie in theaters in months.

I also don’t use cash because it’s too easy to spend.

‘No’ has become my mantra.

But I say ‘yes’ to making extra payments on my loans each month. I say ‘yes’ to being debt free!

I have re-allocated the money I used to spend on drinks, clothes, and going out to my loans. In the last three months I have paid off $3,746. I have a $2,000 emergency fund and $900 in regular savings.

I say ‘yes’ to my side hustles and ‘yes’ to being a healthy financial adult. For me, the ‘no’s in my life are not big deals. I can (and am) living happily without my old expenses.

Being debt free is a dream I have been chasing down since I graduated. Finally reaching that goal will taste better than a $16 Sunday brunch ever could!

Kara Perez is a social media worker and writer in Austin, Texas. She writes about women in media and her journey to being debt free at

Rockstar Finance

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Around here, we’re all about taking our debt and beating it down. Grrrrrrrr! We pay $5 for every awesome debt story we publish (whether you’re in debt, out of it, or barely living to tell the tale) so send yours our way to be considered: reddebtedstepchild[at]gmail[dot]com!
About Kayla

Kayla is a mid-20s single girl living in the Midwest, USA. She is focused on paying off her consumer and student loans, while simplifying her life and closet. You can join her on her journey at ShoeaholicNoMore or follow her on Twitter.


  1. Keep it up Kara! It’ll be worth it!

  2. Stellar job, Kara. You’re an inspiration! 🙂

  3. Story of my life! I’m looking to pick up tax preparation work starting in January – and you better believe every penny of it is going to go to debt!

    • It’s frustrating at times to direct every extra penny towards debt but I focus on the freedom that will come being debt free!

  4. Sounds like you have a great plan and a great goal in place! Good luck!

  5. Damn Kara, that’s AWESOME! I make a little bit more money than you, but paying off my even bigger debt load won’t be happening any time soon 🙁 I sacrifice a lot, but I could be doing more. I think that my fixed expenses (ie: housing and car) are higher than then should be, and that’s a big factor for what’s holding me back. I really gotta step up my side hustling and use all of that money to become debt free soon!

    • Thanks Amanda! Appreciate it. I found once paying off my debt become my be-all-end-all, I was more than happy to refocus my spending habits. Good luck!

  6. You’re doing great Kara! That $13k will be gone in no time. Good Luck!

  7. You’re doing awesome Kara! I’m a teacher and make the same amount as you (after taxes and before side hustles), so I completely understand where you’re coming from. I love all the things you pointed out that can save money. I get money for my birthday and Christmas every year and use it towards ‘fun things’ so I don’t technically spend anything out of pocket.

    • Thanks Alexis! Wouldn’t it be nice to bring home just a little bit more? But using your birthday and Christmas money is a great way to pay your bills and still have some fun!

  8. I do almost all of these, but eating out is my weakness.

    • It’s so easy to do! I think eating out with friends can sometimes get a pass but try bringing lunch to work. Or if you must eat out, pass on meat options. Vegetarian things are always cheaper!

  9. Awesome job! I love stories like this! I make a little bit more, but not by much, and have paid off 10k this year. It IS possible to pay off debt on a low salary. It just means shifting priorities.

    • Shifting priorities is exactly right! It just takes some readjustment. And it’s mostly temporary- once the debt is gone you can relax a little on the fun budget!

  10. This is clearly not a lifestyle to last too long, but it’s a great way to maximize saving and paying off debt. While we don;t need to do this, we still don;t shop for clothing too often, won’t go out etc. So, after you’d have paid off your debt, you’ll probably be able to keep some of these frugal methods and get back to spending on the things that do matter for you and make your life good. Anyway … I totally admire your drive and am sure you’ll get there soon 🙂

  11. The military pays up to $80,000 in the student loan repayment program. Just a thought.

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