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How to Pay Off Your Student Loans on Any Budget

Even if you’re in a low-income situation, there are steps you can take to pay off your student loans faster. It all starts with getting organized and creating a budget—but don’t worry. It’s not as scary as it sounds. And if you’re someone who enjoys mapping things out and creating plans, budgeting can be extremely satisfying. It can also assuage any anxiety you might have about the state of your financials.

Let’s get started.


Get Organized and Map Out Your Budget

Paying off your student loan debt starts with better spending and money management habits. A good way to ease yourself into these good habits is to create a budget.

Start by calculating your monthly income after taxes—or what ends up being deposited in your bank account. Then, write down all of your recurring monthly expenses. That could include:

  • A mortgage
  • Rent
  • Car payments
  • Insurance
  • Student loans

Those are your must-pays. Subtract that total from your monthly income amount. The difference is the amount you have left to spend on necessities—like groceries and gas—and anything else. This should give you a pretty good idea of what you’re working with each month.


Set Realistic Goals for Yourself

If you have $50k in student loan debt, paying it off in a year on a $45k salary isn’t necessarily realistic, and you might be setting yourself up for disappointment if you don’t reach that goal. Instead, start smaller.

You could set your goal at paying off $10k in one year. Or your goal could be paying off an extra $800 per month. Once you hit one goal, acknowledge your success and focus on the next one!


Choose the Strategy That’s Best for You

If you have a smaller budget to work with, you can still be taking big steps toward your goal. Two popular strategies are the snowball method and the avalanche method.

Snowball Method

With the snowball method, you focus on paying down the debt with the lowest balance first, while making at least the minimum payments on your other debt. Any extra money you have should go toward that debt with the lowest balance. Once it’s paid off, you take the amount you were paying into it and apply it to your debt with the next lowest balance. When that one’s paid off, you repeat the process until all of your debt is gone.

Avalanche Method

This method is very similar to the snowball method. The difference is that you’ll focus on the debt with the highest interest rate first. This can help save you money in the long run, because you’ll be paying less in interest. If you have a lower income, use this strategy.


Cut Your Expenses and Practice Frugality
The easiest way to do this is by cutting out unnecessary spending. Those unnecessary expenses might include:

  • Getting fast food meals and eating out
  • Buying expensive clothes and shoes you don’t need
  • Making impulse purchases and online shopping
  • Choosing name-brand items instead of generic items
  • Subscribing to monthly services

Cut what you can, and focus on taking advantage of sales and discounts for the items you need. You could also try lowering your insurance premiums or refinancing your debt to lower your interest rates.


Do What You Can to Bring in More Money

You can make a bigger dent in your debt if you find a way to bring in a little extra money each month. It could mean asking for a raise, finding a higher-paying job, or picking up a side hustle. You could try:

  • Freelance writing
  • Virtual assistant work
  • Driving for Uber or Lyft
  • Tutoring
  • Babysitting or nannying
  • Dog walking
  • Photography

You could also try selling your old clothes or books online for a little extra cash.


All It Takes Is Time

While it might feel impossible now, paying off your student loans is doable. You just need to have a clear picture of your budget and focus on making your payments on time using either the snowball method or the avalanche method.


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