10 Lessons I learned While Paying off $20,000 of My Student Debt in Less Than 2 Years Earning Just Above Minimum Wage

If you’re like me, you never saw yourself getting into debt as it happened. It was like quick sand, one minute you’re fine and managing to stay a float and the next minute you’re up to your eye balls in it, and it’s suffocating you. If you’re there right now, I want to assure you, there is a way out. In the next few dozen sentences I’m going to  share with you the 10 things you and I didn’t learn in school about money, debt, investing, and how I used these strategies and tactics to pay off well over $20k of student loan debt in less than 2 years earning just above minimum wage.

Here are screen shots of my student loans debts and credit card debts. 

Perkins Loan Screenshot
$3600 5% loan from federal government (above)

Student Loan Federal
The other Student Loan: Various interest rates from 3.5% to 7% interest (above).


USBank CC Screen Shot
The credit card I got right out of college was at a 7.99% interest rate and I ended up spending and having to pay a balance of $2,156 (above).


This being said, it’s better to avoid buying on credit when you don’t have the money to repay it immediately. Don’t listen to people who tell you that it will ‘free up capital’. Unless that expense will earn you money then it won’t free up any capital for you, only for your creditors…

Avoid the Debt Trap…

Which leads me to my next point, avoiding the debt trap like the Black Plague.

Never get into debt in the first place is the best way to avoid paying the high interest rates that usually come with debt. If I had that advice when I was first getting out of high school I wouldn’t have gone to that fancy college I went to or have spent the summers traveling on borrowed money.

If I had known that it will take twice as long to pay back that money AND make the same investments as my peers who didn’t borrow to go to school I wouldn’t have done it. I would have worked each and every summer and have go to a trade school that would have allowed me to get paid as soon as I got out of school and started investing from day one.

But alas, hindsight is 20/20, we learn through our mistakes and I learned that investing and asset development is the only way to financial freedom.

Instead of taking out a loan I recommend anyone pursuing higher education to find scholarships, grants, work during school and summers to pay for expenses, use no interest loans from family members, and keep debt to a minimum.

The less you have when you graduate the faster you can become a millionaire… And yes, it is possible to become a millionaire even on the most modest salaries. If you don’t believe me then you can look at Andrew Hallam’s book The Millionaire Teacher and his website http://andrewhallam.com where he writes about how he got to millionaire status by the age of 30 on a teachers salary.

You absolutely need to Build a budget…

It’s important to know where your money is going and where you are trying to direct it. I think it was Dave Ramsey who said that if you don’t know where your money is going then you won’t know where your money went.

“A Fool And His Money Are Soon Parted”

– someone 460 years ago-

Once I started making a budget each month, I soon saw areas where I could cut spending and re-invest the savings into faster repayment of my loans. This accelerated the payback process and caused the repayment to begin to snowball. Just like ripping off a bandaid feels less painful when you rip it off fast, so does debt and the benefit is that you can begin redirecting that money into investments sooner.

Most people start out with a pen and paper, then move to writing an excel document to track their income and expenses, then a money aggrigator like mint.com or personalcapital.com,  and then eventually graduate to a budgeting software like youneedabudget.com or Debtinator

Any one of these is a good place to start, and if you don’t already have a foundation in budgeting then just start with writing down all you expenses and your income each month. Here’s a template that I used for the first year of repaying back my debt and getting my finances under control.

Simple Budget_copy

Any extra money that you don’t have allocated to a particular budget (ie. groceries, rent, internet, gas, insurance) you can direct towards your loan and debt repayment. The goal is to pay off the highest interest rate loan first then roll the excess payment into your next highest loan until all your loans are paid off. The faster you do this the sooner you will begin investing and the more money you will make in the long run. 

Here’s a screen shot of how compound interest works (investing over the long run).

Screen Shot 2018-01-25 at 9.22.17 AM

Compounding interest: the earlier you start the more money you will be paid out on your investments. 

It doesn’t matter when you start, the important thing is to start. And the sooner you can pay off all your debt that is higher than 1% the sooner you will be able to begin investing and becoming truly wealthy. 

Get An Emergency Fund Together TODAY:

Save at Least $1000 and Then NEVER Spend It! This is called an emergency fund and you absolutely need one. It’s not there just to make you feel comfortable, it’s there to come between you and emergencies!

Things that you will not be using it for include: buying new clothes, new tires for the car, or a bunch of crap to clutter up your house.

This is a brick wall protecting you from catastrophy, like a storm wall, once it’s up it will be there for years and you don’t have to do anything to it except not touch it.

You won’t have to add money to it, to protect it, to water it, to re-plaster it. It just sits there, and you do nothing with it.

Once you have your Emergency fund up you will be able to rest easy each month and know that your budget can be balanced at $0 and you will still have money set aside for true emergencies (unforeseen medical expenses, your car motor goes, you lose your job, etc).

Get a Room Mate to Minimize Apartment Expenses…

All 4 years of college I had a room mate, even when I was in Hong Kong. I moved back home to live with my dad while I figured out how to earn a good income, eventually starting my own business, and that saved me tons of money on rental payments and house payments.

My advice to anyone not starting out with a trust fund and a hearty investment account out the gate is to rent the lowest cost apartment you can. Avoid places that are older than 20 years, and avoid bad neighborhoods with lots of police reports. You don’t want to put yourself in danger just to payback your loans. And definitely inspect the place for roaches…I’ve had that before and they are a pain to get rid of…

Keep utilities use to a minimum by showering at your company gym and building a fire in the winter and layer your bed with warm blankets you bought at the local thrift store. Which leads me to my next point…

Buy Gently Used Clothes and Shoes at Thrift Stores or Not at All…

I didn’t buy new clothes for the first 2 years out of college. I bought a suit once for a friends wedding and that was it.

I honestly wouldn’t buy clothes unless I needed it for a work function or a special event like a wedding. And if I did need clothes I shopped first at a second hand store to get what I needed. If I still couldn’t find what I needed then I would shop at a nearby budget store like Walmart or target (when they have coupons or sales).

I also practiced minimalism by having just black and white shirts in my wardrobe, 2 Pairs of shoes (a pair of brown leather dress shoes, and a pair of black Nikes), and just 2 pairs of Jeans. Of course I had workout clothes but all together I own maybe 10 shirts and 4 pairs of pants, along with 12 pairs of socks and 5-7 pairs of underwear.

Not buying clothes each and every week has probably saved over $2000 since I began paying back my loans.

Reduce your Auto Expense: Downsize your Car. Ride a bike, the bus, or share a ride…

Firstly, selling your expensive car or lease and getting a used Japanese car will save you tons of money you can apply directly to payments or to your investments. I Shoot for under $5k, with under 100k miles, original paint, and something that you can buy cash. Drive it for 2-3 years (20-30k miles) and then sell it for $3-5k and then roll that back into another care and do it again.

This one trick alone will save you thousands and will help you to invest sooner and thus reach that live savings goal sooner too.

Now, if you don’t even have $2,000 to put down on a car it may not be as easy as it sounds but it is certainly do able.

Even if you live in the United States, which has some of the worst public transit systems for a first world country in the world, it is still possible to minimize your transit expenses and maximize savings to pay off debt or save faster for investing.

You can invest in a good used bike with a solid chain with minimal wear from a retail store, thrift store, or even at a garage sale. I got mine as a hand me down bike from my mom’s old cyclocross days and I’ve seen at least a dozen good condition bikes at the thrift stores that I’ve patronized in the past 2 years.

You don’t have to do this but I chose to ride it everyday to work on any day when it’s above 32 Fahrenheit.

You can also share a car with your room mate or a significant other, and save money on a car payment.

With all theses savings you can apply the difference directly to your loan repayments or investments. 

Create a List When Shopping…

One of the best ways to cut down your food costs is to set a monthly spending budget and to stick to it.

When I first started out I had a $183 personal shopping budget for groceries. I would write down a list of everything that I need for the week and shop only once. I still do that, but my grocery budget has grown a bit since I began eating healthier.

This exercise forces us to stick to what we need and not what we want at the time. I would also recommend eating something before going to the grocery store. Hungry shopping makes for bigger grocery bills.

Writing down a list of items you need in the grocery store will also help you to save time while shopping, or you can try having a personal shopper do the shopping for you once you have eliminated debt and you have more valuable ways of spending your time (aka you make more money per hour doing that higher value activity than it costs you to pay someone to do your shopping).

Make Yourself Employable…

Get a hair cut, say yes sir, yes ma’am and smile when you’re at work actually get your job done. They are paying you to accomplish your work, not sit there.

If you were hiring someone to get a painting job done or to finish the roof on your house would you want to see them sitting around doing nothing or rather trying to accomplish the work as quickly as possible, safely?

Do a good job and you will be rewarded with dividends.

I worked some really crappy jobs in and out of college.

I’ve been a waiter, a burger flipper, scrubbed toilets, flown a desk for a number of years, sold home appliances on the road, sold advertising over the phone to people who slam the phone on you, and I’ve worked door to door sales driving all over town.

The thing that hasn’t changed in any of these roles is the fact that people pay you when they receive value. If you do a good job in those roles and you deliver real results, consistently, you WILL be noticed and you WILL be given more responsibility.

Having your budget set and your investing in alignment will mean that you will eventually not need to work any of those jobs, unless you truly enjoy them, but for now we MUST work a job to reach our financial goals.

Or, find another way of bringing value such as starting your own business.

Which leads me to my next point…

Why Not Start Your Own Business?

This is never as easy as bloggers and online advertising makes it seem; however, it is totally possible to start your own business and change your financial future.

The biggest advice I can give you is don’t listen to big ticket courses or fancy talk about being able to own a business where you don’t have to do any work. This is a sleazy sale technique that marketers with no scruples will try and use to get you to buy their overpriced courses.

The truth is, you have to have some sort of valuable skill or process that can be sold or marketed. House cleaning, is a skill which can be sold and marketed.

Writing valuable sales copy is a skill, which can be sold or marketed.

Analytics. Accounting. Contracting. Writing. These are all skills. Heck, teaching is a skill as well.

Some of the best advice I have every gotten on the subject of “where to start” was to start where you have knowledge. If you’re a nanny, start with that, focus on writing, educating, and training other people on how to be a better nanny.

If you are a 16 year old kid with a lawn mower, why not start there? If you’ve been keeping the books for a big company 9-5 why not then start keeping the books for some of your family or local businesses around town who could use some help on the weekends.

If you are offering a valuable service that people need and are willing to pay for then they will beat a path to your door. Start by simply telling people about what you do. Post your occupation on facebook and reach out to your network and let them know that you are starting a business in X.

I wouldn’t go for MLM’s unless you really want to learn sales and marketing and you are comfortable with a high turnover sales force that you have to constantly be training.

Dave Ramsey goes over a lot more of these concepts in his best selling book “EntreLeadership: 20 Years of Practical Business Wisdom from the Trenches”

Start a blog…

Something like this where you can share with other people what you know, refer a few products to your readers and earn a little affiliate commission each month.You can start out with a free service like Blogger.com, WordPress.com, or even Instagram, Facebook, Pinterest or Tumblr.

If you are ready to commit to starting, and running a blog full time, then you can head over to Blue Host, Host Gator, Name Cheap or GoDaddy and setup a Domain name and WordPress managed site that will host all your content.

The benefit to having your own managed site is that you can start marketing and advertising from day one, rather than having WordPress ads on your site or the branding of the blog host on your site (usually found at the bottom of the page). This option is good if you have an existing business that you wish to transition online from day one.

If you are brand new to running your own business, don’t have a lot of working capital to invest, or aren’t sure where to start, consider setting up a free WordPress or blog and just start writing and sharing content. Be sure to link to your other social media and don’t have expectations of replacing your income in year one.

Point is, this doesn’t require a sizable investment of $300+ and you are only required to put in the time and work. I know many people earning a couple hundred dollars each month from their blogs and a few that are making a full time income ($40 – 70k a year) from their blog or site who started virtually free

You don’t need $10,000+ dollars to invest anymore to start an online business. You just need to constantly be learning and growing, and if you are starting with little capital to invest then you must put in sweat equity.

If you don’t have experience in SEO (optimizing how your site comes up in the search engines), web design, or online marketing then you can either buy a bunch of courses or look for something all in one like what SBI offers. For anyone who is looking for a crash course in how to design websites that earn you an income, not just pretty sites that don’t work, I suggest taking the SBI course. The goal with SBI is to get a profitable site up that provides value to your customers and the search engines (such as google) rank extremely high.

A good example is raw-food-health.net. Andrew Perlot started as a journalist who also enjoyed raw foods and who’s health benefitted greatly from taking on a raw food diet. Andrew’s site is now one of the top ranking authorities on raw food and health.

If you are serious about starting an online business then SBI is a very good course for your to learn everything you need all for one low price. (insert affiliate link).

Leverage Affiliate Marketing To Earn Residual Income…

The one component that you will need to have in order to make a website work and make a small to very large income, is some type of offer. You will need to offer something of value that your readers can buy. This can come in the form of your own products, affiliate products that you market for others, or even trainings and content that you sell.

One of the quickest ways to begin earning an income online from a site, blog or any other marketing medium (facebook, email, text, blog) is to sign up for free affiliate marketing programs that pay a commission upon referral. The important thing here is to make sure that your offers align with your audience.

In otherwords, know your audience. Avoid marketing sewing machines to people reading your article on personal finance unless you know that your audience is mostly people who enjoy sewing machines. Instead, try writing a site about sewin as a hobby and then marketing that low, medium, and premium sewing machine to those customers. If you imagine your site or your online presence like a store, a physical store, what type of a store is it? An arts and crafts store? A Thrift store? An electronics store? Sports and out doors?

If your customer walked into your sports and outdoor store and found cooking supplies for their home kitchen do you think they would be inclined to buy? Probably not. If they walked into a CPA firm trying to get their taxes for their business done would they want to know about sporting goods? No.

So be mindful of who is reading your content, aka what you are writing towards, and then offer them goods and services in alignment with that content. Likewise if you have an online store (such as Shopify or wix commerce) and you sell motorcycle helmets then write content for that audience that applies to the goods you are selling and the sport that you are catering to. Your audience is motorcyclist, not stay at home moms. Do some of them ride motorcycles? Sure! It’s possible, but do MOST of them? No.

So keep it relevant for your audience.

Now, If you aren’t aware of affiliate programs and what they pay out then just simply do a google search for “affiliate program ________” and you should land a few good ones.

Here are just a couple programs out there that you can get started with today:

Amazon Associates – https://affiliate-program.amazon.com/home

Rakuten – https://www.rakuten.com/

Commission junction – http://www.cj.com/

These are just a few more notable ones. I also have relationships with other bloggers, site owners, and travel sites that I personally use and recommend to friends and readers alike, check out the trusted partners page to learn more.

Turn Pennys Into Hundred Dollar Bills Garage Sale-in’…

This is one of my favorites. You can get on eBay and Amazon for free and start using their FREE seller apps right now to make money selling things you find around your home and at local garage sales, estate sales, and book stores for sometimes big money.

Here’s a screen shot of one of my accounts and the profit that I made on just 4 items my girlfriend and I found garage sale-in’:

  Screen shot of one of my accounts and the sales of a knife, book, computer game, and another book.

As you can see, you can start with very little upfront capital and start earning income on the side this weekend scanning and searching for books (which can be bought in any condition and resold),  gently used electronics (such as old television sets and VCR units), and open boxed toys that just need to be resealed.

If you aren’t sure where to start with books check out the proven book sourcing course at provenbooksourcing.com. It’s a very simple but effective course that teaches you everything you need to know how to buy books and flip them on amazon for a very good profit. By the end of the course you will be able to profitably scan books and flip them online for a very decent profit. Go to provenbooksourcing.com to learn more.

Most other items you find at garage sales and estate sales can be resold in new condition. If the box was opened and the item was never been opened then you can take that home, reseal the box and send it in to Amazon to sell it, usuallyfor a great profit.

For one of the best resources I know for selling online check out the Proven Amazon Course.

Learning to sell online will require you to learn a bit more about how to actually evaluate certain things, but start out with something you know.  I started with used  electronics and books. I’ve found used iPhone’s at garage sales for $10 and sold themonline for hundreds of dollars. I’ve also bought used stereo equipment for less than $50 and sold for over $400, to date I still have 3 peices of equipment that needs to sell but after fees and expenses we’re looking at 300-400$ profit.

If you’re really looking to shorten the learning curve and start making a profit as soon as possible then I’d invest in the one course that has everything you need to succeed online, Proven Amazon Course. You can start out with just the proven book sourcing course or any of the other courses but the Proven Amazon Course has one of the best track records of success and is constantly updated with new content each time Jim or one of his Students creates a new course.

If you just sell 5 or 10 of the items I mentioned above each month, it won’t be long till you’ve repaid your investment and soon enough you’ll be socking away an extra $300-800 a month into your debt, savings or investments.

In Conclusion

Using these strategies I was able to pay off well over $20,000 in student loans even though my rent rate went up, my job income started at only $10 bucks an hour and I was over $30,000 in debt. If I can do it, so can you.

I hope that some of these strategies truly help you and that you find them to be profitable and beneficial for your financial life. For some of us the pathway to financial freedom is a short one that is a fairly easy path to walk, for others (myself included) it’s a multiyear process with some bumps along the way and some bruises.

If you are down on your luck right now or struggling with the process then know that you are not alone. There is help. You just have to know where to reach out to get it. I’ve included some resources in the “resource tab” of the site if you are struggling with getting your finances straight or are struggling in life in particular.

P.s. If you are serious about starting an online business and looking for a really good course that teaches how to do that and more then I highly recommend the Proven Amazon Course. The money that you invest will easily pay itself back in the first week of sales. You can learn more about the course and all the value that it has provided it’s customers here: Proven Amazon Course.


    1. You’re absolutely right David. I only wish I had heard it earlier in life. However I have to thank a close friend of mine for sharing this with me who actually saved me from continuing on the same path I was on of debt and remorse. I’m glad that I learned about these principles now rather than much later in life.


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