How Do You Pay Off Debt On Low Salary

Many people ask me how I pay off so much debt on such a low salary. Sometimes it baffles me too, but I figure that I would share some numbers with you, to help illuminate how I can do it.

I don’t talk about budgets that often here and there is a reason. I don’t love budgets. Budgets may be sexy, but sometimes they are hard to commit to and feel restricting.

I prefer to have a “spending plan” as other bloggers have called it, which focuses on my main goal of putting money towards my emergency fund and debt, while living on a minimal salary.

Here are my main expenses each month:

$450 for rent and utilities (my half — electricity, internet, gas, (water is included in rent)– could increase to $500 in winter)

$218 for health insurance

$300 for groceries and restaurants (it’s been higher at points too — my bad area. I consider eating out my entertainment)

$0 – $30 Transportation (only if I need to take the bus somewhere because it’s gross out — but I tend to bike or walk everywhere)

That’s it. For full disclosure, my mom pays for my phone. I’ve tried for years to pay, but since we are on a family plan, they insist I am saving them money by being on their plan. I also have the cheapest, most basic Samsung around and don’t really use data — because hello, I’m at home most of the time! I am sure this will change at some point soon.

I thought I’d share that because I believe in transparency — I always find it annoying when I read someone who pays $4,000 per month to debt and only later do you find out they live at home with their parents, or are making $100,000 per year. It’s important to look at the context of the situation.  We all have our own financial privileges, which need to be taken into consideration.

I don’t buy clothes or cosmetics. I don’t have a gym membership or a car. I don’t really buy gifts. I don’t have kids or pets. My expenses are pretty minimal, which is how I can pay off debt on a low salary. This is how I’ve been able to pay off over $30,000 in debt in 3+ years, making that amount of money, or much less.

Let’s say that after taxes I make $2,000 a month (this of course fluctuates and I’m hoping to make much more soon, but this is a reasonable number to work with).

My basic expenses are about $1,000, leaving me with another $1,000 to put to debt, EF, and savings.

A few years ago, when I first moved to Portland, I brought home $800 a month. How did I do it then? I was on a food stamps and decided to go without health insurance, so then my basic expenses were around $500. I also side hustled a lot to help that number.

A few months later, I got a “better” paying temp job making $12/hr. I was bringing home $1320 a month. I was now ineligible for food stamps, but still went without insurance.

During both of these times when I was low-income, I was able to pay off debt because:

Hopefully that gives you some context on how I’m able to do it. Now that I’m freelance, I won’t touch my savings. So now, my main priority is to make more money, which I have been doing month after month since being freelance. In the next year, I want to double my income. I know that is ambitious, but I can will do it.

It’s important to note that this is “my half” of the budget. My partner and I do not have joint finances. I just included my basics at the top, because those don’t change. With what is left over, I put nearly everything to debt and some to savings.

My spending plan helps me reach my goals — living on less, so I can put as much as possible to my debt.

Let me know if you have any questions — I don’t think I missed anything. But feel free to ask away!

p.s. If you want to hear about me being on food stamps, walking invisible dogs, side hustling, and fake laughs, then check out my girl Shannon’s podcast.

This post is in: budget, debt

I recently had the pleasure of reading Shannon’s (aka Financially Blonde) book, Train Your Way to Financial Fitness. I was so excited to read it as I’ve been a fan of Shannon’s for a long time — and now I can officially call her a friend.

Shannon is so likeable and personable – and she really wants to help people too. In the book, she recalls feeling restricted in her old job where she had to manage clients who had a certain amount of wealth. After realizing there’s a whole group of people (raises hand) that aren’t wealthy, but desperately need financial guidance, she decided to go out on her own and help people of all financial backgrounds. And that is why she rocks.

So, who is this book for?

The book is a great guide for people looking to assess their financial fitness. It’s jam-packed with personal stories, including Shannon revealing her struggle with her weight a few years back, as well as actionable tips to help you overcome your budget woes.

The best part of the book? There is a quiz to help determine if you are financially fit, financially skinny, or financially fat. Don’t worry, you can’t fail!

Where do I end up? Well, I’m financially skinny. I’m doing alright, and in Shannon’s words, this is where most people are at, but I could be doing better. I’m not saving enough and my retirement is at laughable levels.

In the book, Shannon describes financially skinny people like myself: “At first, you were probably excited to see your type; after all, who doesn’t want to be skinny? From a financial perspective, though, Skinny people have a number of challenges. I call this type “Skinny” because you liter­ally live paycheck to paycheck, and you are barely getting by financially. Just as it is not good for your body to be deprived of food, it is not good to deprive your bank account of cash. You have a difficult time saving and getting ahead because of various challenges in your financial life.”

Um, hello student loans! You suck!

Anyway, I loved the metaphor between financial wealth and physical health. They both require a lot of care and maintenance – and it’s important to find balance.

I have never been very good at balance. I’m a highly emotional creature and this book has reminded me of some of my spending triggers that I need to be aware of, so that I can stay on track and rock my budget.

I highly recommend the book for everyone. It’s a fun and engaging read.

For more information, check out Financially Blonde, or buy the book!

This post is in: budget

I don’t know about you but I hate buying things with lots of chemicals in it. For this reason, I generally steer clear of beauty and cleaning products.

In the past few years I’ve found some natural remedies for things that I need. Here are 5 uncommon uses for common household products.

Salt to Remove Blood Stains

A few years ago, I was at a friend’s house and stepped on a piece of glass with my bare foot. We took out the piece of glass, but I was gushing blood on her light-colored couch. Instead of focusing on my pain, I was mortified. I didn’t want my blood to stain her couch! My friend got a wet washcloth and some salt. She put some salt on the stain and started rubbing. To my amazement the blood was coming right out! I was so relieved. The key is to act fast and get water and rub a nice amount of salt on the affected area. And voila!

Coffee Grounds for Cellulite

If you are looking to exfoliate and tighten up your thighs, try using used coffee grounds. Cellulite is essentially pockets of water between fat (I think) and the caffeine helps dehydrate the area and make it look more firm. I usually do this treatment once a week and exfoliate my thighs. Yes, it’s a bit messy, but it works. It is temporary though, it’s not a permanent solution. Exercise and healthy eating should help. 🙂

Baking Soda for Cleaning

You can add water to baking soda and use it as a scrub for cleaning. Easy to make and use, without all the smell.

Olive Oil for Dry Skin

In the winter, my face was perpetually dry. I tried moisturizer and face cream but my skin still looked parched and flaky. I decided to try some olive oil after hearing about the benefits. It did wonders for my skin and made it luminous! If your prone to acne, keep it light. It’s also good for hands and the bottom of your feet.

Turmeric for Teeth Whitening

This one totally blew my mind. I read that turmeric was a great natural teeth whitener. I thought “no way!” How could something so yellow and something that stains nearly everything in sight remove stains from your teeth? I decided to try it. I took a dash of turmeric on my finger and put a little water on it. I applied it to my teeth for 2 minutes. At this point I was freaking out. My teeth were bright yellow. This shit better work, I thought. And it did! My teeth looked whiter and it had removed superficial coffee and wine stains (items I practically live off of). You can do this with a toothbrush instead of your finger but it will stain it!

These are household items I already have in my house so I spent no additional money. I love finding new ways to use things you already have.

What’s your favorite natural remedy?

This post is in: budget, creativity, life

Money is such an interesting thing. At times it can be very abstract and arbitrary, and at other times it contains great significance. It clearly has a lot of power in our lives; it affects our relationships, where we live, how we live and how we connect with others.

The other day I tried to think about my earliest money memory….or when money started making sense to me as a concept.

I would say I didn’t really think about money, or its effect until middle school. Middle school was an awkward time for me; I was painfully skinny and people accused me of being anorexic, and I also had expensive braces to fix my teeth.  At that point I realized how much money my parents were spending on me and my crooked smile.

Middle school was also a time of constant comparison. My peers were influenced by brands, their parents had houses and they had the newest technology (omg, remember nano pets?!?!! I never had one!)

We lived in a modest duplex and always shopped at Target. I never thought we were rich or poor, but you don’t really understand your situation until you compare it to others.  You can have a sense of life that is completely altered when you realize other people’s reality. I had friends that made me feel incredibly poor and friends that made me realize how lucky I was.

During those awkward middle school years, and transitioning into high school, I was starting to think about money and how I could make it. I realized that my parents spent a lot of money on me, and I was completely reliant on them.  I started scheming on how I could make my own money.

I frequented the Warehouse (dating myself – remember the brick and mortar music shop?) and I saw that they bought used CD’s. My parents had a ton of CD’s and I knew they didn’t listen to all of them. So I secretly took a stack of their CD’s and sold them to the Warehouse. I made $20 and felt amazing. Not only amazing, but rich! It’s incredible what $20 can do to a kid.

Of course, I didn’t tell my parents. They found out weeks later when they asked me where some of their CD’s were. I’m a terrible liar, so I confessed under pressure. They were so disappointed in me, and I could tell that my short-sighted desire to make money blew up in my face. It was that money memory that really stuck with me.

What is your earliest money memory? Did that memory shift your thinking about money?

This post is in: budget, life, money

If you are a personal finance blogger, you may have heard about this little get together called FinCon. It’s a financial blogger conference that seems pretty rad, and it’s happening in New Orleans this year. Tickets went on sale today, and I found this out by all the tweets about people being excited and buying their tickets.

If you remember, attending this year’s FinCon is one of my goals for this year. But at $200, plus flight, hotel, food, etc, I’m feeling a little uneasy. After all, I am a debt blogger. And I hate to say it (feel free to throw stones at me), but I’m really trying to make another trip to Iceland for my 30th birthday. Everything seems so up in the air though. I’m waiting to see how much of a tax refund I will get; Wondering where’s my tax refund, waiting to see what other hustles I can conjure up, and let the year shake out. I don’t seem mentally ready to lower my debt payments, which have been abysmally low lately considering my minimum is $900.

I have a travel savings account (affiliate link) with a measly $125 in it. That won’t get me to Iceland or New Orleans. I’m wondering, do you think debt bloggers should go to FinCon? I can’t say if, or how much it might derail my debt repayment progress and of course, I cannot measure the networking opportunities that will arise at the conference.

All this to say, I am not judging debt bloggers who are going — I’m trying to get there myself! And go to Iceland. I guess I’m just feeling uneasy about the money, and the commitment. I’d love to hear from you if you went to FinCon last year. Were you in debt? Was it “worth it”? What were your big takeaways?

At this point, I haven’t even broke even with the money I’ve put into creating this site. I’m trying to change all that this year, but it feels like if I haven’t even done that, am I ready? Will going to FinCon make me ready and change that dynamic?

Let me know your thoughts! I want to go New Orleans and meet all of you! It’s on my bucket list of places, and seems so awesome. I think I’ll have a serious case of FOMO (did I really just use that term?) if I don’t go.

This post is in: budget, FinCon

January 27, 2014

Don’t Drink

Want to know the best way to save money on alcohol? Stop drinking! Drinking isn’t very good for you. If you don’t drink you will save so much money, and it’s probably better for your health. But if you are like me and enjoy the occasional libation, skip to the next item 🙂

Join a club

Have you ever considered being part of a wine club? Or something similar? Ryan and I are part of a sake club. Yes, sake! It’s amazing. We spend $9 per person, per month to get 2-3 bottles of sake every other month and we get a 25% discount when we buy more. We also are invited to fun parties with free tastings and we get to invite our friends. We invited some friends a while back and they joined the club, and I ended up getting a free bottle of sake because of it!

Make your own

In Portland, so many people make their own beer. We don’t, but I think it’s a pretty cool idea. It does have some start-up costs with the equipment, but once you get going it seems pretty cheap.

What I usually do is buy cheap vodka and make my own “infused” vodkas by adding pears, ginger and other things. It really makes a huge difference and it tastes good!

Go to Happy Hour

My favorite happy hour in Portland has $2 cocktails and $2 grilled cheese. I’ve spent $10 and had several drinks, dinner and tipped. I just love it. Sometimes it can be hard to find those extra special deals, but once you have found them, they are so worth it. I don’t enjoy spending $8-15 on a drink (I did spend $15 on a drink once in NYC), so I try to go for the deals if I am going out.

Drink at Home

If you can’t find any good happy hours, save your money and drink at home with friends. Share a bottle of two buck chuck, my all-time favorite deal. You don’t have to deal with other people, spend money on tipping, or pay for overpriced drinks.

Eat food and drink water

Seriously, save yourself from a possible hangover and eat and drink water while you are enjoying your drinks. I’ve made that frugal stupid mistake by drinking and being too cheap to eat, and I hated myself the next day. When your hungover, you make bad decisions because all you want to do is to feel better. Usually that involves food, and if you are not well you are likely to go spend “convenience” money to get better. Now I make sure to eat before, or bring along some snacks.

Buy out-of-state

When we went to San Francisco over the Thanksgiving holiday, we stopped at Liquor Expo before we crossed the California border. Why? Oregon has the 2nd highest liquor tax in the country. It’s outrageous! Alcohol in California is so much cheaper, so we decided to pick up a few items that we knew would last all year. We saved over $100 by buying alcohol in California instead of Oregon. It seems to be a pretty big money-maker for them, as there are signs everywhere before you leave the state. It’s a pretty funny place. It’s like an alcoholic Costco.

Don’t Drive

Seriously, don’t drink and drive. Know yourself and your limits. Use your judgement. I’m glad I don’t have a car and don’t have to worry about this. A DUI can cost up to $10,000 and ruin your life and the life of others. If you need a sobering reminder, read this tale about getting a DUI.

Do you drink? If so, how do you save money?



This post is in: budget, life

I never thought I’d be in a long distance relationship. I was one of those of people who thought people in long distance relationships were ridiculous.

Why would I do that to myself? That’s so silly! Find someone new, find someone local!, I thought.

But sometimes things happen in life that make you re-evaluate everything. When I got into my dream school in NYC, I was living in LA and my boyfriend and I had been dating for 2 years. We had talked about me applying to grad school in NYC, but because it was my dream school I really didn’t think I had a chance. I thought for sure I’d get into my safe school, which was in LA.

I ended up not getting into my safe school, so I put my thoughts of grad school on the shelf. Then in a surprise move, I found out I did get into my dream school. My options were to move to New York or not go to graduate school at all.

To make a long story short, moving to New York for graduate school made sense at the time. My partner was also in school and was planning to transfer to another school. Before I moved to New York, we went on vacation to Portland, Oregon. We both really enjoyed the place, and I flippantly said he should look into schools there.

As life would have it, I moved to NYC for school and he moved to PDX for school. It was one of the hardest decisions we had to make, but we both didn’t want one of us to not follow our dreams and feel resentful. But what were we going to do?

At this juncture in time our options were to stay together or break up. I decided to go with the least painful option, which was to stay together. Suddenly, I was going to become one of those people in a long distance relationship and I was determined to make it work. Here are the tips that got me through it:

Come up with a game plan: How long will you be long distance? How often will you communicate? How will you communicate? How often will you see each other? These questions are so important to figure out on the front end, to avoid confusion and heartache later on.

Create a routine: Routine can be immensely helpful in feeling stable amidst so much change. Find out what works best for you two. Maybe you will decide to start the day off with a text, and end the night with a goodnight phone call or Skype session. Once you decide what that is, stick to it and if you can’t for some reason, communicate about it.

Sign up for air miles, train points, etc: When I was doing long distance I had an airline mile accruing debit card, and I also joined all the clubs to get miles for each flight. Because Portland and New York City are at opposite ends of the country, we accumulated quite a few miles during each trip. We were able to get three flights for free during our long distance adventure and that was extremely helpful. Also, empower yourself and know when the best time to buy is, and find deals. Buying flights on Monday and Tuesday is much better than buying them Thursday-Sunday. I also used TravelZoo to find deals. Flying on Thursday or Saturday is much cheaper than leaving on a Friday and coming back on a Monday, is much cheaper than coming back on a Sunday. Learn these tricks to save some money.

Schedule Visits: For me, the worst thing about doing long distance was not knowing when I’d see my boyfriend again. It’s a really unsettling feeling. We would schedule our visits months in advance, just so we’d have something to look forward to. Knowing exactly when you will see each other helps ease the pain and shortens the time between visits.

Find a support system: Make new friends, find others in long distance relationships, and make sure to have a steady support system. It’s important to feel independent, but also connected despite the distance. Have a friend to call if you need to vent. I don’t recommend that you talk to your partner about how hard it is doing long distance. Save those conversations for friends and do your best to keep conversations with your love positive.

Make visits fun and frugal: Seeing your loved one arrive at the airport (or train/bus station, etc) is one of the most glorious feelings in the world, especially if it’s been months since you’ve seen them. You look at your partner with a new curiosity, a renewed love, and a happy heart. Conversely, sending your loved one off to go back is utterly heart wrenching. I can’t count how many times I broke down and cried in the airport or train home. The time together is never enough, so make it fun! Go on walks, go to dinner using groupons, find cheap happy hours and stay inside a while 🙂 The primary cost with long distance is transportation, so save up your money for that. Being together should be your first priority, and not spending all your money like it’s your last night alive (I’ve done that).

Keep the romance alive: Being in a long distance relationship can be really lonely. You are technically in a relationship, but in a lot of ways you feel single, but you can’t act like it. It’s really important to keep the romance alive when you are apart, so you don’t move your relationship to the friend zone. My boyfriend and I set up this system where we would count down the days until we saw each other with a sweet note, or email. I’d send an email (62 days until….), the next day he’d send an email (61 days until….) and we would send each other love notes, songs, pictures, etc. I still have all the emails and they are really fun to go back and read. I know it sounds cheesy, but keeping the romance alive is SO important when distance is a barrier to physical connection.

Move or Breakup: I know that sounds harsh, right? But you are not going to be doing long distance forever. No one starting a long distance relationship intends for it to be a permanent thing. There was a point in my relationship where I wasn’t sure if I was going to stay in New York. I really wanted to, but the financial cost and missing my love was weighing heavily on me. After giving New York my best, I decided to move to Portland and be with my partner. Many of my classmates started graduate school in long distance relationships and to my knowledge I was the lone survivor. Everyone else broke up. Long distance is not easy, but if you are committed, you can make it work.

Adjusting to being together again: Ryan and I were inseparable for the first two years of our relationship in LA, which made doing long distance that much harder. But after a year and a half of being apart, you are forced to be really independent. I didn’t have to check in about dinner or plans, and I could take care of myself. When I moved to Portland, we both had to adjust to being together on a full-time basis and dealing with some of the unglamorous parts about living together: Who pays the bills? Who cleans what?  What are we having for dinner? After doing our own thing separately, it took a while to get back to our groove of being together. After one month of settling back in, everything was great! Now that we’ve lived together for two years, things are in a rhythm and really wonderful.

Are you in a long distance relationship? Have any other tips to add?

This post is in: budget, relationships

December 22, 2013

I think Santa is going to bring me a bucket of coal. I’ve been a bad, bad girl. (Fiona Apple, anyone?)

I’ve been MIA from the blog this week and not without some regret. The intention was there, but every time I sat down to write, I didn’t want to admit the truth. Things in writing seem so permanent, so determining.

I wasn’t ready to accept some things.

Remember how a few months ago, at the age of 28 I got my very first credit card? Well, it hasn’t worked out so well.

Let’s back up and remember why I thought having a credit card was stupid: Why buy something if you can’t afford it? Why not just pay with cash, to ensure you can afford it? For so many years, I never understood it.

For 28 years I was diligent with my money and cash flow. There were times it was tight, but never once have I relied on a credit card for anything. Because of my love of travel, I thought having a credit card that earned miles would be a good idea.

Everyone says that as long as you pay off your credit card each month, you’re good. And I did exactly that. At the end of each month, I diligently paid off my credit card and saw those miles accumulate. It was exciting and I felt responsible. I can do this, I thought.

But I became a statistic. I did exactly what people expect. I spent more money using the credit card than I did with my debit card. Even though I was able to pay it all back each month, I ended up spending more money than I usually do.

It’s all pretty simple. Credit cards allow you to alter your cash flow. With a debit card, if I didn’t have the money, I couldn’t afford it, therefore I wouldn’t buy it. With a credit card, I said, “Oh well, I can pay this back at the end of the month, when I get paid!”.

I would say for the past two months my spending has increased 25%. Some of it was for Thanksgiving travel, some of it was necessary, and some was indulgent fun.  Last month my credit card spending was ridiculous and this month I am paying the price for it.

I’ve “only” been able to put $900 towards debt this month, compared to my goal of $1500. I’ve had to transfer some money from my pathetic savings account just to get through the rest of the month until I get paid again.

I’m also becoming acutely aware of how much my side hustling has really helped me survive. The past two months have been slow. I’ve made $200 in extra income the past two months, where most of this year I averaged $300-$400 per month. So it’s been a bit dry and coupled with my credit card fail, I’m feeling pretty low.

I know this is merely one moment and I am acknowledging the issue. I am resolving it by only buying my groceries with the credit card. I think I subconsciously wanted to spend more because I knew I was getting miles and it would get me closer to a trip.

Although the past two months were bad, I have to keep focused on the bigger picture. The bigger picture helps me keep perspective. My goal this year was to pay off 15k in student loan debt. When I wrote that in January, there was no way that was possible. I was making 12/hr and my job was going to end in four months.  But I got a new job, hustled and I put $16,660.29 towards debt in 2013!

Bad news? Almost 3k of that went to interest so I currently owe $43,913.55. I cannot wait until I am under 40k! About 35k of that has crazy high interest: 6.8%-7.9%. The rest is my undergrad student loan, chilling at 2.5% interest. I will be super excited to get my grad loan in the 20’s and my overall debt in the 30’s. That is much more manageable than 50’s or 60’s and the total 81k (with interest probably closer to 100k 🙁 ) that I’ve owed.  I’m almost half way there (and I’m living on a prayer).

In the next week or so, I will attempt to get out of this funk, forgive myself, keep to a spending freeze, not touch my credit card and hustle for work. I have big plans and big dreams for 2014.  Although I am feeling low now, I never thought I’d be able to accomplish what I have this year. It literally wasn’t possible before.

I need to remind myself that your failures are not your future, and your present is a work in progress. I am ready for a fresh start.

Have you had any setbacks lately? Any end-of-year disappointments?

This post is in: budget, pf-fail