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How I paid off $13,000 in debt—and started an emergency fund

Personal finance • April 10, 2019 • Karyna Mata


What you’ll learn

  • How to take the snowball approach to paying off debt
  • Ways to create an emergency fund


It had been six years since college. I was living in a fun city, making progress in my career, and building a great relationship with my new boyfriend. The whole #adulting thing was going pretty well. But there was one problem—I was $13,000 in debt and had no idea how long it would take to get out of it.

Thinking beyond minimum payments

Don’t get me wrong, I knew I owed the money. And I made my minimum student loan and credit card payments on time each month—which is fine if that’s your only option. But I felt like I was just going through the motions, without understanding the consequences. I didn’t have a comprehensive view of my finances and where my money was going.

After a little encouragement from my budget-conscious boyfriend, John, I took a hard look at the numbers—and the interest that was adding up as I made only those minimum payments.

In 2016, I took John’s recommendation and started using a budgeting app called YNAB, which helped me take stock of my expenses, including my student loan and credit card debt. It was eye-opening to see them all in one place. That’s when I decided to take action. I went full snowball.

The snowball approach to paying off debt

Taking the snowball approach to paying off debt means I started by paying off my smallest debt. Then I would roll the money I was paying toward that debt into my next largest debt. It was a good way to gain momentum and a sense of accomplishment. Pretty much, I worked from smallest to largest with a couple exceptions.

I didn’t have a comprehensive view of my finances and where my money was going.


To help me put more money toward my debt, I also cut costs. And there’s no magic trick here. I cut cable and got rid of a few subscriptions. I started planning my meals, shopping for the week, and eating out less. Basically, I used the same old budgeting tips we’ve all heard before—and they worked!

In less than 2 years I was debt free and switched gears to creating an emergency fund.

Creating an emergency fund—and achieving peace of mind

I made it my goal to create an emergency fund that would cover my expenses for 3 months. For me, that was about $5,000. I started searching online for savings accounts with the best interest rates. That’s when I decided to go with an online bank.

Something like a high-yield savings account or money market account works great for an emergency fund.

I was in the process of switching jobs and found myself with a little extra income, so I used that to kick-start my emergency fund. I directed a set amount of my paycheck into savings each week—so I never even had a chance to miss it.

It didn’t take long before I reached my $5,000 goal. And it’s a good thing I did! When a storm damaged my fence, I needed to repair it right away to keep my dogs safe. It cost about $1,800. So I was able to pay for the repairs and then work to build up my emergency fund again.

What I learned from paying off my debt

The experience of paying off debt and creating a budget changed how I view my finances forever. Now I have a save-then-spend mentality and I give every dollar a job—whether it’s going toward my emergency fund or another goal, like a European vacation. The best part of all is how empowered I feel.


Karyna Mata is a project manager at Q2, a company specializing in digital banking solutions. She lives in Austin, TX, and loves getting crafty in her spare time.


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Sallie Mae does not provide financial, tax, or legal advice and the information contained in this article does not constitute tax, legal, or financial advice. Sallie Mae does not make any claims, promises, or guarantees about the accuracy, completeness, or adequacy of the information contained in this article. Readers should consult their own attorneys or other tax advisors regarding any financial strategies mentioned in this article. These materials are for informational purposes only and do not necessarily reflect the views or endorsement of Sallie Mae.

Please note, the author of this article was compensated by Sallie Mae but the views and opinions expressed herein are her own.