In September of 2016, Dyana King decided it was time to take control of her finances, dig herself out of debt, and start building generational wealth for her two young children. She was living paycheck-to-paycheck, and owed approximately $35,000 combined in auto loans, student loans, credit card bills, and personal loans.
In 2020, King had finished paying off all that debt, and today she has a positive net worth of almost $80,000 according to documents reviewed by Insider. She also coaches other low-income single moms about how to get out of debt and build wealth, through her YouTube channel and blog, Money Boss Mama.
Achieving her goals did not come easy. At the beginning of her “debt-free” journey, King was only making $32,000 per year, equaling about $15 an hour, the sole source of income for her and her kids. She used seven strategies to get herself out of debt while living on a low income.
King told Insider that one of the reasons low income earners resign themselves to being in debt is because it takes longer to achieve your goals on limited means, and it gets exhausting to try.
When she first began to budget, King would only have $60 left over at the end of the month after paying her bills, giving her about $15 extra per month to work with toward paying down debt faster. But nevertheless, every month she put $15 extra toward her auto loan payment.
“Was it helping a lot?” King said. “No, but it was getting me into the habit of remaining consistent and having that discipline of sending that extra money over, and I know that was a game changer for me.”
King was able to pay off bigger chunks of her debt during tax season when she’d get her refund.
“A lot of us have extra income like tax refunds or bonuses, and we don’t see it as an opportunity to leverage our debts,” said King. “I’ve done it — gone out and blown it, and it’s gone in two weeks.”
She used the bulk of her tax refunds for her auto loans. Later, she would also begin receiving extra incentives from her job every month or two. She also received COVID-19 stimulus checks that she put toward her debt.
After making regular extra payments toward her auto loans for a while, she noticed that her credit score jumped by about a hundred points, to 705. She used this as an opportunity to refinance her auto loans with a credit union.
Originally, her auto loan came with a monthly payment of $495 and had an interest rate of 9.2%. When she refinanced, her interest rate fell to 2.6% and her monthly payment dropped to $345.
“Needless to say, that saved me a lot of money,” King said. However, she kept up with the $495 payments she was making before, so the debt would be gone more quickly.
The next move that King made in her order to lessen her debts was to roll over her high-interest credit card debts onto a new card that had a 0% APR introduction rate, which she was able to do after her credit score rose.
“I find this very helpful for anyone that has a low income, because if you’re fighting with that interest, you’re basically keeping your balance the same,” King said.
“I did have to pick up a side hustle because my income was not going to cut it, especially with kids,” King said. “Writing is something I went to school for and love to do. People always ask me for help with their research papers.”
So, King started to think about how she could monetize this skill. “I got into freelance writing and that made me about an extra $200 to $400 every month,” King said. “And obviously, some of it did have to go to monthly expenses — but the rest I applied to extra debt payments.”
In addition to getting a side hustle, King also focused on getting a promotion in order to increase her overall income. In August 2018, she got the promotion she was working toward, and her pay jumped to $50,000 from $32,000 per year.
King also leveraged payouts from her job as a curriculum and course developer for unpaid PTO. “With my company, anything over 80 hours we can sell — so I would hoard PTO,” King said. “If my kids had appointments, I would just stay extra throughout the week to make up for the hours.”
King told Insider, however, that she does not often recommend this strategy to people, and admits that this particular method can be extreme.
That said, whenever she would accumulate 20 to 40 hours of PTO that she could sell back, she would get anywhere from an extra $500 to $800 in return.
King said student loans were one of the last things she focused on, starting in 2018. She paid it off by the end of 2020, at which point she became completely debt-free.
She started out with about $20,000 in student loan debt, but the reason she was able to pay it off so quickly was in part due to circumstances beyond her control: Student loan interest and payments have been frozen during the course of the pandemic.
During the pause, King continued to make payments and was able to bring down the principal loan amount.
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