Kerry Taylor was so excited she forgot how to spell the word “thousand.” This was a problem, because she was standing in front of a bank teller at the time, depositing a $5,200 cheque that would erase the last of her $17,000 in student loans. It had taken her six months to get there.

“I’d never signed a cheque that was in the thousands before,” Taylor told me. “That was huge. I just couldn’t believe that this was the final step. The teller looked at me. She was astounded that I paid off the debt. And she couldn’t remember how to spell the word ‘thousand’ either. She just blanked.”

Part of what makes Taylor’s story remarkable is that, while her debt-load was fairly typical among recent Canadian graduates, she didn’t have a huge income to rely on. She was working as a technical writer, earning just under $50,000 a year.

Student debt is an ugly problem in Canada. It was reported in January that students in this country together owe more than $13 billion in student loans. And that doesn’t include credit card debt. The Canadian Federation of Students estimated that the average Canadian graduates with $25,000 or more in total debt.

“I was brought up in a frugal family, and that debt made my head spin,” said Taylor. “I’d never had debt before. So I sat down and made a plan to figure out how I was going to tackle it.”

Taylor made some tough decisions:

• She moved into a basement apartment. “I was living in Vancouver at the time, and property is impossible to purchase there. So I looked at renting versus owning, and renting was by far the better deal. Renting was less than the cost of condo fees and mortgage interest. My rent was only $600 a month.” That included her utilities.
• She sold her car. “A lot of people can’t wrap their mind around that. But if you live in a city with good transportation, it’s possible to get around without a car.” She got to work by bus, bike or foot.
• She turned grocery shopping into a DIY case study. “I stopped buying packaged brand-name products. I bought in bulk from the bins. Beans, I ate a lot of beans during that time. I didn’t eat out. I made all my own meals at home.
• She learned the tax code. “I had all these student tax credits that I saved. So when I started making an income, I claimed that money and that brought in a few thousand dollars. I also contributed to my RRSP, and had employer matching. So I got those tax breaks too.”

What did she do after the debt was gone? Besides photocopying and framing that last bank receipt, she kept on saving. “Within a few years, I saved a six-figure portfolio … Compound interest is cool.”

Fast forward 10 years and Taylor, now in her mid-30s, has published 397 Ways to Save Money. Did you know you could save hundreds of dollars by buying a mismatched mattress and box spring set? It’s all on page 142.

Taylor also blogs at squawkfox.com.