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I would tell you not to give a damn about what they think but if it truly does bother you, focus on talking about your financial goals and priorities rather than apologizing for your situation. You can say, "I'm working hard to pay off my loans and build an emergency fund, so I'm being mindful of my spending right now." If people want to judge you after a response like that, they're the ones that need to be embarrassed.
The best approach is to just tell the truth. Paying off a loan is nothing to be ashamed of, and plenty of people are in the same situation. So just say you can't afford whatever the extravagance happens to be. If people want to get judgmental over that, you're better off not socializing with them anyway.
There is nothing embarrassing about being in a financial situation that late-stage capitalism put you in. Most people recognize that jobs no longer cover even basic living expenses. I would just be honest. "I don't have any spending cash this week, but I would love to meet up with you at the beach" or some other free activity. If they judge you, that's a reflection of them.