One debt expert says keeping 4 issues helped her pay back $77,000

  • Debt expert Nika Booth began her journey in 2018 after following Dave Ramsey’s advice to cut all discretionary spending.
  • She soon realized that taking the fun out of spending was sabotaging her debt-payment efforts.
  • She regrets making four early budget cuts, including dining out and gifts.

Before the pandemic, 41-year-old debt expert Nika Booth was paying over $1,000 a month on her government student loans. After working for the government for the past 12 years, Booth qualifies for government loan forgiveness, a program that forgives public servant student loans after 10 years of eligible payments.

In addition to her student loan payments, Booth lived paycheck to paycheck, with 16 credit cards and unexpected tax debts that had to be paid off. During the pandemic, she took advantage of the pause in federal loan payments by topping up her emergency savings fund and diverting that money to pay down her credit card debt.

Since beginning her debt payoff journey in 2018, Booth has successfully paid off all of her credit card debt. To date, she has paid off $77,000 in debt. Thanks to a limited waiver from the Biden administration, Booth made 102 of the 120 eligible payments. In just 18 months, Booth will forego $132,000 in student loans under PSLF.

Due to the lack of diversity in personal finance, Booth admitted that she was first influenced by David Ramsey, who has often been criticized for encouraging people to deprive themselves of pleasure-bringing discretionary shopping in a place with white male privilege.

She quickly realized that self-deprivation was the downfall of a carefully constructed debt-repayment plan. “Think of it like dieting,” she says. “When you’re that limited, eventually you’re going to spend a lot of money.” Four years later, Booth uses her social media platform, @debtfreegonnabe on Instagram to be the example she needed to see when she started.

Here are four budget cuts Booth regrets as she begins her debt payoff.

1. Eat out

Booth took Ramsey’s firm advice and cut back on eating out as much as possible early on in her debt-paying journey. “I am a true foodie at heart. I love trying different foods,” she tells Insider, adding that limiting meals with friends makes her unhappy. She learned that severely restricting eating out was making her debt-payment goals unsustainable.

2. care

Booth has vitiligo, a condition that causes pigment loss in certain areas of her skin, most notably on her hands. “As someone who uses their hands a lot when talking, having manicured nails gives me an extra boost of confidence,” she says.

Booth adds, “It’s really important to me that I can present myself to the world at my best and that means getting in shape for Friday or making sure I’m wearing my fresh line.”

3. Gifts

In 2018, just as she was beginning to pay off her debts, she refrained from buying gifts for her family members for Christmas. “We can talk about the commercialization of the holiday, saying, ‘No, we don’t have to buy gifts!’ But it was something I was used to every year,” she says. “It makes me feel good to give people gifts, especially things that I know they need or might need, especially my mom.”

4. Season tickets to see your favorite baseball team

A longtime Washington Nationals fan, Booth still wastes time tickets. Now Booth is creating tight funds, savings that will later be set aside for larger purchases to ensure she can afford to buy season tickets.

“I’m a single person and I pay every bill in this house,” says Booth. “Now do I have to be unhappy because I’m paying off debt? Absolutely not. I’m not saying, ‘Spend all your money!’ But those for those little luxuries can be worked into your budget Budgeting for things you enjoy while also addressing debt increases the likelihood that you can stick to your debt-payment schedule.

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