Debt Expert Says Keeping 4 Expenses Helped Her Pay Off $77,000
- Debt expert Nika Booth began her journey in 2018, following Dave Ramsey’s advice to cut all discretionary spending.
- Soon she realized that depriving herself of fun expenses was sabotaging her debt repayment efforts.
- She regrets having made four budget cuts early on, including restaurant meals and gifts.
Before the pandemic, 41-year-old debt expert Nika Booth was paying more than $1,000 a month for her federal student loans. Having worked for the government for the past 12 years, Booth is eligible for Civil Service Loan Forgiveness, a program that forgives civil servants’ student loans after 10 years of qualifying payments.
In addition to his student loan payments, Booth was living paycheck to paycheck, with 16 credit cards and unexpected tax debt to pay off. During the pandemic, she took advantage of the federal loan payment pause by bolstering her emergency savings fund and redirecting that money to paying off her credit card debt.
Since beginning his debt repayment journey in 2018, Booth has successfully paid off all of his 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 120 eligible payments. In just 18 months, Booth will have $132,000 in PSLF forgiven student loans.
Due to the lack of diversity in the personal finance space, Booth admits she was first influenced by David Ramsey, who has often been criticized for encouraging people to forego joy-bringing discretionary purchases. in a place of white male privilege.
She quickly realized that self-deprivation was the downfall of a carefully constructed debt repayment plan. “Think of it like a diet,” she says. “If you’re so limited, you’ll end up gorging yourself and spending a lot.” Four years later, Booth uses his social media platform, @debtfreegonnabe on Instagram, to be the example she needed to see when she started.
Here are four budget cuts that Booth regrets making at the start of his debt repayment journey.
1. Eat out
Following Ramsey’s stern advice, Booth reduced his restaurant meals as much as possible at the start of his debt repayment journey. “I’m a real foodie at heart. I love discovering different dishes,” she told Insider, adding that cutting back on meals with friends made her unhappy. She learned that drastically cutting back on her restaurant meals made her debt repayment goals unsustainable.
Booth suffers from vitiligo, a condition that causes pigment loss in certain areas of the skin, which is most noticeable on his hands. “As someone who uses their hands a lot while talking, having manicured nails gives me an extra boost of confidence,” she says.
Booth adds, “It’s really important to me to be able to present myself to the world in my best light, and that means getting in shape on Fridays or making sure I have my new line.”
In 2018, when she was just beginning her debt-paying journey, she skipped buying gifts for her family members at Christmas. “We can talk about holiday marketing, say, ‘No, we don’t need to buy presents!’ But it was something I used to do every year,” she says. “It feels good to give people gifts, especially things that I know they could use or need, especially my mom.”
4. Subscriptions to see his favorite baseball team
A longtime Washington Nationals fan, Booth is always splurging on subscriptions. Now Booth is creating sinking funds, savings set aside for larger purchases, to make sure she can afford subscriptions.
“I’m single and I pay all the bills in this house,” Booth says. “Now I must be miserable on top of that because I’m paying off a debt? Absolutely not. I’m not saying, ‘Spend all your money!’ but the ones for those little luxuries, you can fit them into your budget. Budgeting for things that bring you joy while tackling debt increases the likelihood that you can stick to your debt repayment plan.