In this series, NerdWallet interviews people who have triumphed over debt. Responses have been edited for length and clarity.
DeShena Woodard is happy.
She’s working full time in her dream job as an RN, running her own financial blog and living in a suburb outside of Houston.
From the outside looking in, you’d never guess this got-it-all-together professional was recently struggling.
Just a few years ago, Woodard was anxious. Every dollar she made at her part-time job was earmarked for a bill to pay someone else. She had nothing in savings and was growing weary of living paycheck to paycheck.
Woodard was spending more than she earned, something she refers to as living “extravagantly broke.” (Appropriately, Extravagantly Broke is now the name of her blog.)
That’s when things changed. With her children getting older and her own education complete, Woodard was in a position to begin working full time. She upped her salary to approximately $75,000 in 2017 (a sizable increase from about $50,000 in 2016) and undertook a financial journey.
While her husband paid down household debt, Woodard worked on paying her own. She shifted her focus from habits like buying new clothes and overspending on Christmas to holding on to things longer instead of replacing them. She bought only what she needed and rarely what she wanted. Her lifestyle went from extravagant to frugal.
And it worked.
Between January 2017 and August 2019, Woodard paid off $51,754 in debt — a combination of credit cards, auto loans and a personal loan.
She paid off a Nissan auto loan, hefty credit card charges for her schooling that had been building up and expenses for her daughter.
Nowadays, she’s living comfortably and is still getting used to small victories like seeing money building in her bank account. The best part? Woodard says she’s doing better emotionally.
“I feel much happier not having any debt and driving a Nissan than I would having a lot of debt driving a Mercedes.”
Here’s how she paid off debt and what she learned along the way, in her own words.
What triggered your decision to start getting out of debt?
I was not happy with the current state of my finances. I was stressed and anxious about money all the time. I knew that what I was doing wasn't working and decided to make a change. I changed my attitude toward money and that is what led to a change in my spending behavior. I made the choice to live a comfortable life instead of an extravagantly broke one.
How did you prioritize your debts?
I was paying all of them at the same time, but I was paying more on some than others. For one credit card, I was paying $500 a month and the other one $300. On my car, I was paying double. But once I got both credit cards paid off, then I was able to pay triple on my car.
For me, I needed to see that they were all moving in the right direction. That’s just what worked better for me. For some people, it may be better to just pay one thing off at a time if that’s what you can do.
How has your life changed for the better since you got out of debt?
My life has definitely changed for the better since being out of debt. For one thing, I can sleep better at night. I'm not always worried about being able to pay my bills. I am now at the point where I forget when payday is. And I often go for more than a week before even checking my bank account to make sure that I did get paid.
How do you remain debt-free today?
I have become much more money savvy and I don't make spur-of-the-moment purchases. Every spending decision has to be well thought out. I stick to using cash or debit. And I budget for everything.
What made you start your blog?
I know there are people out there like me. For me, it took a mindset shift. Until we can change our thinking, it’s hard to change our behavior. In my writing, I focus a lot on mindset, trying to dive a little deeper. I can just give you tips, but until something changes mentally, it all just washes over people.
It really takes this sort of self-discovery. You really need to think deep and figure out what is the reason that you need that? Why do you need this car versus that car? Or do you really need another car? What’s wrong with the car you have? Would it be more affordable to fix that up or put a little money into it versus pay a monthly car payment that you’re going to be responsible for for the next 60 months or however many months of your life?
What is your next goal?
I’m working toward becoming a certified life coach so that I can begin coaching people on their mindset and their money to help them bridge the gap and get over the hurdle of why they’re spending.
How to ditch your own debt
In addition to shifting her thinking, Woodard implemented several money-saving strategies. Used in combination, they were effective in reducing her spending and paying down her debt. Here are a few you can try, too:
Distinguish between needs and wants. Stick to a budget that differentiates between needs and wants. Woodard says she tries to live on 50% of her income and is saving approximately 30% of her income. According to the popular 50/30/20 budget, no more than 50% of your monthly take-home income should be spent on needs, 30% on wants and 20% on savings.
Shop smart. Woodard is always on the lookout for a good sale. But she doesn’t shop a sale just because she finds it. She waits for a sale to match an item she already needs. For instance, she waited until a Memorial Day sale to replace her refrigerator.
Become a savvy consumer. Often, when you sign up for promotions from utility providers such as cable companies, the introductory price is valid only for the first year, so it’s up to the customer to ask for a new deal. Woodard calls regularly to negotiate a better price.
There are also some universal strategies to keep debt at bay. Here are a few of NerdWallet’s top tips:
Use a calculator. If you’re not sure how much you should be spending each month, rely on a budget calculator to do the math for you. Then try to adjust your spending to the recommended levels.
Write everything down. Put your budget down in writing in an app, on a spreadsheet or on paper to track your spending.
Build an emergency fund. Cushion your savings with a healthy emergency fund to prevent yourself from falling back into debt. It’s important to have the money to cover an unexpected expense.
Photo courtesy of DeShena Woodard.