How a millennial paid off $90K in a year

Learn how one man paid off his Harvard Business School debt by living a more frugal lifestyle than he was accustomed to.

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Joe Mihalac was excited for his MBA program. A former manager in a tech factory in Austin, Texas, Mihalac was “jacked” to be attending Harvard Business School, despite the nearly six figures of student loans that he needed to take out for the privilege.

Although he didn’t factor in the opportunity cost of attending school full-time for two years, he looked at the average income of Harvard business school graduates and felt that the debt was doable. Besides, it was Harvard.

“There are a ton of MBA programs that don’t command that salary,” says Mihalic. “The fact that I could say I went to Harvard, there was an emotional factor as well.”


Outside of learning new skills and building a network, Mihalic figured he would experience “a lifestyle bump” after attending one of the most prestigious universities in the world.

Until he didn’t. Despite having a combination of federal and private loans that ranged between 3 – 7 percent interest rates, payments on those loans kept him earning around $64,000 a year, nearly the same amount as he was making before he went to Harvard.

“I was making the same money after student loan payments,” says Mihalac. And so the recent business school graduate decided to dial back his spending, pick up odd jobs and pay down his debt as fast as possible.

Mihalic said, “I said screw this, I’m taking it back to college days where all you care about is a Natty light with some buddies.”

But when Mihalac first graduated, he did not live the “college lifestyle.”  Saying that he “got too wrapped up in the Harvard MBA thing,” he bought a house, furniture, a motorcycle and two cars.

“I was so concerned with looking like I had a Harvard MBA,” said Mihalac.

However, in August 2011, Mihalac decided he wanted to pay off his student loans and took to the internet to declare it. Starting the website, No More Harvard Debt, he blogged about his frugal living, something that he said helped to keep him on track.

A self-described extremist, he sold the second car and motorcycle, got roommates, enacted a spending freeze and, in times of true desperation, even began bringing a flask to bars, which “saved a lot of money.”

The millennial even opted to miss Christmas with his family during his year of cutting back, saying “That was my way of going all in.”

“Inherent in all of this is that you have to be comfortable with being uncomfortable,” says Mihalac. “It is not comfortable to set your lifestyle back.”

An important factor of being extremely frugal is to let go of what people think. Milhac said, “I cared so much about how I was being perceived by others.”

But now, Mihalac would “rather be totally financially free than owing money.”

And in seven months, he was. Lucky enough not to have student loans for college, Mihalac paid back his graduate school loans three months earlier than he said he would, which enabled him to take a lower paying job at a different tech firm, a role that offered more opportunity for long term growth.

Mihalic remembers the first time he spoke in class, he nearly blacked out when sharing his ideas. Although he felt that his background as a factory operations manager gave him an edge in the application process, at first Mihalac was “extremely intimidated” by his classmates who hailed from financial services industry or large consulting firms.

“Getting that courage to speak up in front of very smart individuals has carried over,” said Milhac. He believes that while the professors and classes were amazing, a large portion of his education was thanks to his cohorts. His new career was due, in large part, to that exposure.

“It rubs off on you,” says Mihalac. “There were folks I wasn’t interacting with before Harvard.”

Topics:
  • Loans and Debt Management
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  • Student Loans
  • Loans and Debt Management
  • Saving and Spending
  • Student Loans
  • Loans and Debt Management
  • Saving and Spending
  • Student Loans
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This article was written by Alexandra Talty from Forbes and was licensed as an article reprint. Article copyright 8/19/2015 by Forbes.
The statements and opinions expressed in this article are those of the author. Fidelity Investments cannot guarantee the accuracy or completeness of any statements or data.
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