A Harvard MBA Pays Down $101K Of Debt

by John A. Byrne on

Joe Mihalic with his parents at his graduation from Harvard Business School

But what allows him to maintain this entertaining and often addictive narrative of what he calls “the walk to debt freedom” was his extreme goal. The challenge resulted in sacrifices that few of his classmates could ever endure. He gave up all dinner dates and didn’t go to a single movie. He stopped contributing to his 401K plan, decided against going home for Christmas and missed his friends’ parties and weddings. When he went to bars with friends, he carried a flask with booze to mix with his purchased Coke. He shared a NetFlix account and refused to buy a single article of clothing.


One of the more amusing aspects of his tale concerns his transformation from being a dating free spender to a “cheap date.” Renouncing his costly drinks-dinner-and-dancing routine, Mihalic started inviting women to coffee. He recounts a date with “Lindsey” over coffee and bagels during an afternoon. Initially, at least, it didn’t go well.

Wrote Mihalic: “I was actually enjoying myself until Lindsay started dropping bombs about three quarters of the way through the date. We had started talking about the subject of dating, and she told me that she was looking for somebody between 34 to 38 years old. I’m 28, and so is she. That was super awkward, and her remark just sort of hung in the air for a few seconds. She also admitted she was dating a doctor, but she qualified it by saying that things probably wouldn’t work out with him.”

Never mind, thinks Mihalic. He rationalizes the experience, saying “She’s a cool chick, but she told me that she eats out for every meal since she doesn’t cook. That shot up some huge, bright red flags blowing in the strong breezes of caution. Not because I want a girlfriend who can cook, but because she’s practicing a flipping expensive little habit, and believe it or not, I’m actually looking for the value of frugality in a woman I date.”


To make extra money, he sold his second car and a motorcycle, rented his spare bedrooms to strangers on Craigslist, and started a side business doing landscaping work. Quickly, he chipped away at his debt. To start, he liquidated his IRA account for $8,000, sold stock worth $14,000, and used about $3,000 of available cash to wipe out one loan. Within seven months, he managed to make his final payment and rid himself of all his debt in March of this year—three months ahead of his goal.

His fanaticism to quickly toss off the debt albatross has its roots in a relatively modest upbringing, despite having a father who is a successful executive in the auto industry. “I come from a family that respects the value of money–almost to a fault,” he explained in one post. “While money never appeared to be tight, it never got thrown around, either. My mom bought my clothes at Kohl’s. If I wanted name brand, I had to pay for it myself. My mom spent her Saturday mornings clipping coupons. Every single Saturday evening–without fail, no exaggerations–we went to mass followed by dinner at Olive Garden, Red Lobster, or some similarly priced restaurant.”

One anecdote is especially telling. “My dad is extremely careful with money, and he has gone to lengths to try to instill that value within me,” the Harvard MBA wrote. “It took him two weeks and a couple of trips to K-Mart before he finally bought me a bicycle when I was five. When I outgrew that, he paid for a second bike a few years later. On the car ride home after the second shopping trip, he told me that that would be the last bike he ever paid for.”


After he graduated from the University of Michigan with a degree in business in 2005, he went to work as a supervisor in a factory in Austin. “I decided the bonuses and raises of my blue-collar staff so I knew how little they made and I saw how many of them were living paycheck to paycheck,” he wrote. “In addition, the factory was constantly under the threat of being outsourced and off-shored. Between these two influences, I never felt fat and happy, and was always watching my back for that tap on the shoulder that signals the beginning of a layoff.”

He concedes now that a shift in his lifestyle occurred during his two years in the MBA program at Harvard. “At HBS, $100 dinners for one person in downtown Boston are a standard affair,” he says. “Nobody thinks twice about taking an international vacation–they just go. I remember a friend told me she was going with a group of students to Oktoberfest for the weekend. I asked her what bar she was heading to. She laughed at me and told me the bars in Germany–she was going to the actual Oktoberfest–for the weekend!”

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