Written on May 24, 2012 ? 8:00 pm | by Adam Williams
From Yahoo Finance comes the story of Joe Mihalic, a Harvard University business school graduate with $90,000 in student loan debt that he paid off in 7 months.? His plan was to pay off his debt by Summer 2012, but he paid it off 3 months early at the end of March.? This goes to show the results one can have when working hard and being dedicated to completing one task.
How did he pay it off, you ask?? His 6-figure income from Dell did not hurt.? But, he also used frugal means such as having roommates, a second job in landscaping, stopped eating out, selling unneeded items, and when he went out with friends, he would sneak a flask of alcohol with him.? On a riskier note, he did cash out most of his 401k to pay off the loan.? That saved him $40,000 in interest, but he will have to repay the 401k loan.
It did require some lifestyle changes.? He had a mortgage, 2 cars, a motorcycle, and was used to spending $1,300 a month on entertainment.? He ended up selling one of the cars and the motorcycle.? He stopped going on dates that included a dinner or movie.? He stopped attending bachelor parties and weddings.
One thing he says that I like is ?So every dollar I spend on non-essentials today is a trade-off that will bear itself out far into the future: the new car, the bigger house, the cruise, the 60? 1080p LCD TV?those all equate to extra days I?ll have to work.?? This is something I have learned as well.? When I spend $5 on a cheeseburger, I?m not spending $5 on a cheeseburger.? I?m spending $5 + 30 years of interest/dividends on that 5 dollars over 30 years.? That can equate to hundreds of dollars for just one cheeseburger!
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