Three Months Out

Check it out! What do you think of my new ride?? Ahhhhhh, I’m so excited right now!!! This is the DREAM!

I had an extra $1,057 burning a hole in my pocket after I paid off my loans and I had no idea what to do with it, so I went out and got myself a Ferrari. The last three months have been absolutely unbearable with this money not already allocated to something…I had taken my savings down very close to $0 when I paid off my loans, so when I had an extra $1k coming in over the past few months, I obviously had to find a home for it.

This beautiful red Ferrari Modena was a Buy It Now for $73k on EbayMotors, so I snatched it up super-quick. Only 33k miles!! I put $0 down (naturally) and the monthly payment is $1,363 per month for five years. Interest will come to $7,800. Pennies, really, when you compare that to the $40k on my student loans. The way I see it, I avoided $30k of interest on my student loans, so this decision was pretty much a no-brainer. I mean, I basically deserve the car, right? Isn’t she just downright SEXY?? Mamma mia!! Che bellissima!

Psyyyyyyyyyyyyyyyyyyyyyyych. I’m kidding. I’m three months out from paying off my student loans, and in a few more weeks, I’ll have seven months of living expenses saved up. I’ve attacked the build-up of my emergency savings almost as ruthlessly as I attacked my student loans. Now that I have a solid emergency fund, I can finally breathe a sigh of relief. In the video where I paid off my student loans, I wasn’t as excited as one might expect when I paid off my loans because I had damn near zero dollars. If I had been terminated the following day, I would have needed to ask my parents for financial aid, and that’s a non-starter on principle alone.

So here I am, seven months of living expenses under my belt, and it feels FREAKING AWESOME. I really cannot overemphasize the awesomeness of this feeling. If I lose my job tomorrow, I can survive for seven months without asking for a hand-out. If I get unemployement checks, I can stretch the Screw You fund out even further. I still work just as hard as ever at the office, but an element of stress has been removed, and I actually feel a lot more effective.

The gun is no longer up against my head, I’m out of debt prison, and I can start thinking about what the next level is going to look like. This feeling I have right now is completely worth everything I gave up in order to get it.

In order to save up the emergency fund so quickly, I continued to be frugal. While I did landscape my yard for $1.8k and bought a couple of shirts and sheets for my bed, I haven’t really spent very much money outside the standard bills, and my monthly expenses have not increased dramatically. I’ll take the Fifth on the flask. Suffice it to say that I’m leveraging Kasbah, which is BYOB, a lot more these days.

I thought I was done with skipping out on bachelor parties and weddings, but not quite. My buddy is getting married in December, and he’s having his bachelor party in September. He lives here in Austin and he’s chosen to have it in Bangkok because he has some very close friends in Europe and Asia. I was on the Facebook thread for the invitation, and people were opting in and out, and most people were initially onboard. I replied, “In. Assuming it’s $$$ and not $$$$$$$$$$$.” Well, I don’t think there’s a way to do Bangkok for sub-$$$$$$$$$$$. Maybe $$$$$$$$$, but not $$$–not with my friends, anyway. Sadly, I had to opt out. At the end of the day, out of the long list of all the people were originally in, it’s looking like six will be going, and most of them either already work in Asia or have family nearby that they can visit while they’re there. I’m wondering if my plea for fiscal sanity had anything to do with it (nevermind the 30 hours of one-way flying for only four days of partying).

I’m pushing hard for an American version, and it’s looking like it’s going to be the F1 here in Austin in November. I had actually avoided buying F1 tickets initially, even though I love cars and racing–and I’ve even held off on buying Austin City Limits tickets even though I love music. That’s about $500 I saved right there. I really, really want to regain a feeling of financial stability and keep the doors for future opportunities, and I’ve been able to continue to deny myself certain pleasures for the sake of the bigger picture. In this case, however, I’ll probably compromise and buy an F1 ticket since it will double up as a (killer) bachelor party.

Anyways, gotta run–gotta take my 12-year-old Honda (that I genuinely love so much) to the grocery store for some quick errands.

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48 Comments

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48 responses to “Three Months Out

  1. Kath

    Whoa!! Checked the date to make sure this wasn’t a belated April Fool’s prank.

    Good for you and so happy for you, Joe! The inspiration you provide continues. Looking at trade-in possiblities for my car and depending on what I find, may be ‘debt free’ by Monday.

  2. You totally had me fooled for a good minute. It’s amazing how having the right mindset toward not incurring excess debt can go a long way. I am facing a potential expensive repair bill (over $1000) for my car but have been shopping around for the best deal and getting the work done right. Prepping for the worst but hoping for the best. 4th repair place is a charm I hope. I almost feel dirty just burning money outside of a certain range.

    I still see a lot of older model cars on the road today. At first I used to judge people thinking everyone with an old ride was poor, but now I’m seeing the light. 60k+ easily in a decade that could’ve been invested or used to pay down debt that people keep rolling over year after year.

    • I was in your exact shoes about a year ago. Now I get it, too. Nowadays, I sort of laugh at the people who are clearly financing their cars. “Let me finance a depreciating asset so I can look awesome.” BRILLIANT.

      • Josh

        Not so much… “Let me finance a nice car that I can really enjoy for a few years instead of blowing the money on pointless expenditures” is how I see it. Couldn’t care less how I look in it, (after all, the windows are tinted for a reason).

  3. Lehi Lazo

    Congrats on your new car! :) I still find your blog entertaining and a good read even though you are now debt free.

  4. Kevin

    Excellent, excellent psych, buddy. You had me there when you were showing the close-up shots of the Ferrari emblem and whatnot. Keep up the good work on living frugally. I have also amassed a good 6 months worth of living expenses saved, and it’s super hard NOT to spend the money, but at the end of the day, looking at the fat bank account is a HELL of a lot more intoxicating and rewarding.

    Pro tip: you can drive an exotic car around a race track for a day for the price of an average car payment so you can get your thrills in. Beats paying gas, insurance, maintenance, and blowing away savings on the down payment of a NEW car!!

  5. Lizzy

    It’s pretty freaking amazing that you can save up 7 months of expenses in just over 3 months! Especially with having a mortgage and probably a bunch of ladies asking you out! lol.. Congrats! :D

  6. Jess

    I was actually sort of worries that this was not a joke… but i’m super excited for you! i keep trying to convince my fiance that you didn’t have it super easy the whole time you were doing this (“well, he CLEARLY makes $10K/month and that is so not applicable to us”). i’ve probably posted this before, but what a great journey to have been able to watch – and keep up with the updates!

  7. Allie

    These posts are so much better than the others. Much more “NMHD” and much less “Who is this ‘Joe’ character.” Looking forward to catching and keeping up!

  8. Diana

    Quick question about your roommates. Are you still letting them stay? How will that situation play out since you don’t really need that money now?

    • Yes, they’re both staying for a couple of more months–one is moving here permanently and looking for a place to stay long-term and needs a bit more time. The other one’s internship is running long. I’m accomodating both, thenI’m planning on living alone after a year of living with roommates. The question is what do I do long-term. This place is way too freaking big for one guy, but I hate living with roommates. I’d rent it out, but I’m paranoid that the renters are going to destroy it, and it’s in immaculate condition right now. I have a lot of reflecting to do on the real estate portion of my finances.

      • Sarah

        I didn’t believe the Ferrari thing for a second. I knew you’d continue being frugal. Also I know you pled the 5th, but I hope you’re still flasking because you said you’d give me a shot from your flask back in Sept.

        I think you should just keep the house and not rent it out, you never know what people will do to it and you deserve to have the man cave to yourself again. Also the house won’t feel as big when the future Mrs. Mihalic and baby Mihalics come along in a few years (months?)

      • Sarah, good point. And not sure if it’s months or years. These days, it’s looking like years–definitely years for the kids; lots of saving up to do before those come along.

        I think the original question is an interesting one because Diana explicitly says that I “don’t really need that money now.” It probably wasn’t meant to be a provocative statement, but I think it’s worthy of some reflection. While my student loans are paid off, I could probably use an extra $850/month–whether it goes into the early retirement fund, mortgage pay-off fund, vacation fund, etc. So while I don’t “need” $850/month to pay off my ex-loans, the big question now is what does my financial future look like, and should I leave $850/month on the table to meet my preference of living sans roommates? Or do I rent the house out and go find cheaper living accomodations and try to find upside there?

        • Diana

          Joe you’re right. I’m sure it’s great having that extra money but you are giving up your space. Renting has it’s advantages and disadvantages but it’s your choice. Another thing to consider is whether you live close to work or not. It may benefit you to rent and move closer.

          Also, side note do you roommates know that one is paying $50 more, lol.

  9. Holy balls. I’ve been following your blog since the beginning (found you about two posts in, I think?), and I seriously was PISSED during these first few paragraphs. Thank you for restoring my faith so quickly. :)

  10. You really had me with the Ferrari for awhile. Great post.

    I just paid off all my debt last month and it felt pretty much empty since I pretty much had no money. I’m at about 1 month of living expenses. Can’t wait to get to 3 and eventually 6. Then I think things will feel a lot more awesome like you said once I get there.

    Any thoughts on what’ll come next once the loans are gone and you’ve got the FU emergency fund in place? I’m thinking once I get there a 4HWW Tim Ferriss style muse that matches the current on job income would be pretty awesome.

    Debt-free, Emergency Fund, Money not tied to a physical location. Sounds a lot like freedom

  11. Marc

    You really had me with the Ferrari for awhile. Great post.

    I just paid off all my debt last month and it felt pretty much empty since I pretty much had no money. I’m at about 1 month of living expenses. Can\’t wait to get to 3 and eventually 6. Then I think things will feel a lot more awesome like you said once I get there.

    Any thoughts on what’ll come next once the loans are gone and you\’ve got the FU emergency fund in place? I’m thinking once I get there a 4HWW Tim Ferriss style muse that matches the current on job income would be pretty awesome.

    Debt-free, Emergency Fund, Money not tied to a physical location. Sounds a lot like freedom

  12. Brandy

    Congrats on the 7 months of living expenses!!! We will be semi-debt free by the end of this year (just our mortgage left). We have savings, 401ks, etc. We could wipe out all of our non-mortgage debt today, but I just hate spending our savings. I think I would be really freaked at having $0 in the bank. You have more courage than me!

  13. Lol. I told HubbyJD I would buy him a matchbox version of the car when we make it big. . . or pay off our student loans. :) 40K done in 10 months . . . oh – 230K to go.

  14. Angela

    I can’t lie: I was genuinely upset when I saw the first paragraph. I had a list of not so nice things to say (starting off with This Trifiling guy…after all he’s done and taught….he goes and…son of a..). But now that I know it a was joke (one that got me pretty well I must say), I’m happy again. Oh and I officially retract all of those negative nancies. We’re good? Mmkay, thanks!

  15. I almost drove to Texas to punch you in the face.. well done staying level headed. Looking forward to my own Screw You fund :)

  16. Wendy

    Wait ,that car is not a she. .Its a HE ….very masculine car. Congratulations.

  17. Dayo Dejo

    Wow man. Your are a great inspiration. However, If I were you I wouldn’t buy a Ferrari, but hey man you earned it. I am just trying to get a loan to pay for college and you were able to pay off all your loans. A story to emulate.

  18. Beate B

    I’m am still recovering from the momentary loss of my pulse and respirations while reading your post. Well done, that was a good one! Personally, I’m not impressed with material things, with the exception of cars…and that was a hot one! I love Porsches. Just got out of debt last month. ($77,000.00 over two years) It felt bittersweet, the joy of being out of debt, but knowing you’re momentarily broke in the process. But through it all, as we build up our emergency fund and become wealthy, there is nothing….NOT even a Porsche, that I would borrow money for. And even if I have the cash for a Porsche, I think I’d rather travel the world again. :)

  19. WAY TO GO!! Let me know how you feel once you have six months saved up. Congratulations!

  20. Skye Brown

    I thought u had lost ur mind when I saw the car…. It’s good to see that it is still attached! I can only imagine the insurance it would cost to “afford” a sweet ride like that. I’d be afraid to get in a crash with that car and not only because of the dings but the $$$ that would be in other drivers eyes!

  21. That car. Man, that is an awesome car.

    My cousin was just married in April in the Bahamas. Since her whole family lives the the US, only her parents and our grandparents attended. Tiny wedding.

  22. Brittany

    Hahaha oh my gosh! At first I thought “man this guy was smart and now he’s just a fool!”. It takes me a little longer to catch on though, but the dream car is beautiful! I’ve never heard of the “safety net” savings called a screw you fund… the name seems more appropriate.

  23. Rachel

    I WAS going to fix you up with my daughter who lives in Austin. . . until the Ferrarri! I couldn’t believe you would make such a stupid decision. Thank heavens you are joking!

    My husband and I have always saved 8% of his salary in the 401K (matched by the company). Now we are fifty three, our savings are valued at about a million dollars! It really is important to start saving early.

    All young people should contribute to a Roth Ira, even if it is just $500 yearly. That is a huge benefit to your generation.

  24. Jayant

    Have to say, Joe, if you had bought that Ferrari, I would have been a bit disappointed – considering how your mindset has changed during your debt free journey. But, deep inside, when I read the first para, I knew you’re messing around. ;)

    Glad you’re still in that ‘makes sense’ mindset, mate. Way to go!

  25. It’s a cool car…but really…where would you park that thing and not worry about it? When I first started reading this article I was laughing & thinking..”There is NO WAY he bought that with a flask in his pocket!” *lol*

  26. HoopyMan

    I was like “WOW… Noooo!” and you were like “Sure, it’s just a monthly payment” and I was like “Nooooo” and you were “Psych!!” LOL LOL

    Way to go.. stay on track. You have come so far.

  27. Anne

    I really admire what you have done and your discipline. When I get a job again, I want to spend less of my money on stupid stuff that doesn’t have any value and start saving more. Thanks for sharing your story and giving inspiration to becoming more financially secure.

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