Article by Maya Kachroo-Levine | Found on Forbes

Early retirement is a goal most people talk themselves out of before ever starting. It involves making lifestyle changes in order to accommodate hard-to-reach savings goals, and often going to extreme lengths to pay off debt quickly. The upside, of course, is shaving 10-30 years off your workload. I’ve interviewed people who are just starting to plan for an early retirement, and others who have already successfully retired before 30. From them, I’ve gleaned some of the dos and don’ts of retiring early. If you want to pursue early retirement, here are eight things that may be holding you back.

1. Only making minimum payments on your debt.

Debt is one of the biggest road blocks on the journey to early retirement, simply because paying it off demands so much of your monthly income. If you’re making the minimum monthly payments on your student debt, there’s a chance you’re not even paying off the interest. Most people looking to retire early try to stay ahead of that by putting larger sums toward their debt every month. This, of course, slows down their savings process, but the sooner they’re able to eliminate their debt, the sooner they can put significantly more into savings each month.

2. Living beyond your means.

An obvious wrench in your savings plan is spending more than you earn. Those pursuing early retirement tend to significantly reduce their luxury spending in favor of funneling more into savings each month. This often means cutting out an annual vacation, cooking at home rather than getting takeout most nights, and reducing self-care spending. Often people pursuing early retirement will change their social lives in order to accommodate their savings goals. (This doesn’t mean never seeing friends, it just means eliminating expensive nights at overpriced bars in favor of potlucks and cheaper activities.)

3. Maintaining a high cost of living in an expensive area.

Among the community working to achieve early retirement, there is some debate as to whether it can be done while living in an expensive city. From the Boston-based Frugalwoods to JP Livingston (who retired at 28 in New York City), there are plenty of examples of those who have made early retirement work while living in an expensive area. And of course, the argument for living in a big city is that it keeps you close to well-paid job prospects. However, it’s definitely true that if you live in a high cost-of-living area, you will have to make sacrifices in order to accommodate your budget. For example, Livingston shares a 325-square-foot apartment with her husband. Others chasing early retirement move out of big cities in order to buy a home they can pay off more quickly, and ensure that they aren’t throwing too much of their income toward expensive rent.

4. Paying for services you could do yourself at a significantly reduced cost.

Thriftiness is definitely a quality that runs in early retirees’ blood. From interviewing a handful, I’ve been schooled in the importance of YouTube videos to learn how to fix home appliances, and what days of the month are best to secure cheap, good-quality furniture from your neighbors.

5. Not having a side hustle.

In general, I find the “if you don’t make enough money, make more” narrative frustrating, because it’s just not always possible. However, if you’re trying to build a lasting nest egg and you’re working a mid-level job, it may be necessary. Nelson White started a side business selling cars, which proved to be a lucrative business he could run while finishing his undergraduate degree. The Nunleys both started an athletic side hustle so they could bring in extra money, and eliminate pricey gym and yoga memberships from their budget.

6. Only prioritizing your nest egg, without focusing on other financial aspects of your life.

Saving, of course, needs to be top of mind if you’re trying to put away enough money to retire early. However, putting all of your savings into an investment account without having cash on hand is risky. Regardless of how much you make, or how much you’re able to save, you need an emergency fund that ideally covers six months’ worth of expenses. If an unexpected bill comes up, you want to be able to take care of it immediately, so it doesn’t throw your savings plan too far off course.

7. Not budgeting for later-in-life expenses or children.

Raising a child born in 2015 from birth to age 18 will cost $233,610, not including any college or private school costs. Often those pursuing early retirement want to do so in order to spend more time at home once they have children. However, if you’re planning on having children, even the most financially savvy household will have to up their savings to cover costs. To allow yourself to retire early and have children, you may have to set up a means of passive income, or adjust your timeline according to how much additional money you need to save.

8. Not entertaining the idea.

A lofty idea like early retirement is easy to talk yourself out of. However, when I interviewed Livingston, she said that anyone making more than $50,000 a year could realistically consider retiring early — and she was saying this from the perspective of someone living in New York City. The problem is most people write off the idea without even considering what their budget would look like if they tried to implement an aggressive, early retirement-bound savings plan.

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