10 Things That Slow Down Your Progress To Financial Independence

10 Things That Slow Down Your Progress To Financial IndpendenceThinking about and putting into action ways to pay off debt, save money, and invest come naturally to those who are bent on bettering their financial situation. We tend to think if I do such and such then I will accelerate my savings by this or that amount. Perhaps by looking at what holds us back from accomplishing our financial goals, we can start to recognize what our weaknesses are and work on strengthening those weaknesses. Let’s look at 10 things that slow down your progress to financial independence.


1. Eating Out

I once read that eating out for the middle class is called “low-hanging fruit”. After thinking about this for some time, I came to realize that this statement makes a lot of sense. You get off work, feel tired, and don’t feel like cooking. Solution: go out to eat. It’s just so easy. But it comes with a price. Actually, the price is quite high. Let’s say you go to a mid-range restaurant with your significant other. You both order one drink, a main meal, and either a dessert or an appetizer. In our town you would pay approximately the following:

$6 appetizer, $10 main meal x 2, $5 dessert, $6 drink x 2

Total = $43

PLUS tax, PLUS tip!! Yikes. This meal would end up costing close to $55! Now, imagine you go out to eat at least 3 times a week (maybe more). $55 x 3 = $165 x 4 weeks a month = $660 x 12 months a year $7920. You can see where I’m going with this. Eating out is so easy, but burns a hole in your pocket if done on a regular basis. Think of how much you could chuck into your savings or investments if you cut back even 50% of your eating out. You would accelerate your financial independence goal exponentially.

Don’t let eating out slow down your progress to F.I.

2. Lack of Planning for Major Life Events

Planning financially for big events in our lives may sound daunting, but you will jump for joy when you have money set aside for a new baby or a move to a new country to name a couple. Not having money saved aside for specific life events (at least ones that we can plan for) is financial suicide.

For instance, my husband and I take long trips every summer. We used to just use our last paycheck or two of the academic year to go abroad, but we have since started putting aside $300 – 400 every paycheck toward our trips. By doing this, we are able to pay for plane tickets, hotels, car rental, etc. in advance without worrying about everything at once. It’s a great feeling knowing that we have money set aside specifically for the purpose of vacation instead of juggling our money at the last-minute between travel and bills.

3. Buying a House

Yes, we just bought a new-to-us house. In hindsight, we probably should have just left it alone. We are pretty confident that if we sell our house in a few years, we will make a nice profit, but that means we have to find tenants if we decide to leave the country. Also, we are currently paying much more on a mortgage than we were on rent, which takes away from our other investments.

Sure, you can say that you are paying into a long-term investment with a house, but that might not always be the case. Jlcollinsnh wrote some pretty interesting articles related to this topic in Why Your House is a Terrible Investment and Renting v. Owning Your Home, Opportunity Cost and Running some Numbers. Take a look and decide whether or not your home is holding you back from F.I.

4. Failure to Budget

One of the biggest mistakes I made financially was not creating a budget and sticking to it. Quite frankly, I didn’t know how to make a budget nor did I realize I needed one. I wish I would have copped on sooner because I’m sure that I would have much more savings than I do now.

Sitting down (or standing up) and listing out everything that needs to go in your budget really isn’t as horrible as you might think it is. What’s more is that actually following a budget will save you so much money. You may not buy huge purchases that hold you back financially, but you may be nickel and diming yourself to death. Not knowing where your money is going is just one more way that helps slow down your progress to F.I.

5. Carrying Debt

This point is pretty self-explanatory. Having debt causes your F.I. plans to run like molasses. I can’t think of anything worse than having debt. It’s hard to truly imagine what life is like after you pay off your last loan, but trust me when I say that it is completely and utterly liberating. You no longer have to worry about those nasty loan collectors bothering you. You are free to do as you wish with your hard-earned money. Carrying debt is like carrying the weight of the world on your shoulders. It can also be overwhelming when you first start to dig yourself out of debt. My husband and I found that ‘snowballing’ our debt really helped us psychologically when we started paying down our loans. Give it a try and once you are debt free your savings will start to snowball, too, which will speed up your F.I. plans.

6. Goal-less

Do you give yourself goals every 6 months to 5 years? I like to give my husband and I goals for the year. Granted, they are loosely made and we are happy if we reach over half of them. When you make financial goals for yourself, you are holding yourself accountable for what you do with the money you make.

Those of you who think that not having goals is better, should think again. I never had monetary goals until I started on the path to F.I. Then I realized that having an outline of what and where we wanted to be financially made a lot of sense because it helped us stay the course with, first, paying off our debt, then our savings, then our investing. We are only human in that all goals will not be met 100% of the time, but with planning and a bit of thought, you can help yourself achieve so much more.

7. Giving in to ‘Wants’

Rent, the utility bill, and your school loan payment are due at the beginning of the month, but you just have to have those oh-so-very-expensive designer boots in the window of that fancy shop. Guess some of those bills will have to wait… Bad, little mouse! Giving in to those kinds of ‘wants’ when you have more important things to pay off can only lead to financial trouble.

Perhaps will power is what you think the answer is to staving off those ‘wants’ and paying the bills first. If you are good at telling yourself what to do and then actually listening to and following your own orders, then great. Do that. If not, (and this was me) then perhaps using the envelope system is a better choice for you. Using tangible cash really opened my eyes on how much I was spending on stuff I didn’t need and forced me to show more responsibility with my money.

Remember, giving into ‘wants’ is only something you should do when you are where you want to be on your path to F.I.

8. Giving Instead of… (saving, paying off debt)

I recently heard a story about a woman who bragged to someone I’m close to about how much she gives to those in need. This would normally be all well and good except for the fact that this same lady also complains about how much debt her and her husband have. This poses a problem.

Giving is an exceptional way, in my opinion, to use your money. Helping others improve their lives makes for a happier community. What isn’t so great is giving money you don’t have. How can you give money to charities when you yourself are in debt? In this case, the money you take home in your paycheck doesn’t really belong to you because you owe it to someone else. Not to mention that by giving money to others when you have debt prolongs your loan and forces you to pay even more in interest.

So, why not wait until you are debt-free? By the time you are debt-free, you should already have an established budget and since the loans are paid off, there will be a slot to fill so to speak. You can easily add a ‘giving’ category to your budget. Help yourself first so you can in turn help others. Giving after you are free of debt is going to get to you F.I. faster than if you give and still owe money to others.

9. Expensive Vacations

First off, let me just say that my husband and I are completely guilty when it comes to vacations. But in our defense, we are both from different countries and visiting the in-laws is a necessary pleasure that we both indulge in.

Knowing that expensive vacations can set you back by one, two, or months is the key here. Once we realized this, we took steps to save money when we travel such as

  • travel hacking our plane tickets
  • travel hacking our hotel rooms
  • purchasing rental cars when they have special deals
  • traveling light so we don’t have to pay for extra luggage
  • going to countries where the dollar stretches further with the exchange rate
  • using public transportation instead of renting a car when feasible
  • not buying useless souvenirs
  • shopping at local groceries instead of eating out or eating out at cheap, delicious, local places
  • not buying clothes but bringing only clothes we need
  • having a family member drive us to the airport instead of parking our car there

The list goes on and I’m sure you can think of your own clever savings tips, too. We travel to Ireland every year. Here are some money-saving tips we have found.

Now, going on vacation is not evil. If you are trying to get out of debt, then going on vacation just might have to take a backseat to paying the bills. Think of it as a means to an end, which is obtaining the financial independence in order to always be on a vacation. Not taking vacations doesn’t have to be permanent.

10. Savings Account Instead of Investing

Using a savings account to hold your money instead of investing your money is a crucial mistake if you are looking to reach financial independence. (For the record, I’m not a licensed anything in finance, but have read my fair share of books, blogs, etc. to form a very strong opinion on this topic.) Let me give you a very real example of why.

I have a savings account opened at a federal credit union in my town. I love my credit union. They are friendly and go out of their way to make me feel welcome and special. My savings account now earns 0.15% interest. Not even 1%. I just received my dividend payment on $1.92. Now let’s look at our Vanguard VTSAX account. It pays a dividend of 2%. This doesn’t seem like a lot, but really adds up over time. Our last dividend payment from Vanguard was over $289. Granted we have more invested in Vanguard, but as you can see it earns us more than a typical savings account.

Add into the mix the fact that you can earn money through capital gains with investing and then reinvest said capital gains. Sure there will be ups and downs with the stock market, but over the long run, if you stick to your guns and don’t panic, the compound interest you earn will help your investments grow faster. What better way to work towards F.I. than having your money work for you. Passive income is awesome. If you want to read more about the stock market and everything related in an easy to read and entertaining way then you really must check out jcollinsnh’s stock series. So amazingly helpful and a perfect read to put your mind at ease for new investors.


In order to move forward towards financial independence, you must take a step back and think about what is slowing you down from reaching this goal. What are your weaknesses or temptations? How can you get the ball rolling to change the way you spend and save money?


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