What Lifestyle Sacrifices Should An Entrepreneur Make?

One the challenges I see on a regular basis is potential entrepreneurs trapped by their middle class lifestyles. You know what it looks like: nice house with a mortgage, good cars with car payments, great vacations, oh, and anything the kids want for school and sports. The money adds up quickly.

I was reminded of this recently when hearing the background of Clark Howard. Growing up, he attended elite private schools in Atlanta and went to an expensive private college, all the while thinking his family was wealthy. Only, at Thanksgiving dinner his sophomore year of college his dad said he had bad news: he lost his job. Clark thought no problem since they had plenty of money. Only they didn’t. His family spent all the money they made living an upper middle class lifestyle and now Clark was on his own to pay for college. This changed the course of Clark’s life. After graduating from college and working a few years for IBM, he started a company, sold it at age 31, made enough money to retire to the beach, and then found his true calling as a personal finance guru, which he’s been doing for 25 years.

When talking to entrepreneurs that need to make lifestyle sacrifices to start a company, there are a number of ideas:

• What lifestyle changes can be made to make it so that you and your family can live with half the income (e.g. if they made $100k/year, how can they live on $50k/year)?
• How long will it take to save up 24 months of personal cash reserves, assuming a reduced lifestyle?
• What immediate changes can be made now, regardless of becoming an entrepreneur, that will make for greater financial security in the future?
• How supportive is the spouse / partner to make significant lifestyle changes to facilitate a startup endeavor?

Lifestyle sacrifices are never a fun topic but they are a critical one for entrepreneurs coming from the trappings of a middle class lifestyle. There’s a balance in there but it’s often directed towards very limited spending so as to maximize runway.

What else? What are some other lifestyle sacrifices an entrepreneur should consider to start a company? For more personal finance ideas, check out Mr. Money Mustache.