Almost 75% of Aussies aged forty-five and working want to retire in five years. By global standards, Aussies are much more in favour of retiring early, surpassed by only Argentina and France. However, harbouring the desire doesn’t imply most people manage to retire by the time they are fifty. Almost half of all those who want to retire early don’t go through with their plans. Those who are planning now have reportedly stated in many surveys that they don’t see themselves actually retiring although they strongly wish to do so.

The biggest hindrance in retiring early is financial. Most people are not financially equipped to work ten years less and don’t have enough saved up to keep living off their savings for decades. According to many surveys, around 70% of those wishing early retirement don’t have enough savings. Lack of savings is not the only reason though. Having dependents and existing debts are two common reasons why people choose to keep working.

• If you plan to retire early, you likewise plan accordingly and do so as soon as possible. Financial managers these days are suggesting that people plan for retirement the moment they hit thirty. That allows twenty good years and possibly the highest earning years to save enough for retirement. Twenty years would also be good enough to pay all debts, from home loans to car loans, raising kids to acquiring enough assets that will assure a healthy and prosperous retirement.
• You may want freedom, seclusion and may wish to travel. You may wish to pursue something you are passionate about or just want to have more time with your loved ones. There can be many motivations for early retirement. You may also want to start a business. Depending on what you wish to do and how you wish to enjoy your retirement, you must have appropriate goals.
• Saving alone will not help. It is advisable to invest in assets that would appreciate over time. From financial products to real estate, precious metals to any other type of investment that you have a penchant for, let your money double and grow instead of trying to stack up savings which will not grow by itself.

Making a household budget is quintessential to financial planning. It is rather simple to come up with a budget. You have your income, you can make a list of expenses you cannot avoid and then decide how much you wish to save every month. Accordingly, you need to cut corners somewhere, invest your money or save, try to increase your income and you should always look for smarter ways to save on unavoidable expenses. The real challenge is to adhere to a household budget. Here is how you can approach the whole daunting challenge of financial planning.

• Don’t spend money when you don’t intend to and don’t have to. Impulsive buying is the biggest threat to savings. Adhere to your grocery list, abide by the budget every time you wish to buy something and you would stick to the math.
• Be firm with your goal to save. This goal may be yearly, quarterly or monthly. But you must break it down to the least possible denominator. Put aside some money every week and that must be untouched savings.
• Limit your use of plastic money, especially credit cards. Use cash and you would naturally run out of it once you have exhausted your budget. To facilitate this, transfer the amount you wish to save from one account to another right after your pay cheque gets credited.
• Savings is a never ending exercise. You may not notice this but the little amounts you spend regularly on the mundane routinely coffee, lunch and snack outside actually end up costing you more than a thousand bucks. If you are living in a major city, then this cost would be up to two thousand and possibly more. Cut down on this expense and you could have handsome savings. Take a homemade lunch to work, avoid one cup of coffee every day or skip a few snacks or meals at fancy restaurants or expensive eateries when you can do without them.
• Avoid debts. From personal loans to credit card debt, all these commitments will cost you dearly. Do some math and check out how much you have paid extra in the last year or years as interest. This entire amount could have been your savings.
• Don’t shop on weekends. It may seem to be a daunting challenge to shop on a weekday or at a particular time on a certain day of the week but that is how you would get some amazing deals. Always try to buy in bulk. Today, most homes have large refrigerators. You may not have larger than life freezers but you can stock up at least a fortnight’s worth of food. When you buy in such bulk, you are bound to save anywhere from 10% to 30% off normal prices.