Trying not to teach grandma to suck eggs
I have spent 30 years of my life paying rent: 6 years to landlords and 24 to a bank for a mortgage.
Thankfully, those days are over – we decided to overpay our mortgage once we were off a fixed rate deal because our interest rate had gone from 1.34% to 8.2% – as that was partially what we wanted to do anyway, but partially because we didn’t want to be accuring a large debt just from not paying attention.
Which might sound great, we suddenly had quite a bit of money left in our bank accounts each month but not actually working for us and helping us to retire early. Yes, I know I complained a few blogs ago about my beloved getting old before his time, but I do not want to be going out to work everyday while my beloved is at home on his own.
But what does a budget look like post-mortgage?
Most people use the 50:30:20 rule
- 50% towards needs: rent/mortgage and living expenses, including property taxes.
- 30% towards wants: leisure activities, entertainment, etc.
- 20% towards savings: funding future plans and investments.
Which is what we used to pay off our mortgage early but we were lucky to be earning relatively more than our other outgoings.
Post-mortgage, we can do something more interesting.
- 38% towards needs: rent/mortgage, working and living expenses, running vehicles for commuting and fun, including property taxes and energy payments.
- 30% towards wants: leisure activities, entertainment, etc.
- 32% towards savings: funding future plans and investments.
After-all, we’re not paying rent and can comfortably afford the essentials.
Same for the wants, largely we’re easily self-funding and don’t need anything more. We pay for holidays out of this money too.
Which is all well and good until your world gets turned upside down and you are made redundant. If you are lucky, you will get a pay out, the basic case is statutory or a maximum of 1.5 weeks’ pay for each year of service for each year you worked over the age of 41 years of age capped at 20 years: 30 weeks pay or just over six months pay.
Many firms do voluntary leaver terms (which you must physically accept), which can be up to a year’s pay.
You get £30,000 of that tax free, the rest may take you over your normal tax threshold though, so watch what you do with it.
If you are lucky, the notice period can mean you walk into another role. Or take a break with a comfortable month’s cushion.
But none of these are the same as having a job. For some, it can be the chance for rebirth, a chance to do something different. Some ease back and take on lesser roles, others spring board in to promotions that were hard to realise in their old firms.
Others go and found their own businesses. Sole traders do not need to make nearly as much money for tasks as bigger firms. Famously, a well known musician and programmer in our part of the world, paid for their home using the earnings from a game no-one would buy from them. What bought them a house was considered too small for the gaming firms to buy!
Life is rarely plain sailing, even a small wave can capsize your plans. It’s what you do afterwards that matters.
Posted: October 11th, 2025 under 42.