I hear you.
I actually have always had a budget. I just hadnt gone through things in detail. I always just rounded things off to the nearest tenner or so.
Im correcting that now and going through statements and deciding what I need and what I dont need to keep.
What we did when I first heard of the redundancy was work out how much disposable income we have that is different to the amount we had before.
We still have good savings. What we used to do with the savings was pay 50% of it off the mortgage every year. And 30% into the college fund.
The college fund has enough in it now and there is no mortgage to pay off as of early this year. The investment mortgage will be paid off within the next month. It did have a few years left, but decided to just end it.
We saw those as expenses. Both gone now. So they would have cancelled out most of the savings in the past. Along with buying a new car a while ago. Looking back if I knew what I know now I wouldnt have gone for such an expensive car, but it will do us another 10 years or so
Pretty much made our minds to sell the other one.
So pretty much we have always been very comfortable and had a lot of excess cash which we invested. We havent led a frugal life by any means.
We just never were able to spend what we earned. So always had spare money at the end of every month.
So, deciding that we had plenty of cash left over after bills we used last December as our yardstick.
Income - expenses left us very comfortable at that time and at all times up to then.
A lot of expenses that we had then, we now dont have. So now Income - expenses leaves us with even more left in the bank account at the end of the month. I dont see a need for it to be any more complicated than that.
I know you mention holidays, but the way we always did it was we had a nice chunk of money in equities. We decided if it increased enough each year to go on holidays we would go and if it didnt we would skip that year. The way its worked out since we started doing that 10 years ago we have had at least 3 foreign holidays a year out of that and a few weekends away. This year all holidays are cancelled so dont have to worry about that this year.
Also my sister has an apartment in Spain that she lets us use whenever we want, so if we only had that it would only be the cost of flights really for a break away from Ireland, so holidays are not a problem for us either. We have only ever gone to that apartment with my sister and her husband for a week the odd year, but its open to us whenever we want it. I just never had the time before. The wife and kid have gone over a few times with my sister though without me.
As for the pension, you are close. It was 25%. There were also a few other things I had to pay into in work, that would have come out of salary too. But I never counted that money as income as it was never in my pocket to spend anyway. I realize that the pension will not be added to, but I feel if I leave it there it will probably grow a bit more. At the moment and for the foreseeable future I actually dont need to tap the pension.
When my wife retires we will probably draw down both our pensions.
Funny every time I speak to people who havent retired yet they ask me how I am going to fill my time. My answer is always the same "however I feel like it". That to me is retirement.
And ive spoken to lots of people lately who are retired, some younger than me. And not one of them is worried about filling their time. I dont think i'll will have a problem with that either. I have so much time now to do family stuff.
Ive done so much that I didnt have time for in the last 4 weeks. Fishing, Golf (dont think ill keep up the golf. Never liked it. But ive a few friends who i play with the odd time.)
Going to climb Carauntoohil with some friends next week, as well as a camping session for the week. Havent done that in 20 years. Really looking forward to it. Also going to get back into the hiking. Some people I used to do it with before I got too busy are in a local club, so i'll be down to join up there in the next few weeks.
But if im bored, and ive never ever been bored in my life yet (I just think of something else to do), I guess I could think of things to do that dont involve clocking in
Basically its all leisure time as opposed to wage slave time.
Anyway, sorry for the ramble. Thats just my long winded way of saying.
There is far more money left in the current account at the end of every month now than there was in any month up until the start of this year.
I know we have reduced savings and eliminated payments into one pension. We could actually increase the savings back up and still have more in the current account at month end. We might do that if we still have spare money.