2 thoughts on “Budgeting that works: The Money Principle Way”

  1. Good principles, but I’d be more cautious on the emergency fund. Statutory redundancy is not particularly generous, and more and more companies are cutting back on enhanced provisions. The same goes for maternity and sick leave. Overpaying your mortgage is a good way of addressing both the emergency fund and millionaire fund… It is investing, but also means you can take a mortgage holiday if things get tough, to you decide to take a full year’s maternity leave … And right now, if you’re on variable rate it’s pretty cheap to overpay, probably a better investment than savings.

  2. Valid points, Victoria. And I did say that people should adjust the proportions according to their situation. What I find interesting is that people who have loads of ‘negative wealth’ are building six months expenses emergency fund. And although I agree that the statutory redundancy is not generous it still in most cases can cover between three and six months living expenses (basic expenses should be considerably less than earning anyway).

    I would disagree on the mortgage. My position on this one is that although it should be paid off this is after building serious cushion fund and investments. But this is another conversation.

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