I had a well-paid job and climbed the company ladder. Then my marriage broke down and I needed to take an enormous pay lower. These are the frugal cash adjustments I made to outlive – and the way I’m now higher off than ever regardless of a a lot smaller wage

Facing career burnout and a marriage breakdown, Ian Betteridge knew he couldn’t carry on in his well-paid corporate job. So, he made a life-changing decision that would leave him £20,000 a year worse off.

During his 16-year-long career in product management, Ian, 44, held managerial positions in airlines, utility companies and the education sector, managing to hang on to them through nail-biting rounds of redundancies and economic downturns.

‘I dodged a bullet a few times in the rat race, especially working in the travel industry,’ says Ian, from Chertsey in Surrey.

‘From 9/11 to the financial crisis – any kind of world event affects the travel industry. But I managed to survive and my career even progressed. But the last challenge, Covid, was the final straw,’ he says.

The strain of the pandemic and the unexpected breakdown of his marriage sounded the death knell for Ian’s corporate life. He could not face the thought of staying on the same path until retirement.

But financial responsibilities weighed heavily on his shoulders.

Approaching his 40s, with two young sons, a mortgage and a ‘messy breakup’ to navigate – Ian had a tough decision to make.

‘I was at a crossroads in my life,’ he says.

Gardening had always been a hobby for Ian, from helping his mother in their garden at home to working in a gardening centre while at college. And, during the dark times he was experiencing, it had been his solace.

He decided to turn his passion into a business.

Ian knew he would be facing a big drop in his £57,000 annual salary but decided that, with careful planning, it was a risk worth taking.

He started by taking a forensic look at all his spending habits and his attitude to spending every last penny on luxuries he didn’t need.

Ian went through every direct debit and standing order in his bank account and reviewed his daily outgoings to look for ways to slash them.

His Sky Sports and Cinema subscriptions were cut immediately. Then he switched his broadband, mobile and energy providers to get cheaper deals using comparison websites. He also signed up for a water meter, so he could lower his bills by using less. Since quitting his job he’s saved on petrol costs and cut his holiday budget. His frugal actions have saved him around £350 a month, and he can still save around £200 a month into his pension.

‘I now know exactly what my outgoings are, so I know how much I need to earn,’ he says.

Lifestyle choices such as a car upgrade every two years, buying top-of-the-range trainers and taking four annual city breaks have all been sacrificed, too.

To get his business off the ground, Ian advertised weekend and evening gardening services through online platform Nextdoor, which allowed him to reach his community.

To wean himself off his full-time product management salary, he started his new business outside of his nine-to-five office job at first. It meant working seven days a week, and until 9pm during the summer nights, so that he could establish his new life.

After just two good reviews on the Nextdoor platform, the phone started ringing.

Within a few months, Ian had around 30 regular customers and felt financially secure enough to ditch the day job and leave his corporate life for good.

In the latest tax year, he earned £37,500.

Our wages typically peak between the ages of 40 to 49, according to the Office for National Statistics. This makes turning your back on a salary that’s likely to be the highest it’s ever going to be a life-changing decision.

Starting a family, career changes or taking a step back to care for loved ones can all have a massive impact on your earnings and should be planned for as far in advance as possible.

Claire Saunders, financial coach and owner of Mint Coaching, advises those facing a big mid-life income drop to use a three-step approach: planning, tracking and trialling.

‘Early planning creates calm,’ says Saunders. ‘If you’re starting a new career, how do you want your days to look and where are you getting your customers from? It’s important to work out a business plan and look for ways you can move gradually into entrepreneurship while still in your old job.’

If you’re cutting back to part-time hours to take on a caring role, map out what your new earnings will be, your pension entitlement, and research any benefits you may be eligible for.

Next it’s time to track your spending, says Saunders. ‘You need to get into the nitty-gritty, day-to-day spending – and separate essentials from non-essentials.’

Cancel any non-essential direct debits and switch, where possible, to cheaper service providers to claw back enough money to support your leaner lifestyle.

Household bills, insurance, debt repayments and your pension should all be considered essentials.

‘Your pension is key,’ says Sarah Coles, head of personal finance at investing platform Hargreaves Lansdown.

Predictions of the value of your future pension from your provider or online pension calculators will be based on your salary rising up until you retire. It’s important to run those calculations afresh in light of your new circumstances, so that you have a realistic view of your retirement pot.

‘Use an online pension tool to recalculate your retirement savings based only on what you can afford now, being sure to save as much as you can to put yourself in the best possible position,’ adds Coles.

The final step is to trial your new leaner lifestyle before embarking on it for good.

Practising living on and spending less for three months will show you what you are capable of. Is it too frugal to sustain? Could you make even more cuts?

You have the luxury of being able to make these adjustments ahead of time, before your earnings really drop.

And you will be building up a savings buffer while you practise, which can seed a rainy day fund or boost an existing one.

Two-and-a-half years into life as a full-time gardener, Ian says his money now goes a lot further than it used to. Looking back, he saw that he’d developed a bad habit for wasting money.

‘I’m on such a tight budget, so I’m much more aware of the deals I use and how much I’m spending.

‘If the old me had £800 to spare at the end of the month I’d think, “That’s a weekend away in Amsterdam or new trainers or a car upgrade”, because I could afford higher monthly payments.

‘The more money I had, the more irresponsible I became.’

With plans to sell his home and possibly downsize to a property with one less bedroom, Ian’s finances should become even more manageable this year.

‘It’s one more sensible decision as I try to simplify my life,’ he says.

Have you experienced a large change in income? Let us know at [email protected]