I see that the subscription can be stopped at any time, but if I am unable to afford the subscription after 6 months or a year what will happen to the tools that I have installed? Will they stop working all together? And if I am able to afford it after a couple months again will my old license still work (and I can update the tools if there were any updates) or will I need to get a new license entirely?
When you cancel your subscription, you won’t receive access to future releases of Unreal Engine 4, however your login will remain active, and you are free to continue using the versions of Unreal Engine 4 which you obtained as a subscriber under the terms of the EULA.
So, yes, if you cancel your subscription and renew it later, you will be able to get the updates.