MONEY Talks
What are the true costs of sabbaticals and career breaks?
Taking time off work comes with a price tag. To begin, let's look at three types of breaks, which vary widely in costs:
1) Paid Sabbatical Time.
2) Unpaid Sabbatical Time. (you return to your job or business)
3) A Career Break (you leave your job).
Most people fall into category #2 or #3. They are responsible for the bills while they are not at work. The difference between #2 and #3 is you need to budget extra for making your way back into the workforce.
A few basic steps to assess the costs and planning for sabbaticals and career breaks.
1) Calculate how much money you currently spend.
Dive deep. Learn what you spend each year, each month, and each day. Understand where that number is coming from.
2) Get your finances in order.
There are books and books written on this topic by professional financial advisors. If you’re a millennial (or just relate to millennials) check out Society of Grown Ups as a starting place. They even offer a free financial check up. You need to have your finances under control before you have a luxury of a career break. The advice will vary, but a(n overly) simple summary: a)have an emergency account set aside b) put at least 15% of your money into a retirement fund, and c) take all necessary steps to pay down any outstanding loans quickly d) under no circumstances should a break/sabbatical be funded by going into more debt.
3) Think about the who, what, why, and how of a career break or sabbatical. Figure out what’s the price tag.
Why are you taking a break? (Check out the excellent Bootsnall guide to taking a career break). Where will it take place? And of course, how much will this cost? A goal to set: the cost of your time off should be less than your current spending. Set an amount of money you’ll need for this trip. Add at least a 10% cushion. If the number is just too high, think about revising what you want to do and where you want to go.
4) If you are taking a career break save 3-6 months of your living expenses for a “readjustment period.”
If you run low on career break funds, don’t take from this readjustment fund. This is the fund that’s going to keep you sane and confident while you look for a new job. Be prepared for the living expenses you’ll be responsible for when you begin your job search. You might choose to reduce your living expenses dramatically while you’re job searching.
These funds could be more than the funds for the break itself (we budgeted more money for the readjustment period than we did for our sabbatical). You’ll want to feel comfortable spending money while you’re job hunting. Save money for this. Maybe you won’t need it because you’ll quickly find a job. But a key to pulling this off is to avoid feeling like your life is on hold while you’re job searching. This is about reducing stress not adding to it!
Taking the road less travelled while on a career break. Walking in the Caucasus mountains in Georgia from Ushguli to Mestia in the company of mostly cows.
Finally, the biggest price tag has yet to be discussed. It’s not the cost of living during your sabbatical or career break; it is the salary you don’t earn for that time period. It’s terrifying math. You will need to make your peace with the money you give up.
Our experiences taught us time is our most precious resource. We are willing to take on the trade-offs that come with decision to leave secure jobs to have this time together with our families, with our friends, and to physically travel to challenging places. The equation for time, health, and quality of life is messy, emotional, and personal. When you are confronted with the decision to move forward and the daunting price tag, think about time.
Time is a valuable currency. It’s yours to spend how you wish.
““You can get more money, but you cannot get more time.” ”
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