Has the thought of taking time off work ever crossed your mind. Heck, have you ever taken it a step further and dreamed you could take a full year off from work? This isn’t uncommon. In fact, more and more people are opting to take gap years or mini-retirements instead of waiting to retire at the ripe age of 65.
Sure, there are some risks involved like dealing with a financial hardship or having to explain a gap in your resume to future employers, but a lot of people are taking those risks and preparing accordingly. Taking a full year off work is similar to a sabbatical that could do wonders for your mental and physical health and even help you discover a new passion. If anything, the time off can allow you to do plenty of exploring or simply rest up and get back to focusing on what’s important. Either way, it can be an unforgettable experience.
Now that I’ve got you thinking, I’m sure you’re wondering how you’d ever be able to pull this off from a financial standpoint. Here are some important steps you can take if you’re trying to figure out how to afford to take a full year off work.
Calculate Your Current Income
How much is it going to cost you to take a full year off work? That is the million-dollar question (no pun intended). It’s no secret that in order to afford to take a full year off work, you’ll likely need to save.
Calculating all your income can give you a good idea of where you’re starting so you can determine a budget that helps you meet your goal. Add up your salary for the year along with any income you expect to earn from side hustles or bonuses.
Decide What Your Sabbatical Year Will Entail
Knowing your income will give you a good idea of how much you need to survive for a year. However, another factor will be knowing what you plan to do during your sabbatical year.
Will you travel? Couch surf or backpack around Europe? RV across the country? Will you have a nice long staycation and do a lot of volunteering? Determine what you want to do and develop a budget for it.
Consider how your finances will change and how much money you’ll need to get by and live comfortably for 12 months.
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Start Saving Aggressively
As you could have guessed, you’ll need to save aggressively to be able to afford to take a year off. Once you have a plan for your year along with a budget in mind and know your income, determine how much you’ll set aside each month to meet your goal.
Save more than you think you’ll need so you’ll have a nice buffer. No one wants to run out of money while they’re exploring a new country or simply trying to live their best life during a gap year.
See if you can pick up extra shifts at work or side hustle and funnel all your income toward savings. Another way to speed up the process would be to take all windfalls and stash the money into your savings account and lower your current expenses to free up more income.
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Lower Your Expenses and Consider Making Lifestyle Changes
Start lowering your expenses now in order to have a better adjustment period when you take a year off. Also, think about how your expenses might decrease during your gap year. If you typically earn $50,000/year but are aiming to save $40,000 for your year off, you will likely need to make some lifestyle changes.
For example, if you’ll be traveling a lot you may not need a gym membership. Or, you may even want to get a cheaper place to live if you’re renting which would be a huge way to save money during the year. If you were getting health insurance from your job, you may have to consider an alternative like a health sharing ministry which can actually be cheaper. Cutting back on a few regular expenses can be extremely helpful when you’re trying to save tons of money.
Have a Backup Plan
Always have a backup plan especially if you’re making a big decision to quit your job and take a full year off work. Being able to afford to take a full year off work sounds like a tough feat, but it’s definitely doable. Even if you can make it affordable, know that life is still unexpected and it’s best to do as much researching and planning as possible.
For example, if you find out your year off may be more expensive than planned, you can have a backup plan to side hustle online to supplement what you have saved up so don’t burn through all your reserves. I used to work at a job that gave extra paid time off each year. If you end up having to cut your year off, explore what options your job may offer to allow you to spend extended time away. Who knows, you may even be able to work remotely.
You should also keep in mind that you may not be able to jump back into work right away when you return. Sometimes it could take weeks or months to find a new job so make sure you are prepared for whatever twists and turns life may throw your way.
Have a Transitioning Plan
Just as you need a back-up plan, you also need to think about how you’ll transition back to normal life once you complete your year off. If you will have to start over with getting a new job, think about what field you’ll go into and how you’ll provide for yourself in the meantime.
I have a friend who moved abroad but was able to get a job there to supplement costs and was then able to move back in with family when he returned home. Just start brainstorming some ideas to help you with the transition afterward so you don’t go into the experience completely blind.
Have you ever thought about taking extended time off from work? How would you be able to afford to take a full year off work?