Sabbatical Prep: [Financial] Planning for Your Extended Vacation
The dog days of summer are officially here, and if you’ve got a vacation on your mind, I’m right there with you! Whether it’s a weekend getaway, a staycation, or a legit vacay, just about everyone needs to get away from it all from time to time. But what if you could extend your time away from work before you reach retirement? I’m not talking about the standard two-week vacation. Ever heard of a sabbatical?
Traditionally, the sabbatical is an extended period of time away from work. Employers are increasingly offering sabbaticals as work perks to attract and retain top talent. It’s common for employees with this benefit to work for their employer for five to seven years, then receive the opportunity to take four to eight weeks away from work. The upsides include having a job to come back to and receiving a salary during your time away. Sounds pretty great, huh?
Still, sabbaticals come in many different shapes and sizes. Some folks who go plan to work full-time while they’re away and enjoy themselves on nights and weekends. Others keep working part-time to get the core pieces of their jobs done while traveling. Still others will do the basics, like check their email. And some step away from work life entirely.
While not all employers are able to offer their employees sabbatical leave in the traditional sense, that doens’t mean that employees can’t create their own! So, if you’re considering taking an extended leave away from work whether it’s a work perk or not, how can you prepare?
Since sabbaticals can vary widely from person to person, let me pose some questions in different areas to help you make the most of yours. While this certainly isn’t an exhaustive list, it can help you set your plan in motion — or at least make it feel a little more real as you begin to prepare.
The topic might be a tough one to broach with your employer. If you’re both employer and employee, you might not be able to drop everything and just go. And if you work for a small business, they might miss you dearly and not be able to function without you for weeks, months, or potentially even longer. A large employer that doesn’t offer a sabbatical benefit might need to replace you during an extended time away, leaving you without a position to come back to. But you’ll never know until you ask.
Before you bring it up with your employer, it’s important to create a plan — especially if that employer doesn’t have a set of rules surrounding this type of leave. Some things to consider and bring to the conversation include …
Where will you travel?
How long will you be away?
Will you work a little, part-time, full-time, or not at all?
Will you have internet and/or phone access that could allow you to work in the event of an emergency?
Once you get the go-ahead or give yourself permission in the professional realm, it’s time to make sure the numbers work.
While financial planning for a vacation is one thing, planning your finances around a longer leave is another entirely.
How will you adjust your cash-flow plan in preparation for your trip?
If your employer isn’t able to continue providing you with a salary, how will you secure health, dental, vision, and life insurance?
Do you plan to work in a remote capacity while you’re away? If you plan to work on location, what are your plans for securing a work permit if you visit another country?
Might you volunteer for all or a portion of the time to offset some costs?
For how long can you afford to travel, and how can you extend that time frame if you choose?
What are your plans for re-entering the workforce upon your return, if any?
What expenses will you need to factor in to make this happen?
How will you track your spending and maintain a budget while you’re away?
With the professional and financial out of the way, it’s time to focus on the day-to-day.
While your personal preparation here includes many of the “professional” and “financial” pieces, it goes far beyond.
Are you able to plan your sabbatical around important life or family events, like weddings, birthdays, and anniversaries?
How will you spend your sabbatical? Will you see the sights, stay close to your temporary home, or go adventuring? Will you learn a new language or skill or spend your time volunteering?
Based on those goals, where will you stay?
Will you go solo or with a group?
Are you staying long enough to need a visa?
How will you secure travel insurance and any necessary vaccinations?
If you take prescription medications, can you ensure access while traveling, or do you need to obtain an extended supply in advance?
What other supplies will you need to purchase in advance or while you’re away?
Who will care for your home if you’re a homeowner?
Will you rent your home in the short- to medium-term?
If you rent, will you time your sabbatical with your lease ending? How will you secure your next residence?
Where will you store your vehicle, furniture, and personal effects?
Will your child(ren) or pet(s) be traveling with you? Who will care for them if not?
How will you take care of paying your bills while you’re away?
With these life administration tasks taken care of, you know what you’ll be putting into your sabbatical prep. Now, what will you get out of your time away?
Aside from the whole “getting away from it all,” taking an extended leave of absence can have many upsides. They include …
Time to reflect on the myriad aspects of your life.
Reduced stress and anxiety.
A location, perspective, and mindset shift.
The ability to set new goals.
A chance to avoid burnout and return to work refreshed and reinvigorated.
And so much more!
Plus, knowing that you plan to work again post-sabbatical, it’s a great opportunity to test out financial independence — especially if you plan on traveling. Take some time to consider what you enjoy about your sabbatical and which parts of it you’d like to take into FI, whether it’s a traditional retirement or not.
Those perks aren’t just limited to travelers. Employers invest in sabbatical leave for their employees to keep them around, sure. But they also see happier employees who are more engaged with their work and even more productive. And one employee’s time away can be an opportunity for another in a similar or subordinate role to step up and shine.
Wherever you go and whatever you do, happy trails!
Don’t forget that you can stay in touch with your financial planning team here at FPFoCo by taking advantage of your unlimited meeting and consultation time. Just be sure to let us know if you’d prefer to receive calls or emails at a different number or address during your sabbatical. And be sure to check your time zone when scheduling any Zoom meetings!
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