9 MIN READ
Taking a sabbatical leave can be completely fulfilling if you plan correctly.
Sabbatical planning means looking as far as a year ahead and determining how you'll cover your regular expenses plus the cost of your plans while on leave.
Whether you'll take the money from your retirement accounts, savings or rely on income from the gig economy to keep you afloat, the key is to plan appropriately to go ahead with your plans.
Related Article | The Finance Dictionary: Learn the jargon your Finance friends speak!
What Is a Sabbatical?
You might wonder if a sabbatical is the same as an adult gap year.
They are pretty similar, but a gap year typically means taking a year off school, and a sabbatical means taking a year or extended period off work to learn a new skill, unwind, or take time to care for something big in your life.
A sabbatical could be one month to one year or longer. Of course, the longer the sabbatical leave is, the more financial concerns you'll have, and the less likely you'll keep the same job.
But with proper sabbatical planning, you can create a plan that works.
Related Article | Foreign Workers: Can I Take a Sabbatical From Work?
Considerations for Planning a Sabbatical
When planning a sabbatical, you may be concerned about how you'll manage your finances, if you'll be able to stay with your current employer, and how much time you can afford to take off work.
What To Do on a Sabbatical
First, consider what you'll do on a sabbatical. This will help with your sabbatical-taking planning. Knowing what you want to do will help you understand your finances and whether your goals are possible.
Dream big and write down any plans you wish to do, but be prepared to tailor back the plans when they don't fit into the big financial picture.
Some ideas of what people do on sabbatical include:
- Pursue passions - Consider any desires you've had but haven't had time to fulfill because of your busy work schedule, such as mission trips, traveling abroad, or anything else you've wanted to accomplish.
- Learn - Some people take an extended break from work to return to school and get the degree they never had time to get, whether to start a new career or earn a promotion in their current job.
- Cross of bucket list items - You can use the time off work to cross off major bucket list items, like completing a marathon, cycling across Europe, or anything you desire.
- Raise a family - Sometimes, a sabbatical plan is necessary to raise a family so one parent can stay home and raise the children during the most crucial years.
How Long Will Your Gap Year for Adults Be?
This is the harder decision. Knowing what you want to do lets you dream big, but now reality sets in, and you must realize whether you can take off a few months or longer.
Look at your goals and decide how much time you'd need to complete them. Another key factor is what your current employment contract states if you think you can stay with your current employer.
Some companies have a sabbatical policy, but most don't, so you'll be at the mercy of your company's policies regarding extended time off and unpaid leave.
Consider the reasons you're taking time off and see what your company offers, including:
- Maternity or paternity leave for raising kids.
- Time off to care for sick relatives.
- Time off for vacation or personal days that you may be able to extend.
As you decide how long your gap year will be, consider your company's peak season. You'll have a higher likelihood of approval of the time off if you schedule it around when the business is the slowest.
How Will You Finance a Sabbatical?
The final factor in creating a sabbatical plan is your sabbatical finances. In other words, how do you pay for the time off or trip?
First, determine how much the plans you created will cost, especially if you're traveling or returning to school.
Take the total you'd need, and look at the following factors to ensure you'll have enough money:
- How much money do you have saved?
- Will you receive any pay from your employer, such as vacation pay or any other type of leave?
- Consider how much you can cut your living expenses and food costs, even if traveling or living elsewhere.
Next, look at your fixed, variable, and extra costs:
- Fixed costs - These are costs you'll incur even if you aren't at home but plan to keep, such as mortgage, real estate taxes, and homeowner's insurance. You should also consider things like existing debt payments, health insurance, and other normal expenses.
- Variable costs - Costs you can't predict but will incur, like food, healthcare, clothing, and activities, fall under variable costs.
- Extra costs - These are the costs you'll incur directly due to your plans, such as flights, hotels, activities, or even tuition to return to school.
Related Article | How To Pick Visitors Insurance For Parents Visiting the USA
4 Steps To Proper Sabbatical Planning
Many factors play into sabbatical planning, but these simple steps can help you achieve your dreams and life goals.
1. Research Your Employer's Rules Regarding a Sabbatical
Your employer's policies will be important in what you can afford. Talk to the HR team to discuss any possibilities of taking a sabbatical.
For example, you may be able to exhaust your vacation time, personal days, and sick days before you must take an unpaid leave. The key is to start planning early so you know what you have.
Don't be afraid to do your own research and read your employment contract to find any ways to get help with your sabbatical leave.
2. Determine What You Want From Your Sabbatical
A sabbatical isn't a vacation. It's a time to achieve personal development, which could mean many different things.
For some, it's to learn a specific skill to get a better job or start a new career. Others take the time off to find themselves, raise a family, or unwind after a particularly stressful time.
Consider whether you'll work on your sabbatical, take advantage of remote work, or want to be off from work completely.
3. Consider Your Insurance Needs
Longer sabbaticals require you to consider important factors like insurance and whether you will leave your job or find a new one when you are done.
Talk to your employer about your health insurance options. If you are on unpaid leave, you might have to use your COBRA benefits to keep your health insurance.
But if you can't keep your health insurance, you should have a replacement to protect you should anything happen.
If your sabbatical plan includes a lot of traveling, you may consider travel insurance.
This can protect your finances if your travel plans go awry or even if you travel to other countries and your domestic health insurance doesn't cover any health issues that occur while you're abroad.
4. Create a Budget
You'll have an entirely different budget when you are on a sabbatical versus working full-time. Not only will you be living a different lifestyle, but you'll have different (if any) pay.
Think of all the expenses you'll have at home even while you're away, plus the new expenses you'll accumulate during your travels. Create a realistic budget and track how you do with money monthly to ensure you're on track.
Planning Your Return To Work After a Sabbatical
If you left your job before going on a sabbatical, you will likely need to start the job-hunting process long before your sabbatical ends, including preparing for a job interview after a long break.
If you use your time off to learn new skills or return to school, you can focus your efforts on your new career path and next job.
However, if your time off wasn't to pursue career goals, you could still use your experiences and time to start a new career or return to your original career path.
If you plan on finding a new path, you can keep in touch with your networks by:
- Networking on LinkedIn.
- Having conversations over the phone.
- Attending events around the world within your industry.
Afterward, update your resume to focus not on your time off but on what you accomplished, making you an even better candidate for a company.
Related Article | Work From Anywhere Jobs: Myths, Benefits, and Drawbacks
Tips for a Successful Sabbatical
Taking a sabbatical can be fun and scary at the same time, but here are some tips to make it successful.
Create a Home Base
Taking time off will feel weird for a while, especially if you've been working full-time for a long time.
If your sabbatical includes traveling, consider having a home base or one location you can go and feel comfortable if you step too far outside your comfort zone.
This could be your home, with a relative, or somewhere else you feel comfortable with.
Plan as Much as Possible
It's impossible to plan 100% of what you'll do or what will happen, but the more detailed your plans are, the easier it is to make your sabbatical plan work.
Include plenty of Plan B's in your plans to ensure you have backups when things don't go right. This way, you'll get the most out of your time off, whether you travel the world or take a break from your busy life.
Keep a Journal of Relevant Experiences to Your Career
A journal is always a good idea, so you have something to look back on when thinking about your experiences.
The log also helps you craft a better resume when you start the job search again, especially if you want to create a new career.
Keeping the focus off your time off and on the experience and new skills you've gained will help you in your journey.
Take Advantage of Lower Tax Brackets
If you have investments or other income you've put off taking because you were in a higher tax bracket, you can plan accordingly and take advantage of the lower tax bracket during your sabbatical.
If you have no income, you won't have taxes, which can save you a lot of money on anything you've deferred, and is usually a once-in-a-lifetime opportunity.
Taking a Sabbatical Can Be Life Changing
The right sabbatical planning can help you have the time of your life. You'll likely leave your comfort zone, learn new skills, and become a better employee.
When you take a sabbatical, you may also change in other ways, realizing tremendous personal growth just by taking time away from the daily grind.
Before you do, be sure to plan your finances, know what you can spend, and plan when it ends to make the most of your time for personal and professional growth.