by Jermaine Koh
If you’ve only got a minute:
- Think about how your time away might affect your career path. Stay connected to your network and plan ahead for your return.
- Make sure your sabbatical doesn’t throw off long-term goals like retirement, home ownership or other major life plans.
- Set a realistic budget that includes both essentials and unexpected costs, so you can enjoy your break without worrying about money.
A sabbatical can be a transformative break – an opportunity to rest, discover new interests or focus on personal passions. But while the experience can be enriching, many overlook the financial preparation needed, which can lead to unexpected setbacks.
This guide offers clear, practical tips to help you manage the money side of taking time off, so your sabbatical can is rewarding both personally and financially.
Before you take that break
1. Factoring work into your sabbatical plans
Don’t wait until the last minute – start the conversation with your employer early. Being upfront gives you space to explore different options like unpaid leave, part-time arrangements or working remotely during your time away. It also shows you’re still committed to your role and responsibilities.
Think about how your sabbatical could actually add to your career. Whether you’re picking up a new skill, volunteering in a similar field or gaining exposure overseas, these experiences can boost your skills and make you more valuable professionally.
To keep your career momentum going, share your journey on platforms like LinkedIn. Regular updates about what you’re learning or doing help you stay visible, and more importantly, position your sabbatical as a time of intentional growth – a story potential employers or current colleagues will respect.
Coming back after a sabbatical can be more challenging than expected. You might feel out of sync with your team, unfamiliar with new tools or workflow or even experience a slowdown in your career momentum.
To make the transition easier, stay engaged during your time away. Keep in touch with colleagues, join virtual industry events or take part in online professional communities. These small efforts help you stay connected and informed about changes in your field.
When it’s time to return, consider easing in gradually by starting with part-time hours or taking on a short-term project. Thinking ahead about your re-entry can reduce friction and give you a better chance of turning your sabbatical into a stepping stone for growth, not a setback.
3. Neglecting long-term financial goals
While planning for extended career breaks, it's crucial not to lose sight of your long-term financial goals. A common mistake is to focus solely on financing the break period without considering the broader impact on your financial future.
To maintain your long-term financial health, review your overall financial plan and adjust where necessary. Consider how periods without regular income might affect your goals and plan accordingly. You may need to increase your savings or investments before or after a break to compensate for these gaps.
Don't overlook other financial objectives, such as property purchases or saving for retirement. For example, if you're aiming to buy a home in the future, you might need to extend your savings period or explore alternative funding options.
Similarly, for retirement planning, you may need to increase your contributions to retirement accounts before or after your career break to make up for the period without contributions.
4. Underestimating preparation time
One of the most common mistakes in sabbatical planning is not allowing enough time for financial preparation. Failure to recognise that effective sabbatical planning may require months of strategic planning and rushing this process can lead to inadequate savings and potential financial stress during your break.
Ideally, begin your financial preparations at least a year before your intended break. This timeline allows you to:
- Set realistic savings goals
- Implement strategic financial models
- Make necessary adjustments to your current lifestyle
5. Inadequate budgeting and savings
When planning a sabbatical, one of the most significant financial mistakes you can make is not creating a detailed budget for the period.
Start by evaluating your current financial situation, including your savings, investments and debts. Create a detailed budget of your expected expenses during the sabbatical, factoring in both fixed costs (like living costs, mortgage or rent) and variable expenses (such as travel and activities costs).
It's easy to underestimate how much you'll spend during your break. Make sure you research the cost of living in your destinations and factor in potential increases in expenses.
New expenses can arise unexpectedly, such as medical emergencies or changes in travel plans. You should include a buffer in your budget for these unforeseen costs. This safety net provides peace of mind and flexibility during your break.
Before starting your sabbatical, you need to set a clear savings goal based on how long you plan to be away from work. This will help you ensure you have enough funds to cover your expenses.
It's important to keep your sabbatical savings separate from your emergency fund (3 to 6 months of expenses). This way, you won't deplete your emergency reserves during your break. Consider setting up a dedicated "Sabbatical Fund" to track your progress towards your savings goal.
You might find yourself needing to cut your sabbatical short or taking on debt to cover unexpected expenses if you don’t plan your finances carefully.
6. Unrealistic goal setting
You might be tempted to pack your schedule with numerous activities, courses or travel destinations. However, this approach can lead to burnout and potentially diminish the rejuvenating effects of your break.
The reverse is also true. Avoid plunging into a sabbatical without planning ahead. My friend’s 3-month sabbatical experience is a case in point. He was unable to tear himself away from work and spent the first month of his sabbatical answering work-related emails. He only started planning his trips in the second month and managed to travel in the third month.
Instead, aim for a balanced itinerary that allows for both meaningful experiences and downtime. For example, if you're planning a 3-month sabbatical, consider dedicating one month to a specific project or course, one month for travel and one month for reflection and relaxation. This balance helps ensure you return from your sabbatical feeling refreshed rather than exhausted.
Flexibility is key when setting goals for your sabbatical. Be prepared to adjust your plans as new opportunities arise or if you find certain activities aren't as fulfilling as you'd hoped.
Bear in mind the purpose of a sabbatical is often to break away from rigid schedules and allow for personal growth and discovery.
7. Leveraging assets and resources
Consider accessing your assets and align them with your sabbatical needs. This involves evaluating the liquidity of your investments and considering how they can support you during your time away from work should the need arise.
For instance, you could explore options to generate passive income from your existing assets. If you own a property and live alone, consider renting it out on platforms like Airbnb while you're away. This can provide a steady stream of income to support your sabbatical expenses or savings in general.
Thoughtful planning is key to a successful sabbatical. By addressing career and financial considerations and avoiding common pitfalls, you can return refreshed and ready for new challenges!
