Are you dreaming of taking a sabbatical year off work and traveling the world? Congratulations!
Let us tell you a little secret, it can be one of the best decisions you will ever make!
And yes, this comes from a financial planning firm! We are big believers that taking time off work to travel the world is not just a FUN and FULFILLING move… it’s also a SMART move!
Taking time away can help you better understand what you want in life, help you grow your career, open your mind, and grab opportunities in front of you. And believe us, it can make you ENJOY life so much more.
Done following the status quo? Let’s shake it up!
But to make sure it is a move you won’t regret later, you’ll want to plan it smartly! There are a ton of things to think through and prep before leaving. Don’t leave in a rush – take the time to plan your year off!
Ready to start making this sabbatical dream a reality? Let’s look at what you need to start paying attention to today so you can leave within the next 5 years!
Don’t leave in a rush! Plan your sabbatical ahead of time.
1. Define your sabbatical goal
Before anything, it’s important to start thinking about what you really want out of your sabbatical. Do you want to learn a new skill or a new language? Experience new cultures? Go somewhere inspiring to write that book you’ve had in your head? Take the time to get your own photography business off the ground? Or, do you just need the headspace to better understand what you want in life? The list is long and the goal of your trip will be unique to you. Don’t skip this step.
2. Clarify your non-negotiables
Get clear on your non-negotiables when traveling. Your sabbatical doesn’t need to look like anyone else’s, it can be very unique to YOU!
Does your destination need to:
- Have a good internet connection?
- Be in an English-speaking country? or a non-English speaking country?
- Be close to the ocean or the mountain?
- Have nearby healthcare facilities?
- Be kid-friendly? Budget-friendly?
Be clear about what you need to make your time enjoyable, but keep an open mind about possible destinations. Where you end up going might end up being less important than what you can do while you’re there.
3. Get clear on how your trip will look
Now that you know your non-negotiables, what destination(s) meet your criteria? Do you want to go to one place or move around often? Which type of transportation will you be taking? Do you want to stay in hostels or have your own room in a hotel? Or, do you want to rent a place for longer-term? Do you want to cook at home or go out?
Of course, it’s important to leave room for flexibility. You don’t need to have your entire itinerary planned out and all your accommodations booked in advance. That’s the beauty of going for a long period – you get to change your plans when you want to!
Getting clear on how you want your trip to look is an important part of your planning, and it’s crucial to getting a better estimate of how much money you will need. Even within a budget-friendly country, traveling by bus and staying in hostels will have a different cost than taking flights and booking Airbnb. Or maybe you will want to buy a car or stay in a van? All these decisions will have an impact on your budget.
4. Put together a reasonable budget
Once you have a better idea of how your sabbatical will look, you can put together a reasonable budget.
In your budget, make sure to allow room for flexibility. You can use resources like Nomad List to get an idea of general costs, but sometimes there are surprises – sometimes good, sometimes not so good.
Building a cushion into your budget should be part of the process. Your flight may get canceled and you have to pay for a new ticket (yes, this happens!). Or, you might meet a great group of people who invite you to sail for a few days – which would be awesome – but could add unexpected costs to your trip. Having a reasonable budget plus some cushion can allow you more flexibility in your sabbatical.
Make sure to also budget for the first few months of being back home. You’ll need time to get your feet under you and you may not be back to work right away!
5. Save smartly
Of course, leaving your job and having no (or little) income means you’ll need to have savings you can use and depend on. One thing you can do? Start saving NOW.
Since saving for a sabbatical has a different timeline than traditional retirement savings, your savings strategy will also look a little different. Key things to know:
- Where to save? There are penalties on early withdrawals from retirement accounts, so while it’s important to continue saving for retirement as you plan your sabbatical, you’ll also want to save to other types of accounts that you can use while you’re gone.
- Example account options:
- Savings Account
- Brokerage Account
- Employer Stock Plan
- Health Savings Account (HSA)
- KEY TAKEAWAY: Generally speaking, 401(k) savings are not the best option to fund your mid-career sabbatical.
- Shameless plug: This part can be complex because of tax implications, eligibility requirements, risk factors, availability of account types, etc. This is where we come in – we help our clients design their individual savings plan.
- What about investment? Funds that are invested in the stock market can lose value, so be mindful of the level of risk in investment accounts that you intend to use for your sabbatical.
- Yep, we can help with this too.
- Yep, we can help with this too.
- Make sure to have an emergency fund. Planning for the best-case scenario can be really dangerous. Always having a backup fund that you can rely on is going to give you peace of mind and save you in some situations.
6. Get rid of the unnecessary material stuff
On a more practical side, have you thought of what you will be doing with all your stuff? Going on a sabbatical means you will be living out of your suitcase for a while. You won’t be able to take everything with you. So what’s going to happen to all the stuff you have at home right now? Start being mindful of the things you accumulate.
Is there a place you can store your belongings? Will you need a storage unit? If so, less is better! Decluttering your house now and getting rid of unnecessary physical stuff will make you feel so much better. Less to worry about once you are away, and if you start doing it now you’ll get to enjoy a decluttered house before you leave, too!
Make sure to also not accumulate too much when you are on the road. Think about having to pack on the way back. Before purchasing anything while traveling, keep in mind you will have to transport it one way or another.
7. Write your to-do list before leaving
Write down the things you want to get done before now and your departure date. Some projects might require you to take multiple steps. The sooner you tackle that list, the more accomplished you will feel before the big day.
Here are some good examples:
- Eliminate debt
- Finish X project at work
- Get certified/licensed to scuba dive, ride a motorcycle, etc.
8. Get some practice
Feeling a bit overwhelmed with the idea of leaving? Get more and more familiar with the idea.
- Read the book Escape 101 to get step-by-step planning ideas
- Read books from others who have taken sabbaticals or find your community online
- Test the waters – Imagine an upcoming vacation will be longer than it really is. What would you pack? How would you plan differently? Would you want to stay in this place for a while?
We are so excited for you! Making the decision to go on a sabbatical is BIG and even though it is becoming more common it certainly isn’t mainstream yet! But, if you have that travel itch, one of the best things you can do is to listen to your intuition and start planning to make it a reality!
Don’t worry about the details or logistics yet. Just get the big stuff underway and start building your vision. This will make your next steps easier.
When your vision is clear, the decisions are easy
Need help getting started?
Want to make sure you are planning this trip in a way that will really support your dreams?
Get in touch with us!
We are specialized in financial planning for sabbaticals. As big travelers ourselves, we know it can be a scary move and we are here to help you feel liberated and supported as you plan to make your jump!
Send us an email at firstname.lastname@example.org or schedule a meeting now.
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