How to save and plan for a well-deserved break from your career
Every seven years, designer Stefan Sagmeister closes his New York studio and gives his entire staff a year-long sabbatical, believing the level of enthusiasm and creativity to be gained is invaluable to his business. In the below TED Talk, he explains the often overlooked value of time off and shows the innovative projects inspired by his time in Bali.
I’ve put together this post as I think it’s super important that when you’re considering a sabbatical that you will be in a better position if you can comfortably support yourself during the extended break (living within your means and travelling within your means!).
Timing your work break
For some people, it becomes obvious that working 80+ hours a week in a high-stress environment can’t continue, so they just hand in their notice and quit. Others take time to plan and prepare for their break, making sure their finances are in place and their co-workers can manage in their absence (this is what I did, read more about that over here).
Having a way to support yourself while on a break is crucial, so your bank balance may have an impact on your timing. A good time to take a break could be when you’re made redundant (touch wood), as you’ll usually have an extra injection of cash to tide you over.
The risks of taking a break
I totally get that hitting the pause button on your career isn’t without challenges. The biggest risk is, of course, that it’s going to cost you money, especially if you dig into your retirement fund, or borrow against the equity in your home.
Some people might think of a sabbatical as an early taste of retirement and therefore are inclined to spend some of their nest egg. If you’ve paid off a percentage of your home loan then borrow against it, you’re effectively going back into debt again. It’s a risk, though you may well recoup that loss through applying yourself more effectively once you’re back at work.
Even when your finances are in order, you might also be the type of person that may want to consider what time away from your job will do to both your position in the company and your longer-term career prospects.
You could nobble your career by taking a long break, but again, that depends on what you do with the time. Spending it on activities that revitalise your creativity, or gaining an MBA or other qualification in your line of work, could alleviate the career risk because you’re advancing yourself.
Five ways to fund your career break
For those who are not likely to be made redundant – or who want time out without resigning – here are five ways that you may be able to fund an extended break from work:
1. Save, save, save: Saving enough money to cover your expenses for a few months can take time, so if you’re not quite ready to make the move then putting aside every spare dollar into a savings account is a good way to fund your break. This might also teach you how to live more frugally, which will be handy when you’re living on reduced funds.
2. Talk it over with your employer: Attitudes in the workplace are changing. Bosses may not all be like Stefan Sagmeister, but many employers realise that if they want to keep their best employees, they might sometimes need to give them extended time off, paid or unpaid. If you plan to spend your break doing some career-related study, your employer may be happy to accommodate your plans. Alternatively, if you want the time off to travel or volunteer, see if you can add accrued leave to your annual holiday so you can take a longer break.
3. Tap into existing savings: Sometimes you just have to get away and rely on your ‘rainy day’ funds.
4. Sell an asset: Here’s an example, lets call this lady Kelly: Having a business she no longer wanted to work in was the perfect saleable asset for Kelly, who had been a vet for 15 years before deciding she’d rather work with marine mammals. Between the proceeds from the sale of her veterinary practice and her partners income, the family was able to absorb the disruption. Three years on, she is living her dream life, spending part of each year in the Antarctic as a marine biologist. It’s wise to consult with your financial planner before selling an asset, however, so you understand the long-term implications.
5. Get value from your home: Naturally, you’re going to need somewhere to live while you’re on a break, but it doesn’t have to cost a lot of money. If you want to get away, list your place on Airbnb or consider joining a house swap website. Alternatively, lease your home and house-sit in another part of the country or world.
Whether you need to rest, recharge or refocus, a sabbatical might be calling your name. And if you go back to work with renewed enthusiasm and higher qualifications, or into a new career you love, you might find you’re better off for taking the break.
Originally published on our Melbourne Blog here.