So you graduated from college, and you have a good job making good money. You’ve been working for several years, and you start thinking about doing something different with your life. Maybe the “normal” progression of life (graduate, get married, buy a house, have kids, work until the age of 65, then retire) doesn’t appeal to you. Or maybe you’re just burnt out at work. Or perhaps you feel like you chose the wrong profession and need a break to think about a career pivot.
So you decide to do something different. Reeeeeally different…….. Like taking a Year Off work in the middle of your career to travel the world for a year.
So how do you begin planning? It seems like a pretty overwhelming task, doesn’t it? Don’t worry, you’ve come to the right place!
This page will educate you on everything you need to know about planning a mid-career sabbatical and help you prepare for the best year of your life. Proper preparation will minimize many of the risks associated with taking a Year Off and will help you get the most out of your time away from work.
Table of Contents.
- THE FINANCIAL ASPECTS OF TAKING A YEAR OFF.
- HOW MUCH MONEY DO YOU NEED TO SAVE?
- WHAT TO DO WITH YOUR HOUSE OR CONDO?
- CREATING THE TIME AWAY FROM WORK.
- DEVELOPING YOUR CAREER BREAK THEME OR PURPOSE.
- FINAL PREPARATIONS.
- ADDITIONAL READING AND RESOURCES.
1. THE FINANCIAL ASPECTS OF TAKING A YEAR OFF.
The financial aspects of a Year Off are arguably the most important. To minimize the financial risks, you should first pay off all debts. Then, you need to save money to cover all your basic living expenses for the year you are gone and any expenses associated with the pursuit of your greater life goals that you’ll pursue during your sabbatical. Finally, it’s important to get a good start on future financial goals, such as saving for retirement.
Step 1: Get your financial life organized.
Organization is an important part of preparing for a Year Off. You need to add up all your debts, figure out your yearly take-home pay, and figure out your yearly expenses. This will allow you to see where all your money is going and figure out ways to reduce your spending and save even more.
Check out this blog post to help get your financial life organized and this post to help with figuring out your income and expenses.
Step 2: Calculate your Year Off Age.
Once you have a good idea of your income and expenses, you can calculate how long it will take to pay off your debts and save the money you need for your Year Off.
This blog post goes into detail about how to calculate your Year Off Age, the age when you will have enough money to start your sabbatical. Once you calculate your Year Off Age, you can come up with a budget that will help you reach your goal sooner.
Step 3: Lower your spending.
Once you get organized, it’s time to lower your spending and save money. Check out the following posts for help with reducing your spending:
- 3 key ideas for reducing your spending: delayed gratification, eliminate/reduce/find a cheaper alternative, and avoiding consumerism.
- 10 ways to cut spending on your yearly expenses. – all those hard to remember expenses that pop up once or twice a year.
- 5 ways to cut spending on your monthly expenses. – your big monthly bills, like rent, utilities, and entertainment.
- 5 ways to cut spending on your weekly and daily expenses. – grocery store and coffee addictions and other weekly and daily expenses.
Step 4: Create an emergency fund.
So you got your financial life organized and you started saving money. What should you do with the money you save?
First thing to do is to create an emergency fund that will cover at least 6 months worth of living expenses. I think $15,000 is an excellent amount of money to shoot for. This will cover any unexpected costs like medical bills or car repairs. And it will act as your living funds until you find a new job if you don’t have a job to return to after your career break.
I think it’s best to keep this money in a savings account. You don’t want this money to fluctuate with the stock market in a mutual fund or stocks.
Step 5: Get out of debt.
The next financial step for anyone planning a year away from work is getting out of debt. This includes all student loans, credit cards, and auto loans. This is arguably one of the most difficult steps to accomplish, especially as a young professional. The cost of a college education continues to rise, burdening many of us with a large amount of student loan debt.
But I think it’s important to be debt free before your sabbatical. Check out my reasoning in this blog post about the Year Off financial risks.
If you’re still in college, do everything you can to minimize your debt. And if you’ve already graduated, well…… it’s time to buckle down and get it all paid off. Start out with the higher interest loans first then move on to the lower interest ones. Consolidate your loans if you can get a better rate.
Every extra dollar you make should be used to pay down this debt. Do what you can to reduce your spending so you can throw more money at your loans.
If you have credit card debt, pay that off before your student loans. Then start paying your credit card balance every month. I do think it’s wise to continue to use a credit card for every purchase you make. It’s possible to rack up a heap of airline miles or cash back that can help fund your year of travels. Or just get an American Express Blue card and use your points to purchase your daily essentials off Amazon.
You should pay off your car loan as well. If the interest rate is higher than your student loans, then pay it off first. If you lease a car, return it as soon as possible and buy a new or used car. Just don’t buy an expensive luxury car or a big gas guzzler.
Step 6: Stay out of debt.
Once you pay off your debt, it’s important to stay out of debt. That means delaying the purchase of a home until later in life. You should pay cash for anything you purchase or use your credit card but pay your balance off each month. If you need a new car, then you can buy it with a loan but make sure that loan is paid off before starting your sabbatical.
Step 7: Get a good start on your retirement savings.
This will help prevent any shortfalls later in life and most importantly, will help you take advantage of compounding interest for a much longer period.
So what exactly is a good start on retirement savings?
Some experts believe it’s important to reach a certain amount of money saved based on your age or based on a percentage of your yearly income. I don’t think it’s possible for many young professionals to reach this amount of money saved and still have the money for a Year Off. If you can, that’s awesome. If not, just plan on working a year or two more at the back end of your career to make up for that shortfall.
My best advice is to start saving a little bit of money in your 401k or IRA as soon as you start your career, even if you have debt. Start a payroll contribution, and at the very least, save enough to get your employer’s company 401k match. Pay off your debts and save for your sabbatical with all the leftover money. By the time these debts are gone and you have the money saved for your sabbatical, you will have a “good start” on your retirement savings.
2. HOW MUCH MONEY DO YOU NEED TO SAVE?
Once you get out of debt, it’s time to start saving the money you need for your year of travel. So how much money do you need to save?
I think $40,000 USD is a great amount of money to save. This is more than enough to cover all your day-to-day essentials like housing, food, and drink, with plenty leftover for fun and the pursuit of your big dreams. Check out my post How Much Does It Cost to Travel the World for a Year for a detailed analysis and breakdown of the costs.
It’s possible to travel for a year on much less. Read the book “How to Travel the World on $50 a Day” by Matt Kepnes. That works out to around $20,000 for a whole year of travel. Or you can travel for a shorter period, like 6 months instead of a whole year and save $20,000 for that 6 months.
But I think the best thing to do is to save $40,000 and travel for 1 whole year. You will have one heck of a time if you’re able to do that.
3. WHAT TO DO WITH YOUR HOUSE OR CONDO?
If you already own a home, don’t despair. A Year Off is still a very real possibility for you! You just need to find someone to rent it out for the year or you need to save the money to cover your mortgage, tax bill, and utility bills.
I do strongly suggest selling your home before leaving your job though. This will free up some money you can use to get ahead on your retirement savings or to fund your Year Off. And more importantly, you will free yourself from the worries of owning a home like the inevitable problems of home repairs and yard work.
4. CREATING THE TIME AWAY FROM WORK.
After paying off debt and saving the money you need for your Year Off, it’s time to figure out how to create the time away from your job and career. The two options are quitting your job and getting a leave of absence approved.
The main goal when creating the time away from work is to remove all worries about your job and career while you are away. Let’s take a closer look at what those worries might be and how to alleviate them:
- Making money – save up the money to cover all your expenses for the year so you don’t need to worry about making money while gone.
- Having a job to return to – if you get a leave of absence approved, you won’t need to worry about having a job to return to and you can focus on your main goals outside your career.
- Long-term effects on your career – many people might worry about future job advancement after taking a Year Off, but I believe the time away will actually help tremendously, especially if you learn new skills and exercise your creative mind while traveling.
Getting a leave of absence approved through your current employer is much better than quitting. You will have a job to return after your Year Off and you can pick your career up right were you left off. If you can’t get a leave of absence approved, then the only option is to quit. For a detailed look at a leave of absence and how to get it approved, check out this blog post.
5. DEVELOPING YOUR CAREER BREAK THEME OR PURPOSE.
Having a purpose or theme to follow during your travels will greatly improve your chances of having an incredible time while gone and making your time away useful. Remember, a Year Off is all about pursuing those greater life goals and dreams that are outside of your career.
So here are some tips for developing your Year Off themes:
- Think back to when you were a kid or teenager. What hobbies did you have then that you would like to pick back up today?
- What is something that you’ve seen other people do that you’ve always wanted to accomplish as well?
- Where have you always dreamed of traveling or living for an extended period?
- What current activities that you enjoy do you want to get better at?
6. FINAL PREPARATIONS.
Once you’ve reached your financial goals and started the process of getting a leave of absence approval, it’s time to start counting down the days until your Year Off begins. Here are some additional steps you need to take to prepare yourself for your journey.
Set your day 1 date for your Year Off and book something exciting.
This is arguably the most exciting step towards taking a Year Off work: figuring out your last day of work and first day of your sabbatical. Your employer will likely need a specific day when your leave of absence will begin.
Once the day is set, either book a flight somewhere or book an exciting activity. This will help you get excited for the year amid all the nervousness and uncertainty and will get you financially invested so you’re less likely to back out at the last minute.
For example, I knew I was traveling domestically to start my sabbatical, so I signed up to climb Mt. Whitney for charity a couple weeks after I started my leave. That gave me time to drive all the way out to California.
Figure out your travel style and general travel plan.
It’s important to think about where and how you want to travel and plan you general itinerary ahead of time. I think it’s best to break the year up into 4 parts. For example, the first 3 months you can spend domestically, then spend 3 months in Europe, then 3 months volunteering in Africa, then 3 months in South America. You can adjust how long you want to stay in each region based on your theme and what you want to do.
You also need to think about whether to travel solo or with someone. There are benefits to both and ways to do both, so don’t think too much ahead of time about it. Make sure you’re taking care of your own financial situation first and don’t wait too long for your friend to get their planning together to go with you.
It’s also important to figure out whether you’ll travel slowly and spend a longer time in each place or whether you’ll bounce around a lot. I think a combination of both is best.
For more help figuring out where to go, check out my What To Do and Where To Go page.
Figure out what to do about your relationship with your significant other.
If you have a significant other, you need to decide whether you want to stay in the relationship and travel together, stay in the relationship but travel solo, or end the relationship. This is something you should think about way ahead of time and be very up front and honest with yourself about. If you don’t see the relationship working out in the long run, then it’s best to end it.
Check out my post How to Take a Year Off as A Couple if you plan on traveling with your significant other.
Health insurance.
Unfortunately, paying for a health insurance plan might be out of the range of possibility for some people because of how expensive it is. If you have the extra money, then you should consider buying it. But if you’re young and healthy, I’m not so sure it’s worth the extra cost, especially if you purchase travel insurance (which I consider a necessity if traveling long-term).
Check out my post The Year Off Risks of Illness and Injury (and how to avoid them) to see what you might have to deal with while on the road, then determine whether you need health insurance or not.
Purchase travel insurance.
Travel insurance is necessary when traveling abroad and domestically. Check out my blog post on travel insurance. Then head over to World Nomad’s website to get a quote and purchase your travel insurance.
Looking for a comprehensive list of travel insurance companies? Check out consumeradvocate.org.
Immunizations.
Travel vaccines are essential before hitting the road. Start planning out your vaccines at least a year before leaving because some require multiple doses spaced 6 months apart. And make sure to get them while you still have health insurance to reduce the costs.
If you are traveling to an area with malaria, then make sure to get your anti-malarial medication ahead of time too so you can use your insurance. Get one last check-up with your doctor to make sure you’re fully healthy.
To figure out what travel vaccines you need, check out the CDC’s website and put in the countries you want to travel to. Even if you’re not sure where you want to go, put in any country you may want to travel to. Don’t limit yourself! Then head to your doctor’s office or local pharmacy or health clinic to get the vaccines.
Downsize and get rid of stuff.
Start getting rid of unnecessary things well before your day 1 date. You’ll need to move everything out of your apartment and either into a storage unit or someone’s attic or basement. It’s much easier if you don’t have a lot of stuff.
You can also look into selling some unused items on Ebay to help fund your year of travel.
Stop monthly bills and move out into the world.
By the beginning of your sabbatical, the only monthly bills you should have are a cell phone bill, car insurance bill, and health insurance bill (if you choose to carry one). You should cancel all other bills and recurring payments. If you have yearly professional license fees, make sure you have the money set aside to pay for them.
Get the last day of your apartment lease to coincide with the start of your sabbatical if possible. Otherwise, move out of your apartment ahead of time and live with a friend or family member for the few months leading up to your sabbatical.
Work your last day of work then start the best year of your life!
Once all the preparation is complete, the only thing left to do is work your last day then start your Year Off! You’ll likely experience anxiety in the weeks and days leading up to it, and you’ll doubt whether you’re making the right decision. But always remember why you’re doing it and what you hope to accomplish while gone. The anxiety will significantly subside once you start traveling and experiencing everything this great, big, beautiful world of ours has to offer.
7. ADDITIONAL READING AND RESOURCES.
The Simple Formula to a Successful Year Off.
The 5 Small Steps to get your Year Off planning underway.
The 7 Financial Steps to a Year Off.
9 Life Skills to Help You in Your Pursuit of a Year Off.
My list of the top 10 books to prepare you for a year of travel.
What To Do and Where To Go Page
Please contact me if you need any help or have any questions about a mid-career sabbatical.