A feeling of burnout at the job, monotony, and craving for a new perspective in personal or professional life drive us to take a sabbatical from our careers. A sabbatical is typically an extended break, usually for three, six, or 12 months’ leave from work, which allows you to recharge yourself or explore something new without losing your job. Taking a sabbatical is not a common practice in India, but growing awareness about mental health has many opting for it nowadays. The culture of taking a sabbatical is fast catching up with many working women in the country for further studies or learning a new skill or most commonly to fulfil family responsibilities.
A sabbatical is usually unpaid, and so before you take a career break, ask yourself if you are well equipped financially to handle the break. Here is how you can be on a smart sabbatical journey.
Be Sure And Have A Plan In Place
When contemplating a career break, be sure about the choice you are making. Assuming that you will be out on an unpaid sabbatical for long, calculate your money needs for the time span you need to be on break. If you are taking up a part-time job in this sabbatical period or taking up a professional course with stipend, your expenses can be partly taken care of. However, if you are taking this sabbatical for a family responsibility or recreation, work on a plan that can take care of your necessary expenses. Whatever is your idea, have a money plan in place to ensure a peaceful and enjoyable sabbatical.
Save, Save And Save
To avoid any kind of financial burdens later, it would be advisable to prepare for sabbatical well in advance. Factor in inflation and work on an amount you would need to save during your break period. There is nothing that can beat a good saving habit, so start saving two or three years before your sabbatical period begins. For an effective saving practice, set an amount and make the automatic debit facility work for you.
To let your money grow and have a handsome return, you can also invest your saved money in good short-term investment instruments. As per the amount you need and the tenure, identify instruments that can work for you. This can either be a recurring deposit (RD), fixed deposit (FD) or a mutual fund (MF). An effective way to invest your money in mutual funds is through the Systematic Investment Plan (SIP) route. An SIP enables you to start investing with an amount as small as Rs. 500 or invest a lump sum amount for a fixed tenure. You may also consider converting your SIP into Systematic Withdrawal Plan (SWP) when you are on sabbatical. This will help in getting regular payouts in regular intervals as decided by you during your career break.
Get Yourself Insured
If you are traveling during your sabbatical period, getting yourself a travel insurance policy will be a great idea to protect yourself from unexpected emergencies like losing money, medical emergency, cancelled trips or lost baggage. Many travel insurance policies also cover the cost of lost personal belongings such as passports. A health insurance plan can also come handy when you are on a sabbatical owing to family responsibilities or just to take a break. Life is uncertain and any life or medical emergency can throw your finances off guard. A life insurance and health insurance plan can help you sail through such emergencies, especially during a sabbatical.
An emergency fund will extend a helping hand in dealing with expenses that come unannounced. Married or single, working or non-working, an emergency fund is a must for all, especially for people planning a sabbatical. You should work on an emergency fund which is equal to 5-6 times of your present monthly income. An emergency fund will also save you from the hassle of borrowing when emergencies strike. Liquid funds, RDs and FDs are some of the investment option that can help you in building an emergency fund while providing easy liquidity simultaneously.
Keep Your Debts Low
When you are on a sabbatical, you may not have a regular income to sustain various debts. It would be wise to pay off these loans or reduce them in your working years. A debt can be a drain on your saved finances, so it is better to pay them off before the onset of your sabbatical.
Finally, a career break has its own sets of upsides and downsides. It can be immensely liberating if you prepare for it in advance by exercising discipline in your saving habits and cutting down on your consumption and lifestyle expenses.