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Planning a sabbatical? Smart tips for the journey

About the author

Kate Ashford is a New York-based freelance journalist who writes about personal finance and health. She has written for Money, Real Simple and Redbook magazines.

Taking a sabbatical

Going on sabbatical? Expect the costs of a break from work to be higher than you think (Thinkstock)

A four-month sabbatical gave Michelle Goldstein, a financial planner in Dallas, Texas, the chance to explore Cape Town, South Africa with her 9-year-old son while her husband worked on a project there. At first glance, it appeared like a no-brainer, but the expenses racked up quickly.

Think you’d like to take a break from work, but can’t afford to spend the time or money planning a sabbatical? Even Goldstein, who spends her work hours helping others plan out their financial lives, was surprised by how hard it was to set some of the sabbatical logistics in place — and by some of the costs involved.

One surprise: shipping fees. “No matter if you go on a 10-day vacation or a 1-year sabbatical, the airlines allow you one free bag internationally,” Goldstein said. Another unexpected expense: medical bills. Goldstein estimates that her family spent about $1,000 out-of-pocket on doctor visits to prepare for their trip.

A sabbatical — typically a three, six, or 12-month leave from work meant to allow you to recharge or try something new without losing your job — is more common in countries like the US, the United Kingdom, and Australia. They are most common among academics and healthcare professionals. Less than a third of US employers allow sabbaticals, according to the 2012 National Study of Employers by the Families and Work Institute.

Meanwhile, in India, sabbaticals have only recently become accepted as a business practice, according to Lovaii Navlakhi, founder and chief executive officer of financial planning firm International Money Matters in Bangalore. And in China, sabbaticals are “unheard of,” said Peter Murphy, a financial consultant with Rock Private Office in Shanghai.

In France, a sabbatical is something that might be taken once during an employee’s working life, according to Chris Clifford with financial advisors Spectrum IFA Group. In Australia, “it is very common to spend some time working overseas on a sabbatical, whether it is the pursuit of more experience to further a career or just pulling beers in a bar and experiencing a different way of life,” says Brett Evans, executive director of Atlas Wealth Management in Southport, Australia.

If you are considering asking for a sabbatical, here are some pointers on preparing for time off from work.

What it will take: The cost of a sabbatical will depend on whether you are taking paid or unpaid leave from your job (it is usually unpaid), how long you will be gone, where you are going, and what you will be doing there — volunteering, working, travelling, or drinking margaritas on a beach, for example. Unless you have made other arrangements, you will be responsible for all of your basic fixed expenses at home while you are away, plus the cost of living in your destination. If you are spending six months in Paris, it will cost more than six months in, say, Nicaragua.

How long you need to prepare: Experts suggest you begin to plan at least two years ahead of your sabbatical date, if possible. “Even with the confidence of returning to a paid job, it still takes some planning to be able to build a fund large enough to survive overseas for an extended period of time with no income,” Clifford said.

Do it now: Tell people — friends, co-workers, family — that you plan to take the time off and tell them where you plan to go. This accomplishes two things. First, it is inadvertent networking. “If you tell 10 people that you want to go to Kenya, at least three of them are going to know someone who has done it or who is there,” said Dan Clements, US author of Escape 101. Those connections might be able to make lodging or volunteer recommendations, or even set you up with a house-sitting gig to lighten your costs.

Second, telling people makes it more likely that you will actually go. “You create a psychological commitment to going by telling people,” Clements said. “The more people you tell, the harder it is not to go. Once you get over that hump where it is harder to stay than to go, then the sabbatical almost becomes inevitable.”

Start saving. Calculate how much you are going to need to cover your living costs, then divide that amount by the number of pay checks you will see between then and now. Then set up an automatic transfer of funds from your checking account to a savings account on paydays and limit your access to the account.

If your sabbatical involves plane tickets to go somewhere, buy them as soon as you are able. “That way, you are locking yourself in,” Clements said.

Do it later: Be prepared to frontload the costs of your sabbatical. “We were really surprised by how many expenses you have to pay in advance,” Goldstein said. Setting up a living situation in another country could require paying a hefty housing deposit, covering a few months of lodging in advance, or even buying a car. “Have some capital up front,” Goldstein said.

Make a plan — but not too much of a plan — for your time away. “I think if you are going to get the most benefit from your sabbatical, you want to avoid the level of structure it takes to run your everyday life,” Clements said.

Build in some downtime after your return. If you are arriving home from a sabbatical on September 1, do not plan to return to work on September 2. “The return can be dramatic, so give yourself some breathing space,” Clements said. “Expect to find it difficult to jump right back into the saddle.”

Do it less expensively: If you can get a renter into your home to cover your house payment and utilities, it will go a big way toward shrinking your costs. Give yourself enough time to find someone and get contracts in place. It took nine months for the Goldsteins, who rented their Dallas home, to secure the right renters.

If it is not feasible to get a renter into your home, think about whether you could offer it as part of a home exchange — and land free housing at your destination. Start with sites such as HomeExchange.com and SabbaticalHomes.com.

Keep in mind that every dollar you spend now is a dollar you will not have at your destination, so consider that each time you buy something you really don’t need now.

We were really surprised by how many expenses you have to pay in advance. — Michelle Goldstein

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