Finance Your Career Break
Our best tips to stay on track while away.
Everyone dreams of packing it all in and taking off on a round-the-world trip or spending a year living la vida local on some sun-drenched mediterranean hill-top. Whereas once upon a time it could spell career death to do so, nowadays more and more individuals – and the companies they work for – are recognising that the grown-up gap year, or career break, is actually a realistic option. The majority of millennials report being unsatisfied with the jobs they are in, and hope to take a break to spend time doing something more fulfilling, yet the financial pressures of the property ladder and student debt repayment mean that if you’re going to take a break, it needs to be a money-savvy one.
So how can you continue making your money work for you if you’re deliberately putting yourself out of a job for a year? Here are some pointers:
PENSIONS – your private pension plan may have scope for a “holiday” from payments for people who want or need to put their contributions on hold. Call them up and find out what provision is on offer. If you only have a workplace pension, contributions will stop when you’re not earning, but you may want to fix a date to go back (IF you’re going back) so you can be sure that there’s a definite date in your long term plan when that lovely compound interest will start adding up again. This could give you real peace of mind while you’re away.
TAX – if you’re leaving your job half way through the tax year, find out how much of a rebate is owed to you. It could cover a business-class flight home or six months in a Bali beach hut.
PROPERTY – what makes most financial sense when it comes to the property you’re leaving behind? Rent? Sell? Sub-let to a friend? Airbnb? Do the maths and check your tax and insurance liabilities if you do decide to rent out your home.
EARN AS YOU GO – could you actually earn some money while you’re on your break? This is where the famous side-hustle comes in to play. Thanks to global e-connectivity it’s never been easier to do a bit of consulting or freelance work while you’re on the road. And you might even appreciate the intellectual structure of a bit of work - on your own terms, mind - after weeks of not using your brain. Then you can put the money you earn aside – not for next week’s booze and henna tattoo bill (this is a grown-up gap year, remember) but for something potentially worrisome that could harsh your holiday vibe, like debt-repayment, insurance or your emergency fund.
WHAT COMES NEXT? – although you probably don’t want to think about coming home yet, it will happen, and you will have to get back in to the job market. So make a point of maintaining your professional contacts while you’re away, and be open to making new ones when you’re travelling.
With a bit of foresight, your career break could leave you not only with beautiful memories, but an increased sense of confidence, purpose and optimism. Having the gumption to leave your job and make it work for you financially? That’s the growth-mindset incarnate. And we love it!
Photo by Chris Murray on Unsplash.