The modern workforce is constantly evolving & adapting to new concepts such as remote working or taking career breaks that can not only help enhance an employee's productivity but can also influence their well-being for the better.
A sabbatical from work can be long-term or short-term depending on what your circumstance & end goal are. Perhaps you simply want to travel, explore business ventures, learn something new or have family commitments. Whatever your reason may be, it is important to account for the timeline of your sabbatical so that you can handle money matters accordingly. How you handle your personal finance during this time plays a huge role in determining how stable your future is going to be.
While a sabbatical can help you recharge & achieve your personal goals, not creating a proper financial plan for your time away can pose quite a threat to money matters.
If you are unclear on what your expenses look like, going on a sabbatical can drain your funds before you even know it. Let us assume you have a fixed amount of savings that you plan to use during your time away from work. Now, you need to manage your daily expenses, utility bills, loan payments, debts, investments & miscellaneous costs all from this savings.
Moreover, if you plan to travel during your sabbatical, those expenses need to be accounted for separately. Not chalking out a proper financial plan to figure out how long your savings will last can be a huge mistake even if you think you can manage in the long run. Avoid mental calculations & create a reliable plan so that you can map out all your expenses with clarity which will give you a realistic timeline of sustenance.
Not investing your money wisely can cause you to miss out on its benefits in the future. If you are planning for a long sabbatical, it is wise to plan a few years in advance so that you have enough time to save up on funds. For instance, investing in high return mutual funds & fixed-income instruments can do wonders for your savings. On the contrary, for a shorter sabbatical, debt instruments would be a better investment.
You can also take help from a financial advisor who can help you get a better grip on investment planning.
Making smart investments is not the only way to save and enhance your funds. Not having an emergency fund where you can liquify your investments with ease is likely to have a converse effect on your finances during your sabbatical years.
Since you will not be receiving a monthly income for a while, it is important to have back up in case of any emergencies. Fixed deposits & liquid funds are some great ways to contribute to a contingency fund. For better tips on handling your finances, you can also reach out to a finance expert who can help you draft the best investment plan as per your portfolio.
When preparing for a sabbatical, things like travel & health insurance may seem like unnecessary expenditure. However, it is always better to be well-prepared in case of any unforeseen medical emergencies during this time.
Not topping up your health insurance can put a great burden on your savings or could even lead to exhausting your contingency funds. It is best to check with your insurance provider & do the needful in order to avoid exorbitant healthcare costs while on a break from work.
Listing your assets without checking if they align with your sabbatical needs can be a huge disadvantage. For instance, you may want to sell off property to help you remain financially secure during your sabbatical. In such cases, a lack of planning in advance or improper asset management could lead to your funds being liquidated later than expected. This can have a direct impact on money matters through your sabbatical period.
Check all your legal paperwork and manage your assets efficiently in order to avoid any financial setbacks during your sabbatical.
Taking a career break has become a common notion today but it is impossible to sustain even a short-term sabbatical without the right kind of financial planning. For assistance on making the ideal investments, check out Dezerv, where you can get access to a personalized portfolio that is managed by financial experts to maximize your finances in the long run.
Take charge of your future now so that you can live your dream sabbatical life with financial stability.