More Life, Less Work

Financing Your Career Break

Taking career breaks is becoming increasingly popular. That statement is true either to pursue your passion or simply to recharge. Financing an extended break can be a daunting task. Fortunately, there are various options for financing career breaks. In this article, we’ll explore some of the most popular options.

Saving up

One of the simplest and most effective ways to finance a career break is to save up for it. This option means cutting expenses and saving money every month. Follow that practice until you have enough to cover your expenses during your break. You can create a budget plan to help you identify areas where you can cut back on your expenses.

Saving money is a great life skill to develop. You’ll need to be careful with your money during your career break. It will become a way of life. That statement is especially true if you take frequent or annual career breaks.

Taking a career break while carrying debt is not advised! A home mortgage is the one exception to this rule. You can rent out your home while on a break as one option. Another approach is to save enough money to pay your mortgage while you’re not working.

You should also save up an emergency fund that is separate to your career break fund. Most people should have an emergency fund that is equal to three to six months of their monthly spending. That is spending instead of income which should be a smaller amount. The recommendation is to have a least six months of spending set aside when taking a career break. This fund can help cover expenses when you return from your break if you haven’t started working yet. A six-to-twelve-month emergency fund is recommended if you plan to take frequent or annual career breaks. Yes, annual career breaks are possible!

**Taking out a personal loan **Another option for financing a career break is to take out a personal loan. This allows you to borrow the money you need and pay it back over time with interest. Keep in mind that taking out a personal loan comes with its own set of risks and drawbacks. Make sure you understand the terms and conditions of the loan before signing up.

Taking a loan is a way to finance a career break, but not a method I would use or recommend. This approach could get you into severe financial trouble. Working and saving to meet your goal will be more satisfying. Knowing that you earned your career break is a satisfying feeling. You also know that you have the ability to do it again when desired.

I would not use this option even once if you plan to take either frequent or annual career breaks.

Using credit cards

Credit cards can also be a source of financing a career break. Using a credit card to finance your break can be EXTREMELY risky if you don’t have a solid plan for paying off your balance. Credit card interest rates are high. The amount owed can quickly add up if you carry a balance.

Credit cards are just a different form of a loan. I do not recommend this option.

Do I use credit cards when I’m traveling on a career break? Yes, carefully. I use credit cards when needed, and I pay off the balance each month. There are some helpful ways to use credit cards that will be discussed in a future article.

Crowd-funding

Crowd-funding has become a popular way to finance creative projects and business ventures. You can also use crowd-funding to finance a career break. There are several crowd-funding platforms, such as Kickstarter and GoFundMe. These websites allow you to raise money from a large number of people. Keep in mind that crowd-funding is not a guarantee you’ll be able to raise the money needed. You’ll need to put in a lot of effort to create a compelling campaign.

Crowd-funding could require that you provide frequent updates to your patrons. This option might require you to learn how to create and edit videos. Those videos will need to be entertaining also. If those updates are something you are willing to do, this option may work. If you don’t want to publish updates, then you should avoid this approach.

This option is also unlikely to work if you plan to spend your time on a beach. It is doubtful that people will want to finance it. Crowd-funding might work if you’re pursuing a passion that is something that is active and exciting. These pursuits would be things that most people don’t have either the skillset or confidence to take on. Don’t think you can jump into an exciting hobby as a way to finance your career break if you’re not already currently doing that activity. Researching YouTube is an idea to determine if there is a market for your pursuit.

I would consider crowd-funding to start a business that required a large amount of money. I would not recommend this option for career breaks. My view is crowd-funding a career break will be viewed by most people as begging others to pay for your break. I have not used crowd-funding to finance my career breaks.

Renting out your home

If you own a home, you can consider renting it out while you’re away to generate some income. There are several home rental platforms, such as Airbnb and HomeAway. These companies assist you to rent out your home for short-term stays.

We didn’t rent out our primary home, but we did rent out a vacation home. If you have a mortgage to pay, this option may be able to cover the mortgage. Do not plan to have spendable income from a rental property carrying a mortgage. Your experience may be different. The rental area could make a difference also. Spendable income may be possible if you own a property free from a mortgage. Estimate the income using conservative numbers for both the rental rate and the days of occupancy. Don’t forget to include the costs for maintenance and management while you’re away.

This subject can be addressed in more detail in a future article.

A Gift

Some people will be lucky to receive a gift of money from someone. If the person giving the money has stated they want you to use the money for a career break, you’re set. If not, it is a good idea to ask them first to avoid any hurt feelings. If the money was received as an inheritance, with no conditions, you can use the money as you want.

After I graduated from college, some older friends gave me a small amount of money with the express purpose of doing some traveling. So, I went to Europe for a month with their best wishes. Win, win!

Conclusion

In conclusion, financing career breaks requires careful planning and consideration. There are several options that may be available for some people. Saving up will be the option most people will need to use. This option will also be the most satisfying one. A career break and can be a reality with good financial discipline and planning.

How can we help you with career break financing questions?