Taking a sabbatical requires solid financial planning

Do you feel the need to take a professional break to recharge your batteries or pursue a passion project? A sabbatical might just be the answer. However, you must plan your finances accordingly. Here’s an overview of what you need to know.

Paid or unpaid leave

A sabbatical can either be paid or unpaid, depending on various factors. You might be able—with your employer’s approval—to take a slightly reduced salary for a few years so you can receive full pay during your planned leave. In some cases, your employer might decide not to pay you a salary at all while you’re away, which would require some extra planning.

Saving habits

You’ll inevitably need to adjust your savings habits in anticipation of a sabbatical. Start by drawing up a budget tailored to your sabbatical plans to estimate how much money you’ll need to live comfortably. Set aside a portion of your income to reach your savings goal. Do you need a little extra cash? Think about selling some unused items.

Open communication

If you want a successful sabbatical, start by having an open discussion with your employer several months in advance. Highlight the benefits of your sabbatical in terms of future work performance and reassure them of your intention to return. This way, you can also address any concerns about future compensation.

Do you need help planning your leave? Talk to a financial expert.