If I were a betting man, I’d day one of your fears about taking a sabbatical was money.
I get it….
Even if you’ve done alot of saving, there is no-one who wants to see their hard earned money go to waste.
So where to start?
Well it’s time for a dose of reality. Let’s start talking numbers!
Time to take some action
To make a prediction as to how much a sabbatical is going to cost, we need to look at three things.
- Monthly bills that will continue whilst you are away
- One off costs associated with the sabbatical
- The daily cost of living whilst you are on sabbatical
Once you have got these three pieces of information, you will then be able to work out exactly how much money you will need to save before you head off.
This might be the point in the process that you tap out. Do not put yourself at risk financially by taking a sabbatical. If the facts say you can’t afford it, you need to go back and save until you can.
Right, let’s start running the numbers….
If you want an easy way to do this, I have set up a full [thrive_2step id=’4971′]SABBATICAL BUDGETING SPREADSHEET[/thrive_2step], in which you put in your intended sabbatical length, daily costs, all expenses and savings and it will give you the numbers you need. You can see a screenshot of part of it above.
1) Monthly costs while you are away
In this section, open up your latest monthly bank statement.
Write down every recurring monthly cost THAT YOU ARE NOT going to be able to cancel when you take a sabbatical.
If you are a homeowner, there might be alot of costs that will continue, such as your mortgage (if you can’t take a break), house insurance, council tax etc.
2) One off costs associated with the sabbatical
Next write down any one off costs that are to be associated with the sabbatical
You might not have them all yet, but start to make some predictions.
The good news about these costs is some can be paid in advance when you are still earning, so by the time you leave you have already absorbed the cost, but we are looking at worse case scenario here.
3) Estimated Daily Cost of Living
Next is to estimate your daily costs whilst on the road.
This is a tough one, and will be very dependant on your travel style and how many excursions you plan to take when on the road.
As a starting point, I have found this article to be really useful.
Add it all up….
Right, you should now be getting to a ballpark figure of what the cost is going to be for your sabbatical.
- Take the monthly cost from point 1 and multiply by the months you are away.
- Take the one off costs from point 2.
- Take the daily costs from point three and multiply by the days you are away.
And there you have it. In front of you now will be a number.
It might scare the life out of you, it might be better than you expected.
But it is now real!
This is the number you ideally need to have in savings before you go.
If you don’t you have a number of options:
- Wait a bit longer and save more.
- Cut down the time of the sabbatical (more of this in the next step).
- Earn money whilst you are travelling.
- Cut out more monthly costs whilst you are away (cancelling cable, mobile phones etc).
- Rent out your house.
- Look into ways to reduce your daily costs whilst away.
This is far from an exhaustive list, but it’s essentially two things.
Cut costs or find more money
Whilst this post might have been a scary wake-up call for you, I’ve said from the beginning this was about pragmatic advice.
And now you have the cost in front of you in black and white!
Actions from today:
- Write down all your current monthly costs that cannot be cancelled whilst you are on sabbatical.
- Estimate your own-off costs associated with the sabbatical.
- Estimate your daily costs whilst you are away.
- Use the calculations in the post above to work out exactly how much money you need to make this sabbatical happen.
if you didn’t see it earlier in the post, download your free
[thrive_2step id=’4971′]SABBATICAL BUDGETING SPREADSHEET[/thrive_2step]
by clicking the link.