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How to Finance a Sabbatical

How to Finance a Sabbatical

by Matt | 1 Year Sabbatical on December 21, 2010

How to finance a sabbaticalOne of the biggest hurdles we are facing when it comes to taking a full year off is money.  Let’s face it; money makes the world go ‘round.  You can’t do much without money.  How much money does it take to finance a sabbatical?  That’s a really good question and one I don’t have a solid answer for yet.  I think a lot depends on the lifestyle you want to enjoy on your sabbatical, whether you intend to utilize passive or active income to support yourself as well as where you intend to spend your sabbatical.

As I’ve been reading and researching others who have taken sabbaticals the range of financial backing used ranged from $20K to over $100K.  That’s a wide range of value there but every situation is unique.  We are still trying to determine what our expenses in Indonesia are going to be.  Thankfully we have friends and family that are there so we should be able to get a close approximation as to how much we will spend.

This post isn’t focused on the details of finances however.  In this post I want to take a birds-eye view of different options for financing a sabbatical.

Sell or Rent Your Home

We don’t own our own home but if we did we would probably consider renting it out.  Depending on the market and your personal situation you may be able to rent your home out, make the mortgage payment and have a little left over to finance your monthly expenses abroad.  Of course you also have the worry that goes along with being a landlord.  This can easily be resolved however by hiring someone you trust (or getting a relative) to take over the management responsibilities (collect the rent, make repairs and keep an eye on the place).

Maybe you don’t want to return to the same town or home so selling your home may be an option.  I’ve never been a home owner so I am not familiar with the tax implications of selling but it is an option you could consider and look into.

Since we rent we obviously do not intend to keep renting while we are away for a year.  We also don’t want to store all of our things in a storage locker so our intent is to sell everything but treasured memories.  By treasured memories I primarily mean irreplaceable photos.   We are hoping to be able to get this down to a small box or two and be able to store this with friends or relatives and not have to pay for storage.  The rest of our “stuff” will all be sold including furniture, most of the clothing, kids’ toys, vehicles (we own 2 that are totally paid off), appliances etc.  Pretty much everything that didn’t come with the rental is going up for sale.

We plan to use a combination of eBay, Craigslist and garage sales to sell it all.  To be honest it’s a scary thing to do.  We tend to define ourselves by our possessions and to sell everything that we own leaves us vulnerable to the mindset that we ourselves are somehow less valuable.  What I am hoping to find (and what I hear many people experience) is that by becoming essentially a minimalist, we discover new found freedom.  Worst case we get the money we need for our year adventure.

To Work or Not to Work?

Other options for dealing with finances are to work while on your sabbatical.  Of course if you are taking a sabbatical “from” work then this may not be an appealing option but there are a few positive aspects of this.  First, you don’t have to do what you currently do.  You can do something completely different.  Maybe you can teach English (if English is your first language) either in a formal classroom setting or as a private tutor.  I actually took an online course through and got a certificate of completion.  Now if I choose to teach English to earn a bit of money on the road I have the certification to give me a leg up.

A sabbatical may be the perfect time for you to start your own business.

Maybe you want to start your own business?  A sabbatical may be the perfect time for you to dedicate to that purpose.  During this sabbatical my wife wants to start her own bakery in Indonesia and I plan on taking my photographyto the next level.  These things are difficult to do when you are working an 8-5 gig Monday thru Friday.  Of course all of this depends on what the purpose of your sabbatical is.

The point here is that you have plenty of options to generate income while you are on your sabbatical and some may even come up unexpectedly during your sabbatical.  You just have to be open to them and be creative with generating the opportunities.

A Tough Word – Sacrifice

Finally if you really want to be successful in financing a sabbatical you need to sacrifice.  This means embracing at least some form of minimalism.  This doesn’t mean that you need to live with only 50 things or in a studio apartment with no furniture (save that for your sabbatical).  It does however, mean that you should take a long hard look at where your money is going and then seeing where you can make cuts so that you can shunt that money to savings.

I’ll be the first to admit that this has been difficult for us and we have not done a very good job at it.  We’ve picked the low hanging fruit like downgrading our cable TV service, reducing frivolous spending, eating out less and not taking any big trips.  But the fact is this isn’t going to be enough.  There are still many things we can do like cancel cable TV entirely (we’ve kept it mainly for the kids), drive less and walk/ride more, look for and take advantage of sales at the supermarket (coupon clipping) among other things.

But probably the most important and something we’ve really glossed over until this point is creating a budget.  Moving forward into the new year this is something that we intend to get very serious about.  If we are going to make this thing work we are going to have to create a budget and stick to it regardless of what happens.  Betsy and Warren Talbot of Married with Luggage have a great post on how to setup a budget and Adam Baker of Man vs. Debt has a blog that is an incredible resource for getting your finances under control.

Debt will only hold you back.

You also need to be completely out of debt.  I couldn’t imagine taking a sabbatical with debt hanging over our heads.  Maybe we would be able to continue making debt payments while on sabbatical but the psychological aspect of knowing we owed money would take away from the whole experience.  This is why we have been directing a large portion of our incoming funds to debt payments.  We realize that our sabbatical is not possible as long as that debt remains on the books.  So get that debt paid off as soon as you can.

Obviously there is so much more to write about on this topic.  Money is probably the single largest question people have about taking a sabbatical or long term travel and is probably the biggest fear that keeps people from actually doing it.  When we can conquer our relationship with money we can find true freedom.

Over the course of the remaining months until our departure I’ll be writing more on the subject of money and finances.  There is a proverb that says “If you want to feel rich, just count the things you have that money can’t buy.”  The experience of taking a 1 year sabbatical and being able to share that with my family is going to be worth more than money.

If you have ideas on how to finance a sabbatical or extended period of travel that you think would really help people struggling with finances I’d love to hear from you.

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{ 15 comments… read them below or add one }

Magda December 21, 2010 at 8:30 pm

Great post Matt.
Financial aspect of career break/sabbatical is what scares most people away from it. Many people think it’s not possible to save enough to not work for a year or longer. But it’s very far from truth. I guess the most important thing is to realise that most of the world is relatively cheap. For example, I traveled in India for $15/day and in Thailand for $25/day. That’s much less than the daily costs of living in my hometown are.

And here are some of strategies that helped me save for my trip:
– I rented out a spare bedroom in the apartment I was renting. This paid for half of our rent every week
– I stopped buying books, take away lunches and clothes. Instead I joined a library, started bringing my own lunch to work and used the clothes I had
– I sold everything I owned, except for things I wanted to keep (about 60kg of stuff)
– I was being paid monthly, so each time I received my salary I would put a specific amount (same each month) into high interest saving account and I would use the rest to live for the entire month. The amount left was rather modest, so at first I struggled, but after I while I learnt how to minimize spending and never had to draw money from my savings

Good luck with your trip!


matt December 22, 2010 at 1:50 am

Hi Magda! These are great ideas. We’ve cut out eating out, I no longer buy coffee at Starbucks but bring my own tea to work. It all starts to add up over time. It funny how we buy little things throughout our day without thinking about it but once you start to add it all up it’s quite significant and can save you thousands a year. We have been working to get a better idea of the cost of living in Indonesia. The one benefit we have is that we can stay with relatives so our housing costs are almost nothing.

By the way….I love your photography! You have such a great eye. Your image of the Petronas Towers in Kuala Lumpur is amazing. Would love to talk travel and photography with you.


Magda December 22, 2010 at 3:01 am

:)))) Happy to talk travel and photography. These are actually the two topics I could talk non stop for hours and still not have enough 🙂
Magda recently posted..Magical colors of Bac Ha


Judy December 22, 2010 at 12:45 am

Hi Matt!

I wanted to let you know how much I have enjoyed reading your blog. I found it through the rowdykittens’ simple living update last Friday and I am almost through with the archives!

I really appreciate your writing style. It is clear, easy to follow and very genuine. I can see the love you have for your wife by the stories you share. The fall pictures are absolutely moving.

I just wanted to note that it does not take as much money to travel as most people believe it does.

I am a Peace Corps Volunteer in rural Guatemala. We earn $12 a day to cover ALL of our living expenses (excluding health care). Guatemala is very affordable if you are smart about it. I have rafted on class V rapids, zip-lined through mountains, climbed volcanos, discovered paradise, fallen asleep to the sound of howler monkeys, slept by one of the most beautiful lakes in the world, trekked for 5 days in the jungle, discovered ancient ruins and learned powerful lessons on generosity and patience from the wise Mayan people without ever dipping into US savings.

I will also be spending 4 nights in Belize to ring in the New Year…all while earning $12.00 a day!

So when people say that they do not have the money to travel, I simply respond with…$12.00 a day, that is all it takes.
Judy recently posted..My Journey Through Community Development PT II- The benefits of a project


matt December 22, 2010 at 2:37 am

Hi Judy! Thank you so much! I’m happy you have been enjoying the blog. And thank you for your comment. I think most people would find it incredible that you are able to do all of that on $12/day. I know that Indonesia has a lower cost of living than the US and with us being able to stay with family our monthly expenses are reduced even further. Reading your comment made me thing that our whole sabbatical will have a profound effect on our kids in terms of teaching them real value. And I guess it all comes down to priorities. Do we choose to prioritize purchasing meaningless things that while make us feel good temporarily or do we choose to place a priority on long lasting real world meaningful experiences? You are correct…anyone has the ability to travel if they so choose.

What incredible life adventures you are having in Guatemala. And what great work you are doing. I read your post on the serious problem of cooking stoves and the simple solution of the improved wood burning stove. What incredible work you are doing. Thank you!


Ivan December 22, 2010 at 2:57 am

man on man time is flying by :)..before you know it you will be in the air in route to your new home..I will def. need to come visit you in Indonesia when your all settled in :)….hope all is well…
Ivan recently posted..How To Get a Blissful Nights Sleep With an Easy Mental Exercise


matt December 22, 2010 at 6:39 pm

Hey Ivan! Good to hear from you brother. We are definitely expecting a visit from you and are looking forward to hosting your stay there. You will love it there!


Betsy Talbot December 22, 2010 at 8:24 am

I agree with Magda’s points and have a few others to share:

First, the word “sacrifice” is accurate but misleading. Yes, you have to give some things up to go on a sabbatical. But focusing on the lack instead of what you will get in return is a little de-motivating. We kept a world map on our wall as well as the blog to remind us every day during our 2 years of saving/downsizing why we were doing it. It makes living without TV a little bit easier. 🙂

In addition, you can rent tons of videos at your library for your kids, and you’ll find that giving up cable also helps your budget because you won’t see ads for restaurants, new gadgets and other things you think you need. I was amazed at this unexpected benefit of giving up cable.

Last, when you really involve your friends and family in your project they can be amazingly supportive and helpful. They want to see you do this big thing, and they will help you in ways you can’t even imagine if you let them (mentally, physically, emotionally, socially, and even in some ways financially). Good luck!

PS – We give a tally every month of our spending on the road, so feel free to check it out to help with your own budget planning.
Betsy Talbot recently posted..Fun facts about Ecuador


matt December 22, 2010 at 6:56 pm

Hi Betsy! I love your comment and agree. When I think of sacrifice I think of giving up something of value in order to gain something of greater value. But your point is well taken that if we tend to concentrate on the “lack of” instead of what is being gained we can lose steam and motivation. I’m the first to admit that I have problems with change and one of the reasons I am really pushing forward with this sabbatical is I want to put myself well out of my comfort zone and become better acclimated to change in my life.

We’ve been using Netflix a lot lately. For about $9 a month we have access to DVD’s as well as streaming so we really don’t need the cable at all. Personally I hate watching TV as I can’t stand the commercials and most of the shows are of questionable quality (that’s being nice) but that’s a whole different topic.

Getting friends and family on board with the project is definitely something to strive for. We still continue to get family that questions what we are doing and I think a few still don’t believe that we can make it happen. But over all the vast majority of people we have told are very excited and supportive.

If I haven’t said it before I am really enjoying your adventures and like that you have been documenting your spending on the road. I think that will be extremely helpful for others who are planning their own adventures abroad. I hope that you and Warren have a fantastic Christmas!


Lily (Explore for a Year) December 24, 2010 at 5:58 am

Hi Matt,

Great high level article about the finances behind taking time off. I didn’t have any large assets (house, car, etc) to sell to fund my year off, but a few tactical tips I used to finance/save for my year off:
– Starting thinking about the reward of giving up small purchases, like Starbucks or eating out. Sometimes when the goal is a large number like $20K, it seems like small amounts per day won’t make much difference, but if you realize that a $4 Starbucks is enough to pay for 2 full meals, in say Thailand, you quickly realize that if you give up a month of coffee, you’d have enough to feed yourself for a month.
– Taking my laptop with me to work online (I make websites), it may not be a lot of money, but enough to fund a small bit of expenses.
– Automatic savings plan from your paycheques, even as little as a $100/pay/cheque for a year adds quickly.

Lily (Explore for a Year) recently posted..Comment on 26 Highlights from 26 Days in Incredible India by Lily


matt December 27, 2010 at 11:23 pm

Hi Lily! Definitely giving up Starbucks is a great tip to save more money. If you give up a $5 a day habit you will have saved $1200 over a year based on a 5 day work week. Based on the fact that you just spent several weeks in India and are now in Thailand I would say your plans for saving have worked out quite well. Cheers!


Iain Mallory January 9, 2011 at 10:49 am

Hi, thanks for sharing, cool piece with some valid points, making decisions and sacrifices that we have all made at sometime or another



matt January 12, 2011 at 1:51 am

Hi Iain! Sometimes the sacrifices are hard to make unless one looks at the end goal. These are the times when one gets a true sense on whether they are all in or not.


Robert BAJAN January 10, 2012 at 12:02 am

I know exactly how difficult it is to commit to a Sabbatical. I’m on one right now. And believe me, it has been very difficult to take the first step, but we did it… The finances are always the scariest, but we prepared well – started living frugal life way in advance, re-evaluating our needs and wants, selling vehicles and excess stuff, renting our house out… Yes, it works. And even though you’ll have doubts some time, it ‘s the best thing we’ve done!
Robert BAJAN recently posted..How to spend a year out travelling with kids


Liz January 11, 2012 at 8:07 pm

Wow – only 3 hours until your big adventure! Congratulations and safe travels combined with amazing adventures!


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