One 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 TEFLOnline.com 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.
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.
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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