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Writer's pictureAnna N'Jie Konte

How to Plan for a Sabbatical: A Step-by-Step Guide to Living Life on Your Own Terms

Taking a sabbatical is one of the most rewarding, transformative financial decisions you can make. It’s a chance to pause the hustle, focus on personal growth, and create memories that enrich your life forever. But while the idea of a sabbatical may sound dreamy, planning for one takes intentionality and financial strategy.


If you’ve ever wondered, “Can I afford to take significant time off work?” or “How do I prepare for a sabbatical without financial stress?”—this guide is for you. Here’s how to make it happen.


Step 1: Define Your Sabbatical Goals


A sabbatical can be anything from traveling the world to learning a new craft or spending more time with your family. Before diving into logistics, it’s essential to get crystal clear on what you want to achieve during your time away from work.


 How to Define Your Sabbatical Goals


  • Dream Big: What have you always wanted to do but never had the time for? Write it down.

  • Prioritize the "Time-Sensitive" Dreams: Think of activities that require physical strength, like hiking national parks or taking a dance class, and prioritize them if you’re currently able-bodied.

  • Use the "90-Year-Old Self" Exercise: Imagine you’re 90 years old. What would you regret not doing? This exercise helps surface your deepest desires.


Once you’ve identified your top sabbatical goals, you’ll have clarity on the time, energy, and resources required to make them a reality.


Step 2: Determine the Length of Your Sabbatical


How long should your sabbatical be? The answer depends on your goals, career plans, and financial situation. Common sabbatical lengths range from 3 to 12 months, but they can be shorter or longer depending on your situation.


 How to Decide the Length of Your Sabbatical


  • Align With Your Goals: If you’re traveling, ask yourself how much time you’ll need to fully immerse yourself. If you’re writing a book, consider how long it will take to complete a draft.

  • Time It With Life Milestones: Consider kids’ school schedules, partner’s work schedule, or significant family events that may affect your plans.

  • Start With a Range: If you’re unsure, set a range (like 6 to 9 months) and refine it as you get closer.


Step 3: Calculate the Cost of Your Sabbatical


Here’s where it gets real. Knowing the cost of your sabbatical is crucial for reducing financial stress and ensuring you’re prepared for the investment.


 How to Calculate Your Sabbatical Costs


1. Monthly Living Expenses: Mortgage/rent, utilities, insurance, groceries, and transportation costs.

2. New Expenses for the Sabbatical: Travel expenses, courses, equipment, retreats, and any other costs tied to your specific sabbatical goals.

3. Emergency Fund Adjustment: Ensure your emergency fund can cover your essential expenses during the sabbatical and a few months afterward.


Use this formula to estimate your cost:


(Regular Monthly Living Expenses + New Expenses) x Length of Sabbatical = Total Cost


Step 4: Assess Your Resources


How will you fund your sabbatical? This step is where you identify your financial capacity and how to leverage your resources to support your time away from work.


 How to Fund Your Sabbatical:


  • Liquidity Events: If you’re expecting a financial windfall (like selling a business or receiving an inheritance), allocate a percentage (like 10-25%) for your sabbatical.

  • Savings: Calculate how much excess cash you have beyond your emergency fund. This could come from checking, savings, CDs, or even low-risk brokerage accounts.

  • Cash Flow Adjustments: Can you redirect a portion of your monthly cash flow towards your sabbatical fund? Consider bonuses, RSUs, or profit distributions.

  • Create a Savings Plan: If you’re starting from scratch, divide your total cost by the number of months until your sabbatical begins. For example, if you need $75,000 and have 36 months to save, you’ll need to set aside $2,083/month.


Step 5: Create a Financial Plan for the Sabbatical


Now that you know your goals, length, costs, and resources, it’s time to develop a financial plan. This plan will keep you focused, avoid overspending, and ensure you’re financially secure before, during, and after your sabbatical.


 How to Create Your Financial Plan


  • Build a "Sabbatical Fund": Keep the funds for your sabbatical separate from your emergency fund to avoid confusion.

  • Automate Your Savings: Set up an automatic transfer to a separate account specifically for your sabbatical savings.

  • Plan for Re-entry: If you’re an employee, consider discussing a formal leave of absence or using unpaid leave. If you’re an entrepreneur, think about how you’ll return to your business and the steps you’ll take to regain momentum.


Step 6: Address Your Mindset and Scarcity Fears


Financial planning is as much a mindset game as it is a numbers game. When you’re used to saving and building wealth, the idea of spending a significant amount on a sabbatical may trigger "scarcity thinking."


 How to Overcome the Scarcity Mindset


  • Shift Your Perspective: Recognize that the money you spend on a sabbatical is an investment in yourself.

  • Get Comfortable With Big Numbers: Seeing a large withdrawal from your account can be unsettling, but remember that you’re intentionally funding your goals.

  • Reframe "Loss" as "Opportunity": While you may not be adding to your net worth during a sabbatical, you’re gaining something far more valuable—lived experience, memories, and mental well-being.


Step 7: Plan Your Re-entry


How you re-enter the workforce or your business after a sabbatical matters. Prepare your re-entry plan in advance so that you feel secure and ready to make the most of your next chapter.


 How to Plan for Re-entry:


  • If You’re an Employee: Will you return to your old job, negotiate for a new role, or change careers entirely? Plan your approach in advance.

  • If You’re a Business Owner: Decide if you’ll maintain any client relationships during your sabbatical or if you’ll pause your business completely.

  • Invest in Support: Consider hiring a career coach or working with a mentor to help you re-enter the workforce or grow your business post-sabbatical.


Final Thoughts


Taking a sabbatical isn’t just about "time off." It’s about living a more intentional, meaningful life. By following these seven steps, you can take a well-planned sabbatical that’s financially secure and emotionally enriching.


Here’s a quick recap of what to do:


1. Define Your Goals: Dream big and prioritize what matters most.

2. Choose a Length: Decide how long you’ll need to accomplish your goals.

3. Calculate Costs: Know your expenses so you’re not caught off guard.

4. Assess Resources: Use savings, liquidity events, and cash flow.

5. Build a Plan: Create a financial plan that supports your time away.

6. Shift Your Mindset: Remember that you’re investing in YOU.

7. Prepare for Re-entry: Think about how you’ll return to work or business.


If you’re ready to plan your sabbatical but want guidance from a financial advisor who understands the balance between growing wealth and life, reach out to Poder Wealth Advisors. We specialize in helping women live life on their own terms.

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