Should I Take a Year Off?

No, I don’t mean me, but I was asked this question by 3 separate people in the last month or so, and I thought it was worth exploring further.  In each case, the friend or former colleague felt that they were at a fork-in-the-road with respect to their careers and didn’t feel ready to plunge into the next thing.  They wanted my advice since I had in fact taken several months off several years back (see my story posted at Early Retirement Extreme) before transitioning to a very different career.  Each person was worried about finances, but had been prudent with their funds to date.  Since I am not comfortable telling someone else what they should do in a major life decision, I posed the answer in the form of questions that they should evaluate as they make their own decision:

–What will you be doing for that year? – I think it is always important to be moving toward something rather than simply away from something.  I also think it is too easy to set ridiculously difficult goals that are likely to fizzle out for the year.  When I took a block of time off, one goal was to really explore where to take my career next; a separate goal was to substantially improve my health. I thought that aiming for greater life balance was important.

–Have you made a realistic budget? — one of the problems that I’ve observed is that people make a budget for the time they intend to take off and not for the time it takes beyond that to find another job.  A key component of this is to know where you are on other lifetime financial goals such as retirement, home ownership, kids college funds, etc… and does the year fit into that.  Health insurance is another big issue for people in the US. While some companies have sabbatical programs that allow you to continue health insurance, and self insurance or spousal insurance are perhaps possibilities, be sure all of these questions are sorted out before you embark.

–Can you get by on (a lot) less? — once outside of the main work world, I find that many people have not considered ways they can trim their budget and lowered daily maintenance costs like work lunches, dry cleaning bills, mobile phone for work, etc… Often, time off can be less costly than perceived, especially if you choose to live in a cheaper cost of living place.

–Can you live without your job for a year? — this question surprises a lot of people, but I find many people who are disgusted with their current position, once a couple of months away, really miss many of the aspects of their previous life.  Maybe it was the regularity of knowing where to be each day, maybe it was the paycheck, maybe it was the status, or the social network.  Regardless of the reason, be prepared to miss some aspects of the job.

–Do you have a supportive network? — friends, family, former co-workers, new acquaintances, these are important when going through a major transition. With more flexibility in your time, you may find that you are available to join groups and meet people that the job previously didn’t allow. Try to maximize these opportunities.

–Do you have a plan post your time off? — see the comment above.  Also, be prepared for the year off, if you choose to take it, to shift your mindset and outlook substantially, so this plan may evolve dramatically over the course of the year.

shared at this week’s Carnival of Personal Finance