How Financially Planning for My Career Break Changed How I Think About Money

As personally fulfilling my extended career break was, it never would have happened without planning intentionally and staying adaptable along the road. And even so, the uncertainties associated with the break humbled me by revealing a great deal about my relationship with money.

This is part 3 of my career break series, where I share how I approached financial planning when I embarked on this path.

I explained my decision to choose the break, what I did, and what I’ve learned from the past year in the previous pieces:

• Part 1: How I knew it was time to quit my job for a career break (and how it is going one year in)
• Part 2: What nobody tells you about taking a career break (and how to emotionally prepare for one)

Whether you are contemplating a break for traveling, career change, family care, health or personal enrichment, I hope my experiences can help pave the way for a smoother transition into this new chapter.

Think long-term: What does wealth mean to you?

In my early working life, I saved money from my paycheques, but I didn’t really know what I was saving for.

Society says to save for a white-picket-fenced house, for a new car, for expensive 10-step skincare, for beach vacations.

But are those things what I personally need to live an abundant life in the long term?

What does an abundant life mean anyway?

Those were the questions I was confronted with when the idea of a career break first took root in my head. The idea of reaching into the nest egg scared me simply because of the concept of things I could buy with the money down the road.

All our lives, we’ve been taught to accumulate more and more, but very rarely do we pause and think about why.

Money is a resource and a tool that helps us steward our energy. We trade our energy in the form of time and attention at work to receive more money. Once we have some money, we use it for things and experiences that recharge our energy, reclaim time, and focus attention on our life priorities.

So at the end of the day, it’s not about getting more money. It’s about getting more time and energy to do the things we want to do in our lives.

More sustainable energy, I might add.

One could work 100-hour weeks in hopes of realizing a vision of relaxing on a beach for the rest of their life after retirement. But what they are exchanging is not merely their time. However soon that retirement vision may come, would it still be as good as they imagined if they also accumulated a host of chronic health and mental health issues from those earlier years of stress?

We don’t need extreme examples like this one to show the importance of examining our long-term vision to inform sustainable money decisions. The way we get or use our money reflects our internal landscape.

If we aren’t clear on what kind of energy we want in the long run, we can get trapped in an endless pursuit of money or savings that throws us off balance in other areas of life.

When I really assess what I want out of life, I don’t imagine myself hustling until retirement only to sit on the beach doing nothing. There are so many things I treasure learning and experiencing. I see a career not as a singular path but as a lifelong journey to collect various interesting skills that I can leverage to do meaningful work. As long as circumstances permit, I’d rather carve out intentional interludes in my professional life to nurture my mind with the goal of returning with fresh creativity to offer.

Personally, taking the time to save for a long career break was 100% worth it to explore my purpose and regain my passion for a more fulfilling life. For what I lost out on income, I received 10x back in life experiences.

This might not be the choice for everyone, and that’s okay.

The most important thing is having a long-term purpose in mind.

What does wealth mean to you?

Think holistically: Steward money how you want to nurture your life.

How much should I save up for my career break?

That depends on what you do with your break.

What helped me begin the financial planning for my break was doing a holistic life audit:

• On a scale of 1–10, 10 being amazing, how do I feel across physical, mental, emotional, social, intellectual and spiritual realms?
• What are the experiments I can try to get closer to my ideal level in those realms?
• What will those experiments realistically require in my time, energy, and money?

This will help determine the projects and activities for your break, which then informs how much money you will need to make it a reality.

Do you want to stay in the profession but want some breathing room to spend time with family?

There are sabbatical and family/health leave options that you can explore with your employer without fully stepping out of the door. For some, this might be enough to find the rejuvenation you need.

Do you want the freedom of a longer period of time away to rethink everything about what a fulfilling career means to you?

Try out activities that align in this direction first while still employed. Figure out both what drains your energy and what gives you energy, then make a commitment to invest in those activities and projects that give you energy.

When I embarked on this career break, I wanted to challenge my thinking entirely on what a successful life looks like outside of a strictly linear corporate ladder. I wanted to heal my relationship with work and search for inspiration. I planned to travel and volunteer around the world, to explore alternative lifestyles, and to find what resonates with me.

I knew that it would take time to shift my deeply ingrained thought patterns of hustle, people-pleasing, and perfectionism.

Of course, I also knew it wasn’t going to be an easy route. With the amount of uncertainty this long road entails, planning the monetary investment was no small feat.

Once I had the vision in mind, I started breaking down the large goal into an estimated budget for each project and travel destination. I set the goal to save enough for 2 years: one year’s worth of travel funds, and another year’s worth of living and upskilling expenses to provide a financial safety net in case the path back to work isn’t as straightforward.

Becoming clear on my holistic values also helped me Identify the things I can and can’t compromise on as I was saving. For example, I cooked almost all of my meals, canceled unnecessary subscriptions, and cut down on entertainment/social events that required spending. However, I continued my essential health expenses and contribution to my retirement account.

After determining a realistic saving timeline. I set an auto-deposit from each paycheck into a separate savings account. This ensured that I consistently paid myself first before considering any discretionary spending. I tracked each transfer into the career break fund month after month until I reached the number.

Think essentials: Spend where it matters and save aggressively where it doesn’t

We are primed to chase the next shiny thing.

While there is nothing wrong with upgrading our lifestyle inherently, modern consumerism makes it all too easy for us to get stuck in never-ending lifestyle inflation. With every voice around us telling us we need the latest tech gadget or the luxury car, we buy our way into higher monthly bills and stagnant (or even diminished) savings.

Is the money working for us, or are we working for the money?

After spending months living out of a suitcase, I realized I don’t need much to live a joyful life.

I’ve learned to simplify my life and embrace the freedom of essentialism.

An essentialist approach to money involves mindfulness. Mindfulness to prioritize the key things that deliver the most impact for you and cut everything else. Mindfulness to be resourceful about leveraging what we have. Mindfulness to step back and evaluate if the spending truly aligns with our values. Mindfulness to know what’s enough for us and when to be content.

Setting ground rules for my spending during the career break helped me immensely in navigating the funemployment life.

The biggest ticket items for traveling are usually transportation, lodging, and food.

Knowing that I cared much more about authentic learning experiences than luxury and comfort, I looked for cheap flights and volunteering opportunities.

I chose work exchanges and volunteering projects through WorkAway which covered my accommodation and food costs in many of the places that I traveled to. Among many unique experiences I’ve gained through this form of slow travel, I worked on a farm on a tranquil island, an eco-lodge in the rainforest, and a primary school in a village.

What I’ve found is that some of the most fulfilling experiences in life don’t require much money at all.

When I did transit through the more expensive cities, I opted to stay in hostels and cooked most of my meals. With the money I saved, I invested in experiences such as local language lessons, cultural performances, arts and crafts workshops, and nature excursions. Instead of booking pre-packaged tours, I talked to the locals and gathered their suggestions for more affordable ways to sightsee.

I got rid of 70% of my belongings when I came back from the travels. The year away also revealed to me how little I actually missed so many of my material possessions.

It was freeing.

Not everyone needs to suddenly downsize their belongings and live out of a suitcase. But there is value in evaluating your spending through an intentional lens.

If you are traveling, consider different modalities of experiencing the culture. If you aren’t traveling, consider cutting down on the non-essential expenses to make more room for the things that matter the most.

Think practical: be prepared for unexpected circumstances

I’m a bit embarrassed to admit that before I thought about taking a career break, I didn’t have an emergency fund. I did save from my paychecks, but just threw them into investment and retirement accounts.

Knowing that I wouldn’t have income for a while, I needed to prepare for anything that came up.

I can’t tell you how thankful I am to have prepared ahead of time, because “anything” DID come up. Among the unforeseen situations that came up were family health problems, itinerary changes, and changes in the market. But thanks to the preparation, I was able to weather the storm.

On the practical planning side, here’s what I would recommend considering before you go on a career break:

Get rid of debt first

Don’t make drastic life changes unless you’ve already cleared debts, especially high-interest ones. Having the looming worries about someone knocking on the door for payments when you don’t actively generate income will impede your ability to focus on the present.

That being said, be careful not to fall into a hamster wheel of paying off debt. Take a balanced approach and save up for an emergency fund at the same time.

1 — Build an Emergency Fund

Aim to save at least six months’ worth of living expenses to provide a financial safety net in case of unforeseen circumstances.

I saved enough for an entire extra year’s worth of living and upskilling expenses to provide a financial safety net in case the path back to work isn’t as straightforward as initially thought.

2 — Have enough cash for short-term spending

Be realistic about your budget, and aim to save 1.5 to 2 times more than your estimated needs if possible. Put the money in a high-interest savings account or somewhere else easily accessible.

3 — Consider tax scenarios and healthcare coverage

Consult financial advisors about tax consequences if you are leaving the country for an extended period of international travel.

Double-check the effect of absentia on your healthcare coverage with providers. Where I live, I can continue to keep the provincial health plan active as long as I am physically present for at least six months in a calendar year. I planned for my travels to span 2 separate years (mid-2022 — mid-2023) so that I could remain active on the plan.

Buy travel insurance to cover other unexpected circumstances such as travel delay, lost luggage, and injuries outside of the country.

Think good enough: Shift away from a mindset of scarcity

Career breaks definitely involve uncertainty, which can be a valuable lesson in adaptability and resilience.

Throughout my career break, I was confronted more than a few times by a little fearful voice within me telling me to get a job.

The issue wasn’t a lack of funds. I’ve saved enough.

It just didn’t feel good to see my nest egg shrink in size.

How often do we think about our relationship with money on an individual level?

I grew up in an environment where most people had a mindset of scarcity, believing that opportunities were limited and we needed to cling tight to every penny we got. In the pursuit of more financial stability, my own family had paid the price in mental health from hyper risk-averse decision-making and sunk-cost fallacy.

The narrow focus on the limitations held me back from seeing possibilities. Instead of thinking creatively for solutions to my problems, it was so easy to fall back on saying “This isn’t for me”, “I could never do that” or “What if something happens and I run out of money?”

I eventually started seeing how this shame-based relationship with money held me back from growth.

It’s one thing to be smart about finances, and a completely different thing to make choices out of our own fear of lack.

I don’t necessarily believe there is a clear one-size-fits-all money mindset for everyone.

There are nuances depending on each person’s situation. It’s not as simple as flipping a switch in your brain from “scarcity” to “abundance”. If we have real anxiety about physically making ends meet, “abundance mindset” can just seem like another buzzword that people who actually have money throw around.

However, there is space for us to move towards “good enough”.

Acknowledge the progress and growth you’ve already made, and permit yourself to be open to different ways of being.

Yes, there are factors beyond our control such as the ones we’ve seen throughout the pandemic — inflation, supply chain shortages, and market changes. But we would be doing ourselves a disservice by getting stuck somewhere we don’t like simply because of the fear of what we would lose.

Many of the things we want in life can be realized in some form with less money than we think they require. We just need perseverance, resourcefulness, and an open mind.

It is crucial to differentiate between real physical limitations and the limiting beliefs we hold within us.

As you navigate a career break with financial constraints, you may come to appreciate non-material forms of wealth, such as time, health, valuable experiences, and meaningful relationships. This shift in focus can be transformative, helping you recognize that you aren’t simply losing money — you are using the money to invest in your holistic wealth.

Remember that the term is “personal finance” and not “relative finance”.

“Success is not always “reaching out” for something that you don’t have but rather “reaching over” and rearranging the pieces already there.” — Bob Proctor

Final thoughts

As always, I deeply acknowledge my privilege in having had the option to take such a break thanks to the education I’ve been able to have, a tech salary, and minimalistic spending habits in the years prior.

But I also believe one of the most important things in life is to find your own definition of freedom and how you will get there.

When you steward your money to facilitate progress towards goals that matter to you, you are investing in a life of freedom.

A career break can be a transformative experience on many levels. If you are planning one, be prepared to get real with yourself on:

1. Where you are — What do you observe in your life that you want to change? What would happen if nothing changes?
2. Who you are — What do you value? What gives you life?
3. Where you are trying to go — What are your next steps? How will you get there? What are the changes and uncertainties that can come up? What support and resources do you need?

If you are in the middle of a break, remember that you aren’t alone in feeling whichever emotions the break brings up. Be patient and gentle with yourself throughout the process. It’s a huge step to invest in your future self, and I’m so excited for your adventures ahead.