How do you plan your finances for a travelling career break? We asked money experts

As we head into spring, you may be looking forward to taking a week or two off work for a trip to warmer climates or a big adventure.

But what about a longer break – maybe a few months or even a year?

It’s a popular idea. Research from the travel website Opodo found that 71 percent of people would consider taking sabbatical leave if the option was available to them.

It will be a challenge for many to convince your boss to agree to the idea. However, an increasing number of companies in the UK are now offering long-term employees a sabbatical as part of their benefits package.

Sabbatical leave is an extended period of paid or unpaid time away from work, the exact details of which are agreed between the employer and the employee.

People often use this as an opportunity to travel or take an “adult gap year” – but other common pursuits include studying, volunteering, or pursuing a side project.

Employers including the NHS, Tesco and HSBC all offer these breaks to people who have worked at the company for a certain amount of time – known as the ‘service requirement’.

But even if your company doesn’t have an official policy, it doesn’t necessarily mean you can’t take a sabbatical. Ben Reeve, founder of the website The Sabbatical Guide, says there are often ways you can negotiate time off with your employer outside of the formal policy.

“It’s important to prepare and work hard to support both the company’s needs and your own,” he tells This is Money via email of his current travels in Australia.

“For example, when I took my first sabbatical, I offered a plan to cover my time off — with two of my team each taking on half the role while I was gone, giving the company two new leaders to deploy if I came back.’

But getting permission from your boss isn’t the only thing to think about when planning your dream trip.

Financial planning for a sabbatical is critical to ensuring you make the most of your time off without going over budget or drawing on your savings.

We spoke to estate planning experts to find out what areas to look for when planning your dream trip — and what impact a mid-career break could have on your future finances.

Planning is critical if you want to make the most of your free time and use your vacation money effectively

“A sabbatical can be life-changing, but also extremely expensive, depending on how you spend your time,” says Anna Stoughton, personal finance analyst at Charles Stanley.

“The “you only live once” approach is certainly an extremely tempting way to go, and it’s encouraged to leave your sabbatical with no regrets.

‘But wearing a sensible cap, you can also enjoy your retirement if you plan, invest and save well in the building phase of your career.

So, like many things in life, it’s all about balance. Go for a run, but then enjoy the cake too.’

What to keep in mind when planning a sabbatical

1. Time Away: How long are you going and what can you afford?The two go hand in hand. While taking time off from work is beneficial for a myriad of reasons, don’t overdo it to the detriment of your longer-term finances.

Make sure you have a consistent emergency fund — as a loose guide, spending three to six months is generally recommended — and be relentless with your budgeting.

2. Impact On Your Career: You should sit down with your employer to explain the full details of your time off and what it may mean. Things to consider include whether the company guarantees you a job to come back to; the maximum free time you get without affecting your current position; and whether the time off would affect an assessment process or chance of promotion.

3. Right to Work Abroad: If you’re considering spending at least part of your sabbatical abroad, it’s worth researching your entitlement to work. It can be useful if you want to work remotely or if you are looking for a part-time job.

4. Existing holiday allowance: It may also be worth looking into ways you can maximize your existing vacation cash. Can you accrue vacation days for your sabbatical so that you get paid part of it? Or can you split your trip over two vacation years to use more paid time off? Keep in mind that many companies will have a limit on the number of paid vacation days that employees can take consecutively.

5. Current Financial Obligations: Do you have large debts that need to be paid off? If this is over your head, try to get rid of it before your break. If not, come up with a plan to pay little and often during the time off. At the very least, make sure your journey doesn’t get you into bigger, scarier debts.

Similarly, if you need to make mortgage payments while you’re away, have you budgeted enough to do so on unpaid leave? On the other hand, if you are a renter, can you sublet your room for the time you are away to cover the rent?

The most important thing, says Mike Stimpson of Saltus, is to think about it the same way you think about any other major expense in your financial plan, and apply the same rules you would for saving and spending.

Financing your trip

There is no right answer to the question of how to finance a trip, says Alexandra Loydon, director and partner at St James’ Place.

She says those taking a sabbatical should look at the whole journey in the round: how much will it cost, what income will they lose now, and what further impact that will have on the rest of their working lives.

Charles Stanley’s Stoughton warns against using a pension to fund a sabbatical because it could lead to problems later on.

By stocking more of everything each month, you can grow the piggy bank for your trip

“I would suggest using any existing savings or investments that are currently in effect, but also saving on top of that — setting aside an extra amount every month leading up to your time off whenever possible,” she says.

A good starting point for this is to try to squirrel away a larger portion of your payday salary.

If you have enough lead time (at least five years) and are willing to take risks, consider using the money you plan to pay for your trip, investing it, or purchasing a good fixed-rate savings agreement so that your money will cover all the chance to grow.

It may seem obvious, but calculating your trip wisely and taking advantage of cost-cutting options once you travel can also have a big impact on making your money go further.

Reeve of the Sabbatical Guide suggests opt for trains and buses instead of planes, and try to eat where the locals do, as it’s generally cheaper and still tasty.

Finally, make sure you have a card that does not charge you for spending or withdrawing money abroad.

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