How to prepare for a sabbatical year?
Do you want go back to school? Do you wish to go around the world before starting your professional career? Do you feel the need to live in another way to give a new direction to your life? Whatever your motivations, whether you are a student, a boss, an employee or a self-employed, there is no age to take a sabbatical year. But you have to prepare for it financially if you don’t want that this sabbatical time seriously threatens your balance budget.
Plan what you will do during your break
Before thinking about your finances, ask yourself first why you need a sabbatical year. Describe the reasons for that decision, take the time to discuss it with someone close and analyse all possible options. Once you know what you will do during your break, carefully plan the chosen period and pay attention to details. It would be a shame if you missed your sabbatical year and you regret, at the end of the break, that you didn’t have a sufficiently good time enough.
In addition, your planning will have a major impact on your budget. Taking a sabbatical year to study yoga or to start artistic or humanitarian activities in Luxembourg does not require the same level of investment and the same management as a world tour.
Avoid any type of borrowing
Build up an appropriate fund – between 10 and 20% of your available budget – for unexpected expenses or emergencies. Don’t forget that the more free time you have, the more you tend to consume and spend.
In any case, avoid any type of borrowing to finance your sabbatical year. Saving is the best option and the sooner you do, the better it is. It is generally recommended to save 20% of your income during 4 years. But perhaps you don’t have to wait so long. It depends on your project, on the part of your comfort zone you are ready to sacrifice and… on your discipline. To avoid any temptation that could ruin your project, request an automatic bank transfer of a part of your income to a saving account. You can also invest in guaranteed investments that have a maturity date before or during the sabbatical year. Think to get rid of all your debts before starting your break and use your credit card wisely.
Take an unpaid leave or quit your job?
Sooner or later the issue will be discussed if you are salaried. Taking an unpaid leave leads to suspend the employment contract during your absence from work. In other words, you don’t have to work anymore for your company and you don’t receive any salary. Once the period is over, you can go back to your work. In Luxembourg, unpaid leave for personal reasons is not foreseen by the law. So you have to find a common ground with your employer. He has the right to deny your request. In this case, you don’t have any other choice than quitting your job and hoping for finding a new one at the end of your break.
By contrast, unpaid leave for training purpose is foreseen by the labour code but is subject to a certain number of conditions. Not all the training courses are eligible and the persons concerned are only workers who are employed in the private sector and have worked at least 2 years for their employer. The maximum period of leave is only 6 consecutive months. Your request can be refused by your employer if you are a senior manager or if the business regularly employs less than 15 employees.
What to do if you don’t have enough saving?
Don’t give up your dreams. It depends on your personal situation. If you are the owner of your lodging, why not rent it if you go abroad? And if you don’t need your car during your sabbatical year, why not sell it?
And if you travel alone, you can work part time if you are well prepared and if you have at least learned the basic knowledge of the language of your chosen country(ies). You probably won’t be rich but, on the other hand, you will know the country(ies) from a different angle, on unbeaten tracks and far from the touristic places. It is another type of wealth and only a few people are lucky to experience it!
The queen of cards. There are many different types and they offer many possibilities other than cashless payment, from differed repayment to additional guarantees on purchases.
3D Secure is an internationally recognised security standard for online payments. The service is limited in Luxembourg to credit cards.
If it’s true that when we shop in a store and handover physical cash, the pain of paying finds the act prompts more awareness about spending, and parting with cash may even hurt a bit more than swiping a bank card.