A sabbatical doesn’t have to ruin you financially but it needs to be carefully planned and executed and most likely you will have to make some sacrifices . Here is how we did it – I hope this gives you some ideas and trips on how to save for your sabbatical.
It is not easy but it can definitely be done!
Get Rid of Debt First
Still paying off student loans or maybe a nice car. If at all possible pay that debt of before you go on a sabbatical so you don’t have to plan for and worry about making those monthly payments while traveling. If you can’t pay your debt off in its entirety you need to reduce it to a manageable level that you can realistically keep paying while on sabbatical.
Save Money for Your Sabbatical
There are many sites that give advise on how to save money from the obvious – expensive branded coffee every day – to the less obvious – all that money for memberships and subscriptions etc. one signs up for once and never cancels. Each sum might not be very large, but things add up. One of the blogs my husband enjoys is Mr Money Mustache which lists more tips, information and discussions on the topic than I can possible ever dream of providing. Have a look and get inspired to save for your sabbatical!
Here are a few of the strategies for savings that add up that we used.
Not buying a new car saves money big time! We both own seriously old cars. When we left for our sabbatical my husband’s 1996 Camry’s Kelly Bluebook value was around $380. By now it has more than ¼ million miles. Since we also use the car for our business, it actually makes us money rather than costing us.
Do I sometimes wish to have a nice new car with leather seats, new car smell and modern technology rather than a cassette deck (you read that right)? Sure! Enough to pay $20-30K for it? No! Time and again the question comes up: should we buy a new/“new” used car and time and again we postpone – it’ll do another year, or two. This is probably our biggest ticket savings opportunity.
The car offers another opportunity to save: your daily commute can add up. You probably never thought about car pooling with a colleague or taking the bike if you live close enough to work – but that can save you quite a bit of many. Maybe you can work from home one day a week. Even saving $20 per week, over a year adds up to about $1000. This website has some basic tips and ideas which certainly won’t work for everybody but can get you thinking.
One can spend a fortune on the newest electronic gadgets. But keeping the ones you have a little longer helps saving money. A friend recently commented that my tablet looks like it has been through WWI and I have to admit he has a point. My cell phones are generally several generations old or bought refurbished, no gaming console or surround sound system has ever been installed on our house and our TV is tiny. The one thing we don’t skimp on are computers, we both use them for work every day abut other than that it’s “use it until it breaks”. For us the pleasure of a trip outweighs the desire to have the very latest electronic gadget. We made the conscious decision to view these things as tools of everyday use rather than status symbols.
If you travel a lot for business collect those frequent flyer miles and use them for flights or upgrades. Alternatively, you can use them for those nights you need a hotel room during your sabbatical. We did not do it back then but have since signed up for a few credit cards that offer sign-on bonuses in form of miles. The trick with this is to be super disciplined about the cards you get: you can only use them to buy stuff you need to pay for anyway, buying something because you have a shiny new credit card with a nice credit limit completely defeats the purpose of this whole exercise.
We accumulated a lot of miles/hotel points using this method:
- Make a list of the available credit cards, list the bonus (e.g. 50,000 Miles) and the requirements (e.g. spend $5,000)
- Select the best deal/s
- Figure out whether you can meet the minimum requirement (in the time frame required) without making extra/superfluous purchases. We used the cards to pay for our health insurance or other payments we have to make anyway.
- Once the minimum is met and the bonus earned retire the card and decide whether you want to do the same thing over with another card.
- Keep in mind that opening a new credit card temporarily negatively impacts your credit score so you might not want to overdo it. It also takes a lot of time to do this so decide whether it is worth your time.
Subscription, Memberships, etc.
It is amazing how many subscriptions, memberships and other recurring yet often unnoticed services one ends up paying for without using them. Over the years we ended up with more magazines than we could possibly read, some that we didn’t even want and couldn’t remember how we got them in the first place. Then there were online memberships, like the Consumer Reports I once signed up for when we needed a new washing machine and which just kept going. Or the premium version of a online networking site that I got pretty much zero value out of. There was the TV package that contained like 93 stations most of which we never watched and which certainly weren’t worth the extra $40 per month. Sounds like a small amount? Well, think again, that’s $480 in one year and in many places enough to rent a house for a week or two.
My husband renegotiated our gym membership fees and we canceled the climbing gym. Sure, we liked to see ourselves as rock climbers but – as hard as it was to admit – we had slacked off substantially and hardly ever went there. That saved us another $500 per year.
So go through your bills and credit cards charges and find those items you no longer need, never needed in the first place, or can easily do without and cancel them.
Many Other Things
Only you know what you are spending (too much) money on and only you can decide were to cut to save for your sabbatical. Is it clothing? That expensive shoe shopping habit? Fancy restaurant meals? Too many toys and clothing for the kid? Expensive weekend trips that are fun and all but would pay for a week or more in some other country? Saving money can actually be fun and a challenge, especially when you do it with your sabbatical in mind.
Keep it Real
We didn’t go from an extravagant lifestyle to being misers but we adjusted out habits and were more conscious about what we spent where and how, e.g. we didn’t stop going to restaurants or only bought 2 buck chuck. But we started skipping during most dinners out which, where we live, can cut the bill in half. I used to buy designer clothing but between having a child and saving for the trip these costly pieces were replaced buy more affordable and easier to care for items. Our boy wore hand-me-downs on occasion and didn’t care one bit about it and didn’t mind the toys other kids had already played with and the books from the library.
We found out that many small adjustments can have a big impact over time.