If travel is your priority, no one and nothing should get in the way of you pursuing your dreams. With that in mind, balancing your desire to feel fulfilled today with your need to build a financially secure future is crucial.
Should you cash in your 401(k) to fly to Europe? No, definitely not. But if travel is essential to you, you can prioritize your discretionary dollars to align with your greater goal.
Is Now the Right Time?
Before diving into the details, pause and consider if now is the right time for you to get out of the office and travel. What’s your “why” behind the decision? Is there a specific reason you’d like to take time out of your career to do this, and how will you ensure it’s a fulfilling experience?
If you like to spend time on Tiktok or Instagram, is it possible this decision is influenced by what you’re seeing others do? In other words, is FOMO at play here? The shiny, picture-perfect lifestyle others promote on social media makes it easy to be dazzled. They’re so good at creating FOMO that an entire influencer industry is built around people selling lifestyles and products.
But consider the reality on the other side of the camera lens. Are these full-time travelers (or so they claim) being sponsored by big companies who fly them out and comp their expenses? Or are they genuinely finding ways to afford lavish travel alone?
This isn’t to say putting a pause on your career to travel for a year isn’t possible, but you owe it to your financial well-being to stop and consider your intentions behind it. If you’re doing it for the ‘gram, perhaps that’s not the most fulfilling venture — especially considering how much goes into preparing for a gap year.
Think about your intentions. Would you like to immerse yourself in a new culture? Explore an area that’s a part of your family history? Learn a new language? Or do you want to fulfill a bucket list item, like step foot on all seven continents? As you start diving into planning for this adventure, use your intentions as a way to stay motivated and excited about the adventure to come.
Think Through the Logistics
How much you spend traveling will vary wildly depending on several factors.
For starters, keep in mind just how long a year is. Spending $100 a day equates to $36,500 (not including any unexpected emergencies or expenses). In some areas, $100 a day is more than enough for food, lodging, travel, and excursions. In other parts, $100 likely won’t cut it.
Do some research about where you’d like to travel to and what you can expect to spend per day, week, or month. Don’t forget to include additional expenses like plane or train tickets, car rentals, and insurance.
Remember that while a hostel or budget motel might be an easy way to cut costs, a year is a long time to spend in a community living space or cramped quarters. Give your budget a little wiggle room to splurge on a nice hotel room or Airbnb occasionally. You may also want to look into coliving spaces (perfect for digital nomads who don’t mind sharing a multi-bedroom home or apartment!), or even furnished Airbnbs or long-term rentals. These options can help you to find a balance between budget and living comfortably. Remember, regardless of what you choose, this is a once-in-a-lifetime opportunity, and you deserve to enjoy it.
Are there opportunities to save money if you plan on traveling with someone else? For example, you could split costs on things like lodging and car rentals. Is this other person working with a similar budget to you, or is there the possibility of friction over spending expectations? If so, this is something to talk through carefully beforehand.
When you go away, what are you leaving behind? If you have pets, you must make arrangements for long-term care. Have you considered leasing out your home or subletting your apartment? This could be an opportunity to offset some of your ongoing expenses while you’re not using your space.
With plenty of time before your travels, write down the little things you must accomplish before heading out. If you’re going abroad, you’ll need a passport, for example. Allow several months turnaround time from sending your application until you receive your new passport. If you already have one, check the expiration date. Some countries won’t let you in if your passport expires within a few months of entry.
Some other considerations include:
- Obtaining travel insurance
- Applying for visas (if applicable)
- Check for travel advisories
- Exchanging currency
- Alerting your credit card and bank
- Getting international cell phone and internet access
- Booking travel, accommodations, and excursions
- Building an itinerary for your emergency contacts/family members
- Getting mandatory vaccinations or preventative medicine (for certain countries)
You’re bound to keep thinking of things as you prepare for your trip, so start building your to-do list early and add to it as new items arise.
Work Considerations & Other Income
If you plan on taking an absence from work rather than quitting altogether, you’ll need to work closely with your employer and give them ample notice. More employers are adopting ample paid time off policies due to the Great Resignation, which means it may be easier than you think to leave for an extended time. Some companies offer sabbatical leave, and others may be open to the idea on a case-by-case basis.
The key is being transparent about your intentions and as helpful as possible in ensuring your duties are covered in your absence. Create training materials, work closely with your colleagues to gradually introduce new responsibilities, and allow everyone involved to ask questions and train with you.
Your employer may allow you to reduce your hours and work part-time overseas. This, of course, poses some challenges with time zone differences and needing help locating reliable internet. But with the rise in remote work, it may be doable based on your specific job requirements and level of autonomy.
If you plan on leaving your job and making this a career break, do you have a plan for when you return? Will you seek a new job in the same field, or are you using this break to pursue new opportunities? Perhaps as you embark on this adventure, you’ll find new areas of interest or relocate permanently abroad. Keep an open mind, and you never know where the path ahead may lead.
You can also use this opportunity to create additional income streams for yourself and your family. For example, earning income from investments, rental properties, or a side hustle can help to offset the costs of traveling for a year instead of solely draining savings. You could even consider renting out your primary residence while you travel for the year to cover your mortgage costs (and some living expenses!).
Calculating the Costs
Once you know whether or not you’ll be earning income while taking a year off from your full-time job, it is important to sketch out what the true cost of this adventure might be. It may be that you’ve dismissed this idea before figuring out the costs. I suggest that you go through the Dream Lining exercise that Tim Ferriss made famous to get a better sense of the costs associated with a year abroad.
You are not the first person who has taken a year off of work, so do some research on blogs of others who have done something similar so you can avoid common missteps and make sure you’re accounting for things you might not have planned for.
Time to Take the Plunge?
Your wealth should be used as a tool to help you live a more fulfilling and happy life. If life includes lots of travel and adventure, taking time away from work could be just what the doctor ordered. Of course, plenty of preparation and consideration goes into a decision like this.
If you’re wondering whether your current financial situation can support some time away from work, you may find it helpful to talk to a financial advisor. Our doors are always open, and we love to help folks like you align your wealth with your dreams.