Planning a Sabbatical

Those who have been following my journey know that back in late 2020, I decided to plan a 1 year sabbatical to test Coast FI. It took months of deliberate planning in order to get to a place where I felt comfortable with this drastic change in our journey. Afterall, Mr.Mod and I were only 3 to 5 years to both having reached our respective FIRE target.

If you’ve ever contemplated taking a career break or a sabbatical, you might have noticed that the appeal of such freedom is closely tied with numerous worries. You might worry about having regrets and about compromising your objective of reaching your financial independence on a certain timeline. This desire may raise uncertainty at ever being able to find such a good job again or at how others around you will react.

These are all valid and normal worries. Change is hard and scary. Now tie that change back to your ability to generate income and the worries seem exponential. Thankfully, there are strategies to help you plan & evaluate the financial impact of taking a sabbatical all the while making sure to support the mindset shift that comes with planning time away from work. 

Financial Clarity to Plan a Sabbatical

Financial clarity increases your comfort around your financial choices by helping you understand their long term impact on your goals. That’s why the very first step to planning a sabbatical revolves around having a clear picture of where you currently stand financially. 

To obtain that, you’ll want to get a good grasp on your annual expenses and other important financial metrics, then use all of this information to project out the impact of a sabbatical on your long term financial objectives. 

Importance of Knowing Where You Currently Stand Financially

Different stages of financial freedom open up different lifestyle design options. For example, if you free yourself from high interest debt, you’ve likely had a positive gap between your income and spending. Since you’ve just paid off that debt, it is safe to assume that at least a portion of that gap was being sent towards it. 

Now that this debt is paid off, you have some new options of what to do with the money you were sending towards paying it off. Perhaps you want to increase your savings rate and redirect it to your retirement investments. However, you have other options too. You could decide to quit a side hustle, reduce your work hours or take a leap to find a job you enjoy more yet that pays less. 

With regards to planning a sabbatical, there might be a few specific milestones you’d like to reach before taking the leap. The goal is to make sure that you are still making progress towards your long term goals or at least know that you are not compromising these. 

For example, having paid off high interest debt will help you avoid having a high minimum payment to cover during your sabbatical and avoid considerable costs in interests. Depending on your situation, a full emergency fund might be essential to make sure that you can be in a good position to face any unexpected costs. You basically want to know that you are able to cover your expenses over the year ahead and that doing so without generating income will not set you back. 

As such, your very first step to planning a sabbatical is to figure out where you currently stand financially. That begins with having all your financial information well organized for you to know at a glance what your total value of assets and debt load is in order to estimate your net worth. 

Financial Clarity Guide

I’ve designed a FREE tool called the Financial Clarity Guide to support you in this first step to taking control of your money. This is a great tool to find out where you stand financially and determine your next steps to planning your sabbatical.

By signing up in the form below to receive this guide, you’ll also be getting a copy of the accompanying Financial Clarity spreadsheet for your own use. It will allow you to get a fresh new view on the state of your finances. Furthermore, you can use this sheet to estimate your monthly spending and obtain an approximate budget based on your last year’s overall spending. 

The accompanying bonus 6-day email course offers all you need to identify the gaps between your current situation and your objectives, and start supporting your progress towards your goals, including planning a sabbatical.

Realistic Planning of your Expenses

Another important part to identifying where you currently stand financially & in order to start planning your sabbatical is realistic planning of your expenses. Most people believe they have a good grasp on their expenses and cost of living. 

However, if you have not been tracking, it is possible that there remains some uncertainty around your spending. Especially if you often find yourself having to dip into your emergency savings to cover costs which fall rather outside of “emergencies” and for which you could have planned for. 

That’s why it is important to find a way that works for you to track your spending. After all, determining your financial independence number directly depends on your expenses. Most people pursuing FIRE use the 4% safe withdrawal rate as a rule of thumb to calculate how much they need to have invested to consider themselves financially independent. 

You meet the 4% criteria when your annual expense represents a 4% withdrawal rate from your total investment portfolio. Or you can flip that around by multiplying your annual expenses by 25 in order to determine your FI#. 

If you are planning a sabbatical, realistic projections of your upcoming expenses are essential to plan to cover your costs over the year you intend to be away from your job. In my experience, the longer you have tracked your spending, the more realistic are your expense projections. 

Emergency Fund & F-You Money

Planning to forgo your income in the context of a sabbatical naturally leads you to evaluate if you have a sufficient emergency fund. There are many different approaches to emergency funds but I’ve found that if my clients aim to have saved up at least 3 to 6 months of their average monthly expenses, they manage to actually get to a point where it serves to cover emergencies and is quickly replenished if needed. 

However, there is also F-You money which, to me, is a financial phase that goes beyond emergency funds. As my friend Jessica who is one of the bloggers behind TheFioneers says, F-You Money is More than a Number.  It is an amount that supports your mindset shift to take advantage of an opportunity or leave a bad situation. Hitting that number can be a game changer in your comfort around planning your sabbatical.

What’s Your Timeline to FI?

Knowing your timeline to reaching your financial independence will serve to inform you on the impact of a sabbatical on meeting this objective within that time. The longer you have until you would like to reach financial independence, the more you can let the magic of compound interest do its work.

This is where concepts like Coast FI come in. Coast FI, in short, is when you’ve reached a point where you can choose to only cover your cost of living without adding to your investments and know that they should still grow to reach your FI number thanks to the return on your investments. Knowing you have a long timeline to FI is not necessarily a bad thing especially if you choose to take advantage of the freedom you’re gradually gaining along the way.

Projecting Under Various Circumstances

Once you have a good picture of where you currently stand financially, data to project out realistic expenses, a target for your ideal emergency fund as well as your intended timeline to reaching FI, you’ll want to use this information to project out the impact of a sabbatical on your goals. 

What I like to do is use a tool such as cFIREsim that allows you to add very precise adjustments to simulate the success rate of your scenario. I then like to tie this up with basic projection charts in an excel file where I can manually add changes and visualize the growth of my portfolio based on various monthly withdrawals or contributions to my investments. 

I’m not there yet!

If you find that you aren’t quite at the financial stage where planning a sabbatical makes sense or where doing so would compromise your long term goals, do not despair! As you get your financial information in order, you can start planning your next steps with a future sabbatical in mind. 

Think about how you can increase your savings rate along your journey in order to make that goal of a sabbatical achievable at some point further along in your journey. Perhaps there is a way to generate income during your sabbatical from working a reduced schedule or in a field that has always interested you on a part time basis to make it work. 

Additionally, to make this journey more enjoyable, you may want to include shorter yet significant enough career breaks along the way. Back before the pandemic, we decided to spend one month away from work traveling to Mexico. I was not quite at where I would have wanted to take a sabbatical but this shorter break was very much worth it and gave me a lot of insight on how I would like that future sabbatical to look like.

Testing a career break on a smaller scale might be the right compromise to enjoying more freedom along the way without compromising the long term goal. Plus, it’s a great way to get even more clarity on your costs and ideal lifestyle when you aren’t working. It can then serve to plan your future sabbatical with even more precision.

Supporting the Mindset Shift in Planning a Sabbatical

Once you have decided that you have reached a place in your financial journey where taking a sabbatical could make sense and not compromise your long term financial goals, it’s time to focus on supporting the mindset shift in planning a sabbatical.

As I mention at the beginning of this post, the appeal of a sabbatical is closely tied with numerous worries. In my experience and from what I’ve seen from working with many clients who were preparing to take some time off from work, knowing that you can financially do so may not be sufficient to get to a point where you are comfortable to take the leap. 

In my opinion, this is in big part what lies behind what people in the FIRE community call the one more year syndrome. That is when someone has reached their FI number but decides to work an additional year with the goal of doing so often being to add extra security to their plan.  While there is nothing wrong with working an extra year if done so under good circumstances that contribute to our happiness, this is problematic if this means staying reluctantly in your job out of worry and fear. 

The comfort and confidence to leave does not necessarily come from seeing our investment hit a specific number. It rather comes from identifying our worries or limiting beliefs, building up our contingency plans and then returning to our financial information to visualize if our projections are accurate or if we are steering off course. All of this is the crucial work surrounding supporting the mindset shift required to downshift along the journey to FI, whether it be to take a sabbatical or even to officially leave work once you have reached FI. 

Identify & Work through Limiting Beliefs Regularly

The very first step to support your mindset shift to plan a sabbatical is to identify all of the worries you have around doing so. Worries come in various forms but they are frequently coming to us in the form of a limiting belief. That is a belief that limits or restricts you in some way. 

In the context of planning a sabbatical, our worries become limiting beliefs when they are preventing us from taking action on this goal of ours even though we know that it won’t compromise our long term financial goals. While there might be some truth to the worry itself, there may be ways to overcome and mitigate those risks which can help us turn the limiting belief into an empowering one.

I suggest that you set up a timer and spend 15 minutes brainstorming all the worries that planning to take a sabbatical brings up. This will serve to help you dig deeper and find those deeply rooted limiting beliefs that you want to work through. 

My friend Jessica from The Fioneers has an excellent post on Conquering your Self-limiting Beliefs with a free guide to do so. I suggest using the 6 strategies identified in that post in order to conquer your limiting beliefs around taking a sabbatical.

This will be incredibly beneficial not only as you plan your sabbatical, but also all throughout the process of taking this time off. As our confidence fluctuates, new limiting beliefs pop up frequently. Even though my sabbatical went well and led me to officially decide to leave work, there are days where I find myself filled with either old or new worries. On those days, I return to this process to find out what I can do to adjust my perspective and increase my comfort with my choices. 

Build your contingency plans

The next step to supporting the mindset shift in planning your sabbatical will be that of building up your contingency plans. I mentioned above that there may be some truth to the worries that come up with regards to your sabbatical. This is where having contingency plans in place can make a huge difference. 

For example, if you work somewhere that does not allow employees to take a one year leave, you might need to quit your job in order to take your sabbatical. This may bring up the worry of not having a job to return to, which is a very valid concern. To build a contingency plan around this, identify what you will do to mitigate the risk of not finding a new employment opportunity. This could include subscribing to job alerts in your field and letting your professional network know that you will be looking for a new employment opportunity at a specific moment in the future. 

When I set off on my sabbatical from my 9 to 5 job, my intention was to run my business on a part time basis to cover my cost of living. One of my worries was that this income is variable and I may find myself having to withdraw from my investment portfolio, which could happen at a time where the market is performing poorly. 

As such, to build a contingency plan around this, I brainstormed all the other ways that I could generate some income on short notice to help cover some of my costs during my sabbatical. Even though I’ve yet to turn to any of these, I’ve made sure to add details in my contingency plans to increase my confidence in knowing what I would need to do next to put these into action if needed. 

To build these contingency plans, you can start by brainstorming the potential obstacles and fears that may show up during your sabbatical. Then, for each of those obstacles or fears, ask yourself: 

  • What would be the real challenge here ? 
  • Are there ways to mitigate this challenge ?
  • What would I do if this happens ?
  • Have I ever faced similar circumstances? What worked for me then?
  • Who might I turn to for support or who has experienced this?

Keep track of all your numbers

An additional step that I’ve found incredibly useful in supporting the mindset shift of planning a sabbatical is that of keeping track of all your numbers. More precisely, I’m referring to tracking the value of your investment portfolio, your emergency fund and your monthly spending. 

This comes back to the power of having financial clarity. It’s one thing to have projections on hand showing you that you are well on the way to eventually reaching FI, it’s another to actually see this come to fruition. 

Find a way to track your numbers alongside your initial projections. That way, you’ll be able to verify if you are still on track to meet your long term goals and adjust if that is not the case. 


I’m hoping this post empowers you to make your dream of a sabbatical a reality. It takes deliberate effort to implement these strategies to plan & evaluate the financial impact of taking a sabbatical all the while making sure to support the mindset shift that comes with downshifting while on the journey toward financial independence. That being said, I can tell you from experience that it’s well worth it. 

Some folks are fine with a linear and often shorter trek towards reaching their financial freedom. But others, like me, see the value in utilizing some of the freedom acquired on the journey to get closer to living our ideal lives long before reaching FI. While it may add some extra years to the journey, our new found freedom may help us find ways to generate income from endeavors that fit better into our lives and bring us more joy than traditional careers. 

Have you ever considered a sabbatical? If you’ve already taken one or another form of career break, what helped you plan this shift?

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