The concept of a gap year is to take a break from your career path and spend 12 months either travelling or living abroad doing something completely different from your normal life.
This is often done during the year between high school and starting university/college or starting a ‘real’ job. Isn’t it funny how we think we need the break at this point in life when so many of us are about to sign up for a few decades of this thing called work?
Don’t get me wrong, a decent break at this age is the best thing you could possibly do for yourself. Detach from the parentals and go nuts for a bit. See the world!
BUT… why should a gap year only come at the very beginning of our career paths? Short answer – it shouldn’t. There is real benefit to factoring in a few more “gaps” later in life.
We recently surveyed a number of our readers and one of the questions was “What is your biggest lifestyle challenge at present?” and the answer that came from almost everyone was “finding a better work/life balance” or similar. We’re all working our butts off and this is one way to keep the fire in your belly stoked. Have a plan to take anywhere between 3-12 months off, even if it’s only once every 5-10 years.
Stopping what you’re doing and doing something completely different, resetting, is the best way to get motivated and get your spark back for the day to day. It may also be a good chance to take a step back and really think about what you’re doing and if you’re on the right trajectory. What is your definition of a sufficient life? And are you really living it?
So here’s some tips on how to make a gap year happen, when you’re in the middle of your career:
“Nobody ever wrote down a plan to be broke, fat, lazy or stupid. Those things are what happen when you don’t have a plan” – Larry Winget
Like everything, any major changes need to be planned for in advance. If your planning 12 months off, don’t make the decision six weeks out.
You don’t necessarily need to plan everything for the trip but your finances will thank you for being prepared and wrapping things up properly before you leave. This includes breaking your lease/selling/renting out your home, stopping regular direct debits, cancelling unnecessary insurance (speak to your adviser before playing with your life insurance). Also arranging storage, and maybe selling your car and a heap of other items you can use to free up some cash.
Think about the vision for your gap year. When you get back home, how do you want to feel? What problems might you be trying to solve?
How do you cut ties
Chances are, unlike your post high school self, you have things that connect you with your current life. Whether that’s your house, car, commitments, contracts. You need to figure out what’s tying you down and how to release the strings.
- Make a list of what’s tying you down in the one spot
- How do you break away from it or press pause?
- What do you want to retain? What will you let go of?
Talk to someone else who’s done it. Chances are they’ll have some good tips and you can learn from things they may have forgotten about, or would do differently.
Get your house in order
How will you manage things back home. Some things will have to keep going. All the things on your “retain” list.
Who do you need to lean on for help? Whether it’s someone to mind a pet or some furniture, think about who you have on the ground that might be willing to step in and help out. And don’t forget to return the favour.
You might be keeping assets at home that need to be maintained. If you chose to retain assets like your home, think about how you’re going to do this remotely. Are you going to opt for a long term rental, house swap or think about Airbnb. The downside of Airbnb might be that you will need to do some admin (from the comfort of your deckchair via phone or laptop), and you could risk vacancies, but the flipside is potentially a much higher income, which may help fund a longer time away.
If you’re not keen on selling your car, you could opt for renting it privately or using a community like Drive My Car (Australia only). Keep in mind you may need someone on the ground willing to help with this, as well as routine maintenance in this case. Alternatively, think about including it in a house swap package.
Plug in the money
Do you plan to earn money while you’re away?
Do you plan to save up and cover your expenses from savings alone whilst you’re off? These two questions are going to be vital for your plan.
Figure this out and don’t forget to have a contingency in case it doesn’t work the way you intended.
Don’t forget about taxes, both at home and away (if you’re earning an income). If you’re renting your home out back home, make sure you understand the tax implications and deduct this from your spending kitty.
Don’t forget about superannuation. Although you might not be earning an income back home, you can still opt for voluntary contributions. Think about redirecting any share dividend, or partial income from asset rental to your super balance during this time.
Take out insurance. Travel insurance is essential when you’re away from home, as minor mishaps can stack up and leave you with large bills. Don’t leave the country before speaking to a financial adviser about life insurance. You may not need this but it’s best you hear it from a professional. There are cost effective ways to make this work for you, but please don’t set it up without seeing a professional as the insurers don’t make this stuff easy to navigate.
Make sure this doesn’t just sit on your bucket list. Set your vision, plan it, figure it out and MAKE IT HAPPEN.
Where will you go in your gap year?
Keep an eye out for a follow post on this topic: How to arrange your finances for extended travel time