How to afford a career break or sabbatical without wrecking your finances

CTV News

12 hours ago

A career break or sabbatical doesn't have to derail your finances. Personal finance contributor Christopher Liew says with careful planning, you can take extended time off while maintaining your financial stability. (Getty Images / Sinseeho)
Christopher Liew is a CFP®, CFA Charterholder and former financial advisor. He writes personal finance tips for thousands of daily Canadian readers at Blueprint Financial.
A sabbatical or short-term vacation can be a powerful way to focus on personal growth, strengthen your relationship, spend time with a new child, or reignite your sense of inspiration. But with high living costs and financial uncertainty, stepping away from your steady income can feel out of reach.
A career break or sabbatical doesn't have to derail your finances, though. With careful planning and a planned budget, it's possible to take extended time off while maintaining your financial stability.
Below, I'll offer some practical advice on how you can prepare for a career break without compromising your long-term financial goals by using your savings, taking advantage of paid-time-off incentives, and discount programs so you can enjoy your well-earned time off and reset.
Planning ahead financially for a career break
Stepping away from work, at least temporarily, can be an incredibly valuable experience. Often it's for travel, to care for loved ones, recover from burnout, or pursue personal goals. Either way, it's generally with the intention of feeling more inspired and energetic upon your return to work.
According to a 2023 report from Telus Health, nearly half of Canadian workers reported feeling burnt out, pointing toward workers needing more flexible options (or planning) that allow them to take the time away from work that they need to regain energy, ambition, and creativity.
5 strategies to make your career break financially feasible
Taking time off work usually isn't as easy as movies and TV make it seem. Outside of emergencies, most jobs require employees to provide notice weeks — or longer — in advance. Even with advance notice, there's still a chance that your request may be denied depending on how desperate for work your company is.
Assuming that your sabbatical is approved, here are some strategies to help make it more affordable, so you don't lose too much of your hard-earned savings.
1. Leverage employer benefits
Before requesting time off, become familiar with every aspect of your workplace policies. Many larger companies offer sabbatical programs, unpaid leave options, or allow you to stack vacation and personal days, which may even include paid leave days. It's wise to talk directly with your HR department to understand what's available to you and how to make the most of your options.
In some cases, unused bonuses, commissions, or paid time off (PTO) can help extend your financial cushion during your break, giving you more time and freedom.
2. Build a dedicated sabbatical fund
I've always been a big proponent of creating an emergency fund for unexpected expenses, so you don't have to rely on credit and/or high-interest loans to cover you when you need it most.
To achieve this, treat your career break like a financial goal. Open a high-interest savings account and begin setting aside money monthly. Even small, consistent contributions can add up over the months. Estimate your living expenses during the time off and aim to save enough to cover them without relying on credit.
Treat your career break like a financial goal. Estimate your expenses and save monthly, aiming to avoid using credit. A high-interest savings account is a good start, and if you have TFSA room, consider holding the HISA inside your TFSA. This lets your interest grow tax-free. You can also use the TFSA for other low-risk options like GICs or conservative ETFs, depending on your timeline.
3. Reduce non-essential spending
In the months leading up to your break, review your spending habits. Cut back on discretionary expenses, such as dining out and using food delivery services, subscriptions, and impulse purchases. This can save you more money, much of which can go towards covering your bills and living expenses while you're on sabbatical.
4. Take on short-term or freelance work
If possible, consider part-time or freelance work either before or during your break. This can help cover basic expenses and extend the length of your time off. Just be mindful not to overcommit, especially if your goal is to rest and reset your focus.
5. Take advantage of credit card rewards
If your credit is good, then I recommend applying for a good travel rewards credit card that awards you travel points or extra cash-back for travel-related expenses. The right card can help you earn up to five per cent cash back on expenses like taxi cabs and ride shares, eating out, plane tickets, and more.
Some of the better credit cards also offer travel services that allow you to book hotel rooms, travel experiences, and dinners at a significant discount compared to paying for them outright.
Final thoughts
Even if your boss or coworkers may try to discourage it, taking a break from your job is often one of the best things you can do for yourself. When you come back refreshed, relaxed, and clear-minded, you'll be able to focus on your work and your purpose all the more and elevate your performance to the next level.
The key is to plan ahead appropriately. By saving money ahead of time, leveraging employer benefits, taking on side work, and maximizing credit card rewards, you can put yourself in a far better position to be able to take a sabbatical when you need it most.
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