Plan a long way ahead
No matter what you’re planning to do with your year off, it’s wise to plan your leave at least a year ahead of time.
- Want to go travelling? You may have to learn a new language and you’ll need to find out how much accommodation and transport, among other things, will cost when you get to your destination.
- Planning to do some renos at home? Get some quotes and choose your contractors ahead of time so you can get things started as soon as possible.
- Want to start a business? Draw up a business plan, prepare your website, get in touch with prospective clients and work your network.
Set goals for yourself
Whatever your reasons are for taking a year off, it’s important to set goals for yourself. The idea isn’t to organize your time off down to the second, but rather to help you glean the most out of it.
The financial side of things
You should start to plan the finances for your time off at least a year in advance. Here’s what you’ll need to factor in:
- Your everyday expenses (accommodation, food, entertainment, clothing, etc.)
- Any costs you’ll incur in carrying out your plans that don’t factor into your everyday expenses; for instance, you’ll need to budget for tuition fees and textbooks if you’re going back to school
- Costs for maintaining any insurance coverage you have through your employer; generally speaking, your employer won’t contribute to your plan while you are away
Even if you’re taking time off to try out a new job, your salary and working conditions may not necessarily be the same.
Check whether your employer offers you the option to take a deferred salary leave, which would set a chunk of your salary aside for a few years (typically 20% per year for four years). The money set aside would then be paid out to you during your leave.
If this type of arrrangement isn’t an option, you’ll have to set money aside yourself—in a tax-free savings account (TFSA), for instance. This will take a great deal of discipline and can mean making some sacrifices.
Plan your return
A year off is often a time of great reflection. When the time comes to go back to work, it will take some time to adjust, since you’ll have changed and learned new skills, and your priorities might well have shifted. Talk to your employer before you go back about what’s happened at work while you’ve been away and things that have changed. It’s a good idea to discuss your expectations when it comes to work and the options that might be open to you.