I Lived the Dream and Travelled the World for a Year. Here’s How I Paid for It.
When I turned thirty, I had a bad case of burnout.
At my office, I spent my days slumped over a desk, overwhelmed by deadlines and longing to explore the world outside my cubicle. After a decade of working full-time and receiving several promotions, I desperately needed a break. Instead of feeling proud of my career success, I just felt tired and trapped by what I once considered my dream job.
A two-week holiday wasn’t going to cut it. After some introspection, I realized what would recharge my battery: a sabbatical year. Instead of deliverables and deadlines, I wanted to prioritize pizza-making in Italy or hiking in Hong Kong or snorkelling over the Great Barrier Reef. Once the idea floated into my head, I got serious, crunching numbers and pricing seat sales.
Five years later, I took a one-year unpaid leave of absence from my office job. During those twelve months of glorious freedom, I spent my days flying to new destinations to peruse markets, taste fresh foods, meet new friends, and check off an endless bucket list of activities. Naturally, everyone always asks me: “How did you afford to take a year off work?”
The answer is simple: I planned for it. The truth is, there are some very simple ways you can save money to take a year off from your day job.
Ask the Boss about a Deferred Salary Leave Plan
The good news is that you don’t necessarily have to quit your job to take a sabbatical year.
Many workplaces will grant a leave of absence (LOA), recognizing that it helps prevent burn out and increase worker productivity. Whether it’s to complete a Master’s degree, to travel or to just laze at home, employers are now recognizing the importance and value of giving staff the freedom to pursue their personal goals.
Many offices, like mine, instituted a “deferred salary leave plan” (DSLP) permitting staff to fund their own LOA. Basically, for a set amount of time (usually four years), Payroll deducts a hefty chunk of your salary from every paycheque and deposits it into a trust fund, which cannot be touched until the final year.
If your workplace hasn’t set up a deferred salary leave plan, don’t sweat it. Ask your boss about an unpaid LOA instead. Even though my office had the DSLP, I chose this option to avoid the rules and restrictions of the self-funded leave program (some set by Revenue Canada) and to have more flexibility to access my funds.
A word of advice: make the request months (or even years) before you plan to take time off. This shows respect for your employer and allows your boss time to find a temporary replacement—boosting the likelihood that your leave will be approved.
Start a Travel Fund
Since I opted out of the formalized DSLP, an automatic savings plan was my secret weapon to saving for my sabbatical year. Every two weeks, a lump sum was deducted from my paycheque and deposited into my Tangerine No-Fee Daily Chequing Account. I liked this account because it pays customers an interest rate of 0.15% to hold their money—a feature usually reserved for savings accounts—but doesn’t apply any restrictions or fees on how they use the money in their account. So I could freely move money between my Tangerine accounts without being dinged transaction fees.
I started with small amounts, and gradually increased to larger deposits ($450 every two weeks). I calculated that this would save $11,700 per year, and $46,800 after four years of saving. I treated this special chequing account as sacred dollars, not to be touched until I was ready to buy those plane tickets.
A lot of people say: “I can’t afford to do that.” Maybe you can’t save $450 from every paycheque, and that’s fine. Find an amount and a timeframe that works for you, and set a realistic goal for how many months you can take off unpaid from your office job. Then set up an automatic savings plan into your bank account.
At the end of every month, I transferred those dollars from my chequing account into a Tangerine Savings Account, which quickly grew into an ample vacation fund. With no fees or minimums, and a 1.10% interest rate, it helped me achieve my goal: after four years, I had saved one year’s salary in my “travel fund.”
Stock Up on Travel Points
Another hack is to stock up on points offered by credit cards. Loads of credits cards offer perks, but I chose the Scotiabank Gold American Express Credit Card. It offers one of Canada’s richest accelerated rewards rates, with 4 points per $1 on gas, grocery, dining and entertainment spend, and 1 point per $1 everywhere else. The sign-up bonuses are also attractive (currently 15,000 points), and can be used for anything travel-related. Plus, it’s super flexible when it comes to redemption: there are no blackout dates or fine print, and can be used toward any travel-related expense.
While saving for my sabbatical, I charged everything onto my Scotia Gold Amex, racking up travel points and paying off the balance monthly. When my year off rolled around, I cashed in my points to upgrade to Business Class on my 26-hour flight to Australia, saving thousands of dollars and flying much more comfortably.
Another thing I love about this card? It includes comprehensive travel insurance and car rental insurance – essentials for venturing abroad. These bonuses allow you to funnel more hard-earned cash into the travel fund.
Consider a Home Equity Line of Credit
Since I owned my condo, another option that I explored was getting a home equity line of credit. As my bank manager said, it offers a lower interest rate than regular credit cards, and can act as a handy “911” fund for emergencies on the road. For instance, although you may have travel medical insurance, it’s standard to pay out of pocket for (sometimes expensive) treatments and get reimbursed by the insurance company later. If you don’t have the cash on hand, a home equity line of credit could literally be a lifesaver. Ultimately, a home equity LOC gives you the flexibility to make purchases during your year off without having to worry about alarmingly high interest rates. Just make sure you don’t default, because if you do, the banks get your house (yikes!).
So before booking those round-the-world flights, remember: a little planning can yield a big reward. And don’t forget to pack that plastic. Bon voyage!