How to fund a career break the right way

financial stability.Here’s how careful planning and a simple investment strategy can help you enjoy your sabbatical without constant money worries.“Every financial goal has a time horizon, which depends on personal circumstances and demographics. For example, when you plan to take a sabbatical, how much money you will need during that period to meet your expenses, and how long the sabbatical will last,” said Shantanu Awasthi, chief executive, wealth management firm Mavenark.Treat your sabbatical corpus as a ‘sinking fund’, a specific bucket accumulated specifically to be consumed like your emergency fund.

“Never co-mingle this with your retirement or education portfolios. The sabbatical fund should sit in low-volatility debt instruments, while your long-term goals remain in equity,” said Anooj Mehta, vice-president, partner success at Sebi-registered investment advisor (RIA) 1 Finance.“An emergency fund already existed in my portfolio, so it did not need to be recreated.

I planned monthly withdrawals from my investments to meet expenses, while one-time costs such as school fees or insurance premiums were withdrawn separately when required,” said Jahagirdar.“For anyone considering or facing a similar situation, I’d suggest trying to build at least six to nine months of essential expenses in savings. Create a lean budget and track it, and avoid taking on new debt if possible,” said Naz.She added the first thing she did was review her savings and figure out how many months of essential expenses they could cover.

“I focused only on basics like rent, food, utilities, medical costs and transportation,” she said.Most people underestimate how long the return takes. They plan for a three-month gap and land in a nine-month one.