Over your working life, you will most likely withdraw from full employment for various periods of time. This is called a Gap Year. Some may be unplanned while the exact time for others will be approximations depending on the nature of the Gap Year. Find ways to fund your Gap Year.
A Gap Year is a term used to describe leaving the workforce and following other pursuits for a short period. Sometimes, you may need to supplement your Gap Year expenses with some part-time employment. The Gap Year may also be less or more than one year. The time can also be described as an interval, pause, recess, or interruption.
Gap Years can be segmented into categories, some of which are:
- Travel (read our blog : How to keep your money safe when traveling.)
- Family duties like having a baby (our most popular blog post)
- Sickness or Accident
Gap Year Travel
It has been quite popular for young people to take a Gap Year after they have completed their studies and commence their career. Most students work part-time during their studies and may choose to save for post-study travels around the world. There may also be opportunities to work part-time while overseas.
Use Financial Mappers for detailed budgeting with access to monthly budget programs.
Career changes are now more common with increased opportunities to study part-time and increase qualifications. However, there may be times when it is more efficient to simply take off time from work and study full-time.
Use Financial Mappers to create a savings plan so you have the funds available for fees and living expenses while you work.
(Like having a baby)
When it comes to planning a family, the exact timing may be uncertain, but you can start to plan now so the funds are available for the time when one parent plans to stay at home and look after the children. Both Mums and Dads can share this very important role. It is something that needs to be discussed before the event so that savings can be accumulated to supplement the lower income over this time.
Use Financial Mappers to create expected Salary adjustments for each partner and create a savings plan that can be used to supplement salary during this period of reduced salary.
Sickness and Accidents
This is something that you cannot nominate a time as the events cannot be predicted. The major chronic conditions that may affect the workforce are
- back pain
- cardiovascular disease
- chronic airways disease and
- mental illness.
Fortunately, there may be risk-management insurance you can purchase such as Accident and Sickness or Trauma insurance. However, not all conditions may be covered.
Emergency Fund & Sick Leave Entitlements
There are some simple things that you can implement for yourself, particularly where you have permanent employment with reduced risk of being made redundant. These are:
- Create an Emergency Fund that could be a Cash Account or a Managed Fund that can be liquidated should the need arise. Set a target of how many months you are likely to require should you be unable to work.
- Do not waste your Sick Leave entitlements. Check the details of these entitlements. Some public servants have accumulated years of sick leave. But if they should suffer a chronic or terminal illness, they will be entitled to use those sick leave entitlements.
Please watch this 40-second video clip Funding your Gap Year with Financial Mappers and share it with your friends.
Glenis Phillips SF FIN
Check out these other articles about Gap Years:
- Wondering what to do in a Gap Year? Here’s How to Spend it
- I took a Gap Year at 20. Here are 10 lessons I learned