Ask Away Blog: Financing A Career Break

Financing A Career Break

Wednesday, December 2, 2020

 

People take breaks from their career for all kinds of reasons. Perhaps you want to take a break to travel, start a family, or retrain for a dream career. Maybe you need a break for health reasons. Whatever the reason, money is usually the single biggest concern for those taking a break from their careers. How much will the break cost you? Can you afford to do it? How can you save up enough? Can you earn extra to see you through?

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Sometimes, a career break is not a choice. If you have to take a break from work due to ill health or injury, remember to look into what help and support you may be entitled to. You may qualify for some benefits to cover your costs, or if you have income or health insurance with someone like TrueCoverage, they should be ready to pay out. However, if the break is a choice, you’ll need to find other ways to save and earn to see you through.

Save Money On Your House, Car And Bills

Consider switching your mortgage provider. Don’t ask your bank, and be wary of speaking to independent financial advisers. Independent advises can be expensive, and they might not always give you the best advice, especially if they work on commission. Instead, look at newspapers or respected, trustworthy money websites, or you can ask a knowledgeable friend or a relative. Switching could lower your monthly payments, so it’s worth looking into.

If you’re planning to rent out your house while you go off travelling, it might be a good idea to change to a buy-to-let or interest-only mortgage. Just make sure you understand what these actually are and what they mean before you make any big decisions.

Get out your last three sets of bills. Visit a price comparison site, and check the prices against your last bills to see if you could save on your gas or electricity if you switched to a different supplier. If you like your current supplier, check anyway, as a lower quote could help you to negotiate a better price without having to change.

While you’re checking prices, you should also look to see if you can find lower prices by switching to a different broadband provider or a telephone company. While you’re checking the price comparison sites, also check to see if you can get lower car insurance.

You can sometimes get a better deal on your mobile phone contract when the contract is up. Just call and ask to be put through to cancellations. The company want to keep you as a customer, so might offer you some incentives, like lower monthly bills, or more data for your money, in order to get you to stay with them.

Save Money On Everyday Items

Take a look at your most recent supermarket receipt and spend some time circling or highlighting all the items that you bought as an impulse. Add up how much these cost you. Seeing how much these impulse purchases that you don’t actually need actually cost should shock you into doing this less often.

When you do go food shopping, you should always write a list before you go. Stick to your list. If you can avoid buying more than you actually need, you’ll save money and waste less food that goes off before you get around to eating it.

When you can, buy things on special offer. Only do this if it’s something that you already wanted to buy. If you needed to buy coffee and find a brand you like at a reduced price, this is a great saving. If you buy it when you don’t need it and only because it was on buy one, get one free, then you haven’t actually made a saving, and have spent more instead.

When you do go food shopping, try to use a basket instead of a trolley. You can fit less in a basket, so you’re likely to buy less. Noticing the basket getting heavy is a great way to make you pay attention to how much stuff you’re buying.

Cut back on food wastage by buying perishable foods like fruit and vegetables in small amounts every few days. This way, you’ll have time to eat it before it goes off, unlike if you buy lots of perishable items for the week or longer.

Save Money On Luxuries And Occasional Items

Try to cut down on the amount of expensive stuff that you buy that you know you don’t really need. This could be things like designer clothes, over-priced gadgets, or expensive cocktails when you go out. Could you cut back on things like manicures or facials while you’re not working?

Take good care of your clothes. If you look after your clothes, they will last longer. Make sure you always hang your clothes properly (inside out is the best way to protect them), and always wash them according to the care instructions on the label instead of just chucking them all into the machine on the same wash every time and hoping for the best.

If you need to buy a big ticket item, like a new dishwasher, try to buy it on sale if you can, or buy secondhand from somewhere like eBay or Facebook Marketplace.

Think about cancelling online film rental or television subscription services. These small costs each month can really add up, so try and manage without them. You can definitely do without if you’re taking a career break for travel anyway.

Save Money On Your Social Life

It can be tough to turn down social invitations when you’re trying to save money, but if you can, you should try to cut back on how much you go out. Try explaining to your friends why you have less spare money and what you’re taking your break for.

You don’t have to become a hermit and never do anything of course. Just try to find cheaper alternatives to your usual social plans. Look out for deals and discounts for things like the cinema, restaurants, or concert tickets. Instead of going out for dinner, invite your friends over instead.

Offer to be the one who organizes the nights out for a while, so you have more control over what the cost will be, instead of worrying that someone else will plan a pricey night out that you can’t really afford.

Working to save money and cutting back on your expenses isn’t always much fun. It can be frustrating having to turn down invitations for fun things or having to spend time digging through all your old paperwork and calling utility suppliers for better deals. If you’re finding it hard to stay motivated, and are tempted to forget your money-saving efforts, then you can promise yourself the occasional treat. Perhaps at the end of every month, if you’ve been sensible with money, or after you have saved a certain amount of money, you can let yourself have a treat. Depending on what you manage to save, this treat could be something small that you’ve cut out to save money, like a posh takeaway coffee, or something bigger, like a handbag or a new pair of shoes. Just be careful that you don’t get carried away and spend everything you save on rewards for saving. This will undo all your hard work, so don’t overdo the treats.

If you’re struggling to save, or don’t like the idea of having to make changes to your lifestyle, then you might be tempted to think about borrowing money instead. It is possible to get a loan for your career break, but it isn’t generally a good idea to do so. However, it can be an option if you need to take your break in your career at a particular time, such as if you have suddenly been made redundant and want to take a break before you look for another job, or if you want to spend time travelling before you have children.

While you’re working out what you can save or what you could borrow, don’t make any assumptions about how quickly you will be able to find another job when you decide to return to the world of work. Make sure you set aside some money for emergencies, just in case. If you do decide to borrow, take the time to shop around for the best loan for you and your circumstances and make sure that you understand exactly how much you will be paying back.

If you’re going to spend your career break learning, either by going back to college, taking an online degree or masters course or will be retraining for a new career, then check to see if you could apply for a career development loan. If you can get one, you can use it to fund your studies, and won’t have to pay interest on it until after your training has finished.

Check out all your options so you can be financially secure during a career break.

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