The economy is doing quite well in the US and many physicians are considering taking a sabbatical from medicine. Funding your sabbatical is therefore the next consideration. Should you pay for it from savings, work and save up, or work while on your sabbatical?
Funding Your Sabbatical
It’s not just your travels and activities that you have to fund in your sabbatical but also your student loans and your housing payments.
Regardless of the source of funds for your sabbatical, it’s a good idea to have a budget in mind, Otherwise it’s quite easy to spend way more than you anticipated.
#1. Spending from the Savings
Spending from your savings account or cashing out retirement funds to fund your sabbatical is the least effective method.
The money you have saved up and invested is busy growing in value. If you cash it out then it can no longer earn a return for you.
If you’re going to fund your sabbatical by tapping into your savings you should be militant about it. Know exactly how much you will take out and create a strict budget.
I would also have a plan to replenish that amount once you get back to work. It’s a good habit to learn or else you might raid your savings frequently.
#2. Save Up
If possible, consider transitioning from your current work to a locums work or a per diem gig before you officially start your sabbatical. This will allow you to save up money before you pull the plug.
By doing a locum tenens gig you’ll be in a new environment and that can give you a little breathing room. Or if you’re doing per diem then you can at least have a little more free time.
The money you earn can then go towards funding your sabbatical without any risk of needing to raid your savings.
#3. Cut Back Spending
A sabbatical is a great way to develop some mental clarity. It takes a few months of this before your brain can even think straight. Practicing medicine full-time tends to rob you of that headspace.
But just because you’re taking a sabbatical doesn’t mean you can’t budget aggressively. After all, you’re not in a peak earning situation; spending without regard here will just add anxiety to your life.
One great way to cut back on spending is to take your sabbatical abroad. Cost of living is almost always cheaper abroad.
A working sabbatical is a bit of an oxymoron but many docs end up volunteering or taking a clinical course while on their sabbatical. So why not work on your sabbatical?
The point isn’t to fund your entire sabbatical, just enough to lift some of the financial pressure of not working full-time.
Lots of telemedicine companies can get you credentialed rather quickly. And a few will let you work while abroad. All will let you work from any US state.
#5. Side Income
Of course, if you’re planning your sabbatical far out in advance, you can generate passive income through other methods. Including the sale of digital products, such as online course.
I love this list by Passive Income MD – it should spark all sorts of passive income and side hustle ideas.