Sabbath Year – After Six Months – How To Afford A Sabbath Year

Now half way through my inaugural sabbath year I’ve gained a lot of understanding about the benefits and difficulties of an undertaking like this. As I transition from six months of not working back into my career I face a few more adjustments and learning opportunities. In some ways it will be difficult to try to continue to sabbath while also working a demanding job, but my suspicion is that will actually be easier for me than parenting full time.

Without much else to share in this update I wanted to turn to a topic that usually comes up quickly when I mention I’m taking time off of work – that of money.

As we’ve told family, friends and people we just met about our sabbath year situation, some outright ask ‘how can you afford to do that?’, others joke ‘wow, you must be rich’ and some have the question on the tip of their tongues but can’t quite phrase it in a way they’re comfortable uttering.

No need to figure out how to ask it, I’ll just tell you. Lets talk about money.

How to Afford to Take A Year Off of Work

Though I’m taking six months off of work, we had budgeted for one full year. Specifically, on day one of my sabbatical, I had a savings account with enough money in it to cover one years worth of our family expenses. We had been saving that money over a period of about four to five years, earmarked for this sabbatical and separate than other savings; retirement, house down payment, kids college, etc.

How did we save that much money?

The math is really quite simple, you need to stretch six years of salary over the course of 7 years. 6/7 is equal to 85.7% so you need to save about 15% of they money you currently spend in order to have enough at the end of year 6 in order to afford year 7.

Taxes, retirement account contributions, church tithes, etc. don’t materially affect the math. Those things all come out before you get your spending money, which is what most people are used to thinking about as their income anyhow. The spending money is the part you need to drop by 15%.

(Note to advanced budgeters: that means that 15% savings you need to get might actually only be 7% of your total salary. This is because 50% of your salary might be in those excluded category of taxes, earmarked savings, church tithes, etc. This was the case for us.)

How do you do that? You just lower your standard of living appropriately. Out there right now is some family near you that is living on 15% less money than you. If you do what they do, you will save enough money.

Here are some examples of saving 15% on specific spending categories

  • Get a new iPhone every 28 months instead of every 24 months
  • Opt for a free mode of transportation (carpool, bike, walk, etc.) to work for 3 days per month
  • Reduce your family vacations from 7 days to 6
  • Drop the number of times you eat out by 20-30% per month (groceries tend to cost about half as much, or less, than eating out) – so if you eat out 10 times, make it 7 or 8 instead.

You’ll notice notice all of those are slight adjustments, none of them require you to dramatically change your life. Those small adjustments are all it takes.

But, if you don’t want to adjust everything by 15%, you can chose to save more than 15% on some category in order to not have to cut back other categories as much. You can make large wholesale changes that have a larger impact.

During our saving period, my wife and I lived in a studio apartment as our family grew to include two kids. We saved roughly 50% per month on rent, our largest expense. Because of the size of that change, we were able to catch up with the fact that we didn’t actually have six years to save.

Was it hard work? Yes. Was it worth it to be able to take a year off of work? I continue to think so.

Two Weird Tricks to Save a Lot of Money

1. Don’t Spend Your Raises

This is the best savings advice I’ve ever gotten and I pass it on often.

The easiest way to save money is to never have to cut back your lifestyle in order to save it. The easiest way to do that is to earn more income but never change your spending. That way you don’t mentally feel like you’re moving backwards, you just feel like you’re staying in the same place but all of a sudden you have saved a lot.

If you can’t yet bring yourself spend none of your raise, at least don’t spend all of it. Save 10%, 20% or 50% of it by only adding the other part of it to your budget (or by stashing it away via auto-transfers so you never see it). That way you’re getting some bump in lifestyle but also reaching your savings goals.

This is particularly effective during the early parts of your career when your salary growth is the most rapid due to you going from having no experience to some. For most people, of various salary and education levels, their salary will double from when they start working to their peak some ~20 years later.

For the purposes of saving 15% you would actually want your salary to be 30% higher by the end of 5 years. That is because the years would average out – the first year with 0% growth averages with a middle year of 15% and the final year at 30% – that equals 15% total, which is your goal. Using the chart above, you can see that 30% growth over 5 years is reasonable for the early years of various income levels.

In our case, this was in large part how we were able to do it. We just kept trying to spend the same amount. During the first year I lived in an apartment I could afford and with each year that passed we stayed in the same place, even as my salary grew. We could have afforded to move into a bigger place, and a lot of people asked us why we didn’t. We knew what we were saving for.

2. Hang Out With People With Lower Salaries Than You (And Let Them Influence Your Definition of Normal)

Affording a year off doesn’t require you to be rich. A person making $10 Million per year needs to save the same percent as someone making $6/hour – 15%.

I agree that it is in some ways easier to save money if you are earning a higher income – but there are plenty of people out there earnings stupid amounts of money and still saving none of it because they are anchoring their standard of living to those around them that also earn high incomes.

Think about it, a person making $5 Million a year probably has co-workers making the same amount and a boss that makes even more. Where do you think they go out to for lunch? What do you think they talk about? The same topics as everyone else – what they’re doing on the weekend, what cars they just got, what new gadget they hope to get for their birthday, where they want to vacation next year. The stuff those $5 million earners talk about is just really expensive stuff. If our example person lets themselves anchor their standard of living to those peers, they’ll end up saving 0%.

78% of NFL players are bankrupt 2 years after they retire, despite the minimum NFL salary being $500k. Why? When the guy in the locker next to you makes $10-20 million per year, and you hang out together.

So how do you prevent this? Anchor yourself to a lower standard of living. The easiest way to do that is to spend time around more people that earn less money than you. That will help you see what spending 15% less looks like and make it seem normal.

There are some quick ways to do this. For work friends, hang out with people that are either younger than you or from a department/team that pays less. For outside-of-work friends, find people that work in different industries or roles.

I have a few friends that work for churches or non-profits. Those roles are well known for not being high paying jobs. As we hang out I’m conscious of letting their standards of living and expectations of life help me define what is normal rather than letting some of my work friends who earn the same or higher incomes than me do so.

Other Financial Benefits of Taking A Year Off

As 2017 closed I look a look at my budget and realized we had actually only spent 67% of our planned spend. We had saved 100% of a normal year’s spending money but realized that sabbath year’s spending money was actually less.

Lower Spending

Part of this is because a large number of your expenses are caused by work or by your lack of having free-time due to working.

For example, once I wasn’t working, my commuting expense dropped to near-zero. The amount we spent on babysitters also dropped because we had a lot more free time. Your lunch expenses might drop as well if you’re able to eat at home instead of going out to lunch. We also saved money on things we used to justify because we were so busy, like ordering in dinner when we had no time to cook or paying for 1-day shipping because I didn’t have time to go to the store to grab something I needed for tomorrow.

Ability To Move

Not being tied to work also meant we didn’t have to live in the same place. I happened to work in a very expensive place to live and so being close to work was expensive. Once I stopped having to work, living close to work didn’t matter anymore and so we could live someplace less expensive.

A lot of the money we saved is because in our case we ended our lease, put our things in storage and moved to a less expensive town. We actually lived with family in an in-law apartment, but even if you don’t have family that can generously host you like that, you could move to a less expensive town, or part of town, for a bit.

Tax Benefits

There are also some tax savings you get by taking a year off. Because I split my sabbath over two calendar years, I would be earning 1/2 of my normal salary each of those two years. The way the U.S. tax system works you tend to pay a larger percentage in taxes as you earn a higher income. So by earning only 1/2 a salary over two separate years, I actually got taxed at a lower percentage on each of those years and thus got to keep more of my salary than I normally do.

Be careful here though, some taxes actually work the opposite way. Social security tax for example caps at $118,500 currently. That means you stop paying that 6.6% after that amount. So if your salary was above that, and you cut it in half, you lose what is essentially tax-reduced earnings on anything you would have otherwise earned. I ran into a similar issue with itemizing deductions.

For me, the tax pros outweighed the tax cons.

Salary When Returning

One thing to think about is how quickly you will be able to return to work and if taking the time off will have an impact on your future earnings?

The easiest way to return to work quickly is to be on a company sponsored sabbatical. The second easiest way is to have offers from other companies before you go on your sabbath. The hard path is having to start interviewing during the year, it could take 3-6 months depending on how in demand your skillset is.

In our case I was on a company sponsored sabbatical and so returning would be fairly easy.

Thinking about how taking time off will impact your earnings, there are a few scenarios. In some fields, time away might mean you are rusty and so perhaps your return salary will be a bit lower. Even if you are able to return to the same exact salary, you will have one year less experience than you would otherwise have and so you will be giving up a year of growing in your productivity and any raises you would have gotten during that time.

On the flip side, if during the sabbath year you are able to rest, refocus and invest in yourself, that will likely produce much higher returns. An energized employee with a redoubled focus will likely do much better to exceed expectations and earn future raises.

In Conclusion

Taking a sabbath year isn’t something for the rich only. Anyone that plans ahead and puts in the hard work of scaling back spending can do it. The math works out to 15% but due to some of the extra savings during the year I think you could actually get away with a number closer to 10%.

So how much are you willing to sacrifice in order to not have to work for a year? Are you willing to pretend like your salary is 10% lower? If so, you can make it happen.

2018 Focus: First Principles Lifestyle

With the start of a new year, I take the time to set my focus for the coming year. I believe that by being selective about where I direct my energy, I can achieve results that are exponentially greater than if I split that energy across many different goals.

More details about the process are in this blog post and you can review the results from past years (2013, 2014, 2015, 2016 & 2017).

2018-2023 Sabbath Cycle Vision: Preparing To Be Called

This is not only a new year, but it is also the first year of a seven year cycle of sabbath years. As such I’ll also be defining a guiding vision that will serve me for the next six years.

As I reflected on my past exemplars and the period of their lives in which they accomplished the great things they are known for, they had their biggest impact later in life. They certainly had accomplishments and showed signs of high potential early in life, but in retrospect those early years seem more as preparation, time that developed their character, formed key relationships and setup circumstances that allowed them to flourish later in life.

My guiding vision for these six year is to undertake the preparations that will allow me to do the same. To write the most meaningful chapters of my life at some future date. I do not yet know what those chapters contain, but I suspect we will one day be able to see how they emerged from the words I’m writing now. What I do know is that there are ways I can better prepare myself, develop my character, nurture the correct relationships and reinvest my successes to create ideal circumstances.  That is what I will attempt to do over the next six years.

2018 Theme: First Principles Lifestyle

The idea of first principles thinking is to remove preexisting assumptions and to build towards a conclusion from the ground up, challenging and testing every brick as you build.

A first principles lifestyle would be one in which all aspects of that life are chosen intentionally because they are the most effective ways to achieve a person’s goals. A life in which everything has been stripped back to the foundation and rebuilt intentionally. That life might look very unique, or it might not, its roots would be in the goals it is true to rather than how anyone else does or has done things.

This will be my theme for 2018 and I intent to spend time challenging assumptions I have about life, learning about the lives of others who are living first principles lifestyles and work towards defining a life that I can see our family adopting for years to come.

2018 Challenge: Profile 12 Families (w/ Kids) Living Intentionally Different

Relating to that theme, my challenge for this year is to profile 12 families, that have 1+ kid(s), that I consider to be living first principles lifestyles. People that have decided what is important to them and crafted lives that strip away all else to emphasize those things. People that have figured out how to do so while also having children, which makes everything a bit more challenging.

This will be challenging for me because it is the biggest writing project I’ve taken on where I am not writing about first hand experiences. I’ll have to get much better at getting the information I need ahead of time, rather than being able to pull it out of my mind as I’m writing.

Success for this challenge requires doing all of:

  • coming up with a format and series of common questions to learn about my subjects
  • completing 12 profiles
  • publishing them for others to read

Limiters I am putting in place include:

  • maximum of seven hours per week

Tiered results – extra stretch goals to reach for after achieving the binary result:

  • publish the profiles on a website other than GregKroleski.com
  • publish the profiles as an ebook with wide distribution
  • no more than 2 of the families were people I knew prior to Jan 1, 2018
  • publish the profiles as a paper book with a major publisher

2018 Habit: Daily Devotions

As I think about first principle living, one aspect that is foundational to the way I live and needs to be at the heart of future changes is my faith in God, His commands for how His people should live and the path He has uniquely set before our family.

I wrote in my 2017 end of year review about how last year’s exemplar, Eric Liddell, was emphatic on the importance of a daily devotional time. I believe that he was able to draw an unearthly amount of strength from that connection and I know that I may be asked to do the same.

My daily devotional time stands out as one way I can continually invest in; understanding God, seeing His will for our family and drawing strength from that. Despite the importance of this practice, this time is something that has come under fire for me as work, children and commitments have chipped away at the times I used to find ideal to set aside.

My habit for 2018 will be spending time in daily devotion: reading the Bible, praying, reading devotionals and reflecting. The goal will be to complete the habit a certain number of times per week and at the end of the year I will look back on how many weeks were successful. The number of days per week will start at three during the first quarter of the year and grow by one with each quarter, ending at 6 in the last quarter. The hope is that the progressive difficulty will make the goal achievable while slowly chipping away at obstacles that stand in the way of the end goal.

2018 Exemplar: John Muir

As I think about building a lifestyle from first principles, I wanted an exemplar that lived a life driven by their core values, even if it that resulted in it looking very different from their contemporaries. One such man is the naturalist, author and philosopher, John Muir.

Over one hundred years after his death, it seems appreciation for his lifestyle and the things he loved is still growing. He was on to something big long before anyone knew it was something at all. Most famous for being “The Father of Our National Park System” and the founder of the Sierra Club, Muir also balanced aspects of a more traditional life, running a family business, being a husband and father of two girls.

I’m interested in learning more about how he discovered his passions, how effectively he balanced them across his life, and how he was able to create a legacy that has lasted for over a century. It helps my interest that we share a common passion – I’ve spent a good bit of time over the past decade on land that his efforts helped preserve. Perhaps during this year I’ll make a point of visiting a bit more.

2017 Focus: End Of Year Review

At the beginning of 2017 I wrote about my focus for the year. I’ve posted a few updates throughout the year (quarter year, half year & three quarters) and now is the time to do a final review.

2017 Theme: Sabbath Year

Self Grade: 8/10

After learning in the past that having multiple goals dilutes focus and causes competition for a limited amount of time, I decided starting last year to focus my goals (challenge, habit & exemplar) around a single topic.

For 2017, the theme was centered around the idea of a sabbath year – a year of rest.

I found that centering around that topic worked really well. My efforts towards each of the three goals contributed in part towards each other and they feel very much as three notes of the same chord rather than three diverging items.

I think there is still room to improve how much of my free energy – that which excludes family care, self care & earning an income – goes towards my yearly focus. I definitely invested in a few other topic this year and think I can do better at focusing more.

2017 Challenge: Define & Launch A Sabbath Year

Self Grade: 10/10

We launched the year on July 13th which means we just about completed the first half of it by the end of the calendar year.

Completion for this task required:

  • creating a written philosophy about our family’s sabbath year practice – DONE (see here)
  • composing a plan for the current iteration – DONE (see here)
  • starting this iteration before Dec 31st – DONE (Started on July 13)

And I also had defined tiered stretch goals

  • spend <75% of 2016’s family budget during the sabbath year – SUCCESS (currently at 67% of the 2016’s monthly average)
  • the partial sabbath year that I can review by Dec 31st is, in my opinion, two standard deviations away from the standards set by the last six years – SUCCESS (Any way you slice it, this year is an outlier.)

Reflecting on the year, the heavy lifting for this challenge during the first six months of this year was centered around defining expectations and preparation logistics. While it had seemed like the sabbath itself would be easy, in fact it has presented itself with its own difficulties.

What I have learned is how important familiarity is when it comes to the difficulty of something. For a competitive marathon runner, running something like a double-marathon is not the most challenging thing – running casually with no races in mind for a whole year might be. The former follows a known type of difficulty, while the latter is completely foreign.

This year has forced me to rethink a lot about my identity, priorities and the purpose of challenging myself. Though that is not what I thought I was signing up for, I suppose it is not far from what I was after.

I am still only half way through the sabbath year, which didn’t align with the calendar year, so there will be more to come from this in 2018.

More detailed posts I wrote throughout this quarter here:

2017 Habit: Time Outside With Family

Self Grade: 8/10

My habit for the year was to spend time outdoors with family, I was aiming for at least 7 hours per week. Over the course of the year 42 of the 52 weeks were successful. Of note, six of the ten missed weeks were in the first ten weeks of the year – meaning I got much better as the year went on. I actually averaged 10.25 hours outside per week which is about 50% more than 7 hours. The peak week was 24.5 hours.

This habit also fit nicely with the theme of resting. Getting outdoors was a good way to get away from distractions and inputs as well as to make room for processing the thoughts spinning around in my head.

Along with the success of the focus, or perhaps contributing to the success, this has been the best designed goal I have ever attempted. Most years, goals that are habit-like tend to be the ones I do the worst at. No matter what, I am usually cramming in December in order to have the least-bad result when the year closes.

This year however, things feel much more organic. As a result of pushing through difficulties on a continual basis this year, I have gotten past hurdles so that certain activities are now much easier. Because of that, I think this habit will carry forward to future years with more success. Which is, of course, the real reason I do this.

Here are the collages I made each quarter showing off a few of my favorite outdoor activities.

2017 Exemplar: Eric Liddell

Self Grade: 7/10

In my second year having an exemplar, I made progress towards setting a standard for what I want this to look like, but still feel I have a long way to go.

Over the course of this year I watched Chariots of Fire, a movie about Liddell, read For the Glory, a biography of him, read The Disciplines of the Christian Life, a devotional book he wrote, visited the site where he earned his Olympic Gold Medal in Paris and attempted to emulate his approach to races.

Interestingly, aside from mentioning the fact that he didn’t run an Olympic heat on the sabbath, there wasn’t much information in the material I covered about his philosophy or approach to the sabbath. I was able to learn a good bit about other aspects of him: his disciplined prayer life, his commitment to doing what he believed God was calling him to and his ceaseless desire to serve others.

The first of those is the most relevant to this year. It is what I consider a daily sabbath – time set apart from each day to spend in prayer, reading the bible and doing devotionals. One story of his commitment to this comes from when he was in an internment camp. Despite being underfed and overworked, he would rise each morning to pray, read by the light of home made candles and quietly sign hymns with other prisoners. The direness of those circumstances and his resolve throughout them reveals a lot about his character. This was not something he did on top of the many burdens he bore for others while at the camp, it is something he did so that he could continue to bear those burdens.

His dedication to daily sabbath has served as a bit of a call out for me – what in my life is so difficult right now that I am not able to find that time as regularly as he was? – and also an encouragement – why should I think so highly of myself that I would be able to burden my load alone?