Sabbath Year – After Seven Months – The Trouble With Choices

I am currently in the third phase of the sabbath year plan I designed for this year. During this phase the goal is ‘looking around’, which I described as:

“The focus of this period is taking a broad look at what is possible. There will be a lot of data collection but not much action. The goal is really to make sure we have as comprehensive as possible a picture of what our options are for the next six years and as detailed as possible a view of what those actually look like. To answer the question ‘what is the life we want to create for ourselves?'”

I’ve started to set aside time for me to go do this research, and so far have felt a bit overwhelmed. That is what I am going to write about today.

The trouble is there are just so many options.

Three Main Decisions

We are primarily deciding on three things as a family right now: where we want to live, how we will earn an income and what sort of lifestyle we want.

Those three decisions are very interconnected, as you can imagine. Some places are better for certain jobs. Some jobs make certain lifestyles easier, harder or impossible to live. Some places are conducive to certain lifestyles.

Our current scope for each of those three items is fairly broad. Geography is less important to us than what a place has to offer, my professional skills leave me open to a wide range of jobs/industries and we’re generally very open to living outside of the norm if we see the benefits of it – meaning our lifestyle selection is quite broad as well. All three of those having multiple options means the total number of permutations is really high. If there are 5 cities we’re considering, 3 types of jobs 3-5 different types of companies and another 3-5 lifestyles to consider, there are up to 375 unique combinations.

In the face of an overwhelming amount of choice, it feels easier to default to the known. There is comfort in reducing risk by going with something already quantified – whether that is actually comfortable or not. The downside of this, however, is that it gives up the chance at obtaining ‘the best’ and settles for ‘pretty good’. It also atrophies your ability to make changes, which makes you susceptible to your ‘pretty good’ becoming ‘not so good’ and you not having the ability to do anything about it.

How To Explore

I’m trying to be methodical in my exploration – starting by building a broad list – using known ideas to explore near neighbors and information from one decision item to explore the next. I’ve enjoyed working at a software company, what other types of companies offer similar circumstances? If San Diego is a place we want to live, what sorts of jobs are there?

I’m also trying to be lean in my evaluation – learning in the lightest weight way possible – reading an article about the farming lifestyle is less expensive and disruptive than actually trying it. Talking to someone for an hour is often more insightful than reading a book. Shadowing someone for a day is the lowest commitment way you can get a true sense of how you will enjoy every aspect of it.

Deciding Together

This task is made even more difficult though because, for me, these decisions are not made individually. As we look at where we want to live, how we will earn an income and what sort of lifestyle we want – we continually realize that our family consists of more than one opinion. In some areas, the two voting parties mostly agree – neither my wife nor I want me to be at an office 80 hours a week, nor do we think that is what is best for non-voting stakeholders (also known as our four children). But in other areas we disagree – I prefer yearlong consistent nice weather, my wife likes seasons. Most areas are somewhere in between those extremes – slight differences in preferences and slight differences in weights for every facet we analyze. How we balance these differences and make tradeoffs adds an additional difficulty level to it nonetheless.

Looking Within

As I start evaluating options, the hardest part is not actually the overwhelmingness of the scope or the fact that I sometimes have different preferences than my wife. The hardest part is understanding me.

As I compare options and weigh the pros, I am forced to face myself in a very real way. The decisions force me to know myself and wrestle with my inconsistencies in a way that is very uncomfortable.

If I have two job options, one that pays more and one that I am more passionate about – the decision I make reflects which of those two things I value more, my money or my passion. As I weight two similar places, one with warmer weather and another that is less expensive, I am forced to put a price to the amount I value sunshine. Then things get really real. I eventually have to make decisions about people I care about. I have to decide if a particular interesting project is worth more to me than being with my family for 10 extra hours per week, or if warmer weather is worth more to me than my wife getting to live near her sister. I am forced to reconcile my true feelings and priorities, and acknowledge when those are inconsistent with the way I see myself, the way I present myself to others or the way others see me.

Not having many choices might help me avoid this task.

So, in a strange way, the task of this phase of my sabbath year is more perfectly aligned with my sabbath year’s purpose than I ever intended. The act of intentionally choosing is forcing me to take a magnifying glass to my own heart, to prod at and dissect it, to find rotten and cancerous spots that are crowding out the healthy cells that are supposed to be there and to decide what to do with them.

Yet again I have found that the relaxing, hammock-sitting, book-reading sabbath year of my imagination has proven to not exist. Instead the year of rest has turned into a year of deep introspection, self learning and growth-area identification.

On A Positive Note

To end on an upbeat note, I will share one encouragement.

Over the past week I’ve been wrestling with a particularly difficult decision that arrived unexpectedly. It forced me to weigh a few priorities that have held the forefront of my attention at various points in my life and make a decision about which of those would remain in front going forward. Through this time, as I grasped for information to help me understand the tradeoffs, I turned to friends for advice. I’ve spoken to about a dozen people, each with their own expertise and throughout it realized how many great people I have in my life and how many of them I’ve met in the past six years – the period of my most recent sabbath year cycle.

I feel thankful for that and encouraged as I look towards the next six years, not knowing who I will meet or where I will meet them, but optimistic that I will be able to continue to surround myself with the type of people who I respect and trust.

Secret 2018 Goal: Ratio of Creation to Consumption

Every year I set a focus for what I want to accomplish during the year. I don’t much believe in setting other goals beyond that, as having too many increases the chances of any one of them failing.

I’ve noticed lately that I’ve also started to have a ‘secret goal’ of sorts. Something a few notches down on the priority list from my named focus, but that I think about in the back of my head. Sometimes it is something I want to monitor in case I decide to make it a true focus item in a future year. Sometimes it is a past focus item I’m still keeping an eye on.

This year I’m writing it down my secret goal so that I don’t forget it and to see if writing about it is a bad idea altogether.

The secret goal for 2018 is to create more than I consume, as measured by:

Books read + listened to + significant blog posts written >= movies watched + video games played + graphic novels read + TV show seasons watched

Essentially I believe the former are productive and the latter are more consumptive. I know they all vary in length to some degree, but for now I’m counting them as all as the same.

You might also recall that reading books and writing blog posts were both habit goals that I set for myself in previous years. Watching fewer movies and TV shows has nearly been my yearly habit goal a few times as well.

Sidebar: You might ask how I can consider reading books, to be consumptive. I believe, especially with regards to the books I select, reading is productive because it is a form of efficiently outsourcing your thinking to someone else. What might have taken me 100 or 500 hours of thinking to come up with can be consumed in 5 to 10 hours instead. Another way to phrase it would be that when I decide I need to become more knowledgeable about a certain topic, reading a book is often the highest leveraged solution. Watching movies and playing video games is most often the result of me wanting to enjoy the experience, even if I happen to learn something as I do so.

Last year my numbers were:

  • Books read: 7
  • Books listened to: 1
  • Significant blog posts written: 7

Total Productive: 15

  • Movies watched: 42
  • Video Games Played: .25
  • Graphic Novels Read: 2
  • TV Show Seasons Watched: 3

Consumptive Total: 47.25

So I was at roughly a 1:3.15 ratio last year (much better than some years of my life where the total was probably closer to 1:20 or 1:50) and this year I want to drop it to 1:1 or even 1.15:1.

For those curious about how I track all of this, I use Goodreads for books, audiobooks & graphic novels, for movies and my blog’s backend makes it easy to see posts published. I don’t have a system for video games or TV shows so will just use an Evernote doc.

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.