More and more people are willing to get extended time off these days. The burnout related to the global pandemic with stress and anxiety is still dominating in many spheres and industries. While employees are trying their best to adapt to the new reality and cope with unpredicted obstacles, they hope to take more time off to enjoy their life, spend more time with family, or work on other projects to rejuvenate themselves.
While it can be a great idea to have a sabbatical, you need to ensure you can afford to take this time off work for several months or even a year. Here is how to get your finances in order before you take a work leave.
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Reasons Why Employees Seek Extended Time Off
Employees decide to take some time off work as they are tired of the lockdown restrictions, labour shortages, and constant stress. It’s difficult to cope with all the current circumstances of life and keep on working. In order to find a work-life balance, more and more Canadians decide to stretch their work leave from a few months to several years. The average time off is about six months.
Some people just want to have a short break from work and stress, while others use this opportunity to rethink what they are eager to do in life and perhaps switch jobs.
This work leave is often called sabbatical and it’s meant to keep consumers happier and healthier. However, you should also prepare your personal finances for this work leave as it means you won’t have steady employment and regular income for a while.
Many people tend to obtain quick cash Canada as they can’t cover all the monthly expenses and often run out of funds before the next payday. Hence, if you don’t have enough money in your savings account, taking extended time off work might bring unwanted financial consequences or even lead you to debt.
The desire to stay with young kids, spend more time with the family, or just reboot are common reasons for people to seek sabbatical and work leave. Millennials are more likely to take some time to recoup as their children start their own lives or study at universities. Recruiters see this change as positive as the employee turnover costs them a lot. They are more eager to let employees have some extended time off from a financial and operational perspective.
How to Get Your Finances in Order Before You Have Work Leave
It can seem challenging and daunting to get your personal finances in order. If you create a plan on how to organize your funds, you will be more motivated and take control of your financial stability. You should aim to keep track of your investments, cash flow, and savings. If you manage your money well you will be able to enjoy your extended time off work while having no issues with finances.
1. Deal with Debt and Credit
Not many Canadians know if they have credit card debt and what their current credit rating is. You may order your annual credit report to check what information is there and whether there are any errors.
It will give you an overview of your present credit score. If this three-digit figure is too low, you may want to take some time to repair it. Again, it’s important to deal with debt.
Are you sure you remember about all your debts? If not, it may be wise to make a list of all the crediting institutions and people you owe money to. Make a habit to check your credit occasionally to help you prevent fraud and make the necessary changes in case you see the rating drops. The credit score can help you qualify for mortgages, personal loans, and credit cards.
2. Round Up Financial Documents On Paper
It’s important to keep your financial papers in order. They can easily be misplaced. If you create a binder or a financial file, you can avoid this hassle. It’s convenient to have all the important information in one place and it will be useful to your beneficiaries. Make certain you gather all the records and documents that may affect your personal finances. Such papers should include payments you make each month or each year.
3. Think of a Recurring Date to Check Your Finances
While you plan to take extended time off, you should also plan a recurring date to check your personal finances. Do you still have enough savings to remain financially afloat? Can you afford to keep on living without steady employment? If yes, for how many more months?
Conducting regular financial checks will help consumers stay organized. Whether it’s at the end of each month or once every several months, you should ensure a full check is performed to understand your current situation. You may want to set a reminder on your mobile phone or mark it in your personal planner.
During this regular financial check-in, you need to go through each of these categories:
- How well do you stick to your monthly budget
- If you have progressed towards your monetary aims
- What is happening with your investments
- Automatic payments that have been processed
- Gather Digital Financial Papers
The world is already digitalized. Technology advances each day, so you may need to pay more attention to digital documents rather than paper ones. Make sure all your digital documents are in one location where you can easily find them.
Consider having a hard drive for this purpose instead of storing all papers on the computer. It may be tempting to have some documents on paper and some of them online but it isn’t the perfect option. It will be harder to manage all of them. Instead, you may scan the paper ones to remove paper storage.
In conclusion, try your best to get your personal finances in order before you take extended time off work. You may want to have some time for yourself and your family, enjoy your life, or feel relief from constant stress and pressure. Follow these tips to manage your funds and take control of your money so that nothing prevents you from rejuvenating yourself.
