How To Take A Mini-Retirement & Have The BEST Time

If you want to go to the next level in life, a mini-retirement can help with that. Learn how to take a mini-retirement to plan successfully and make your plan a reality. 

Many people are stressed and tired in their day jobs, feeling like they need a break. Mini-retirements can provide that break to you, giving you time to think about what you truly want out of life and do what makes you happy. Rather than stop working altogether, people take this mini-retirement to re-energize themselves before jumping back into the workforce.

Mini-retirements can be entire years or just a month or two. It depends on your personal preference if you want to keep your job and more. And more importantly, do you have the right amount of money to afford to go on a mini-retirement?

Personally, I’ve had a mini-retirement when I just graduated from the university. I traveled to South America for four months and chose to stay at home a few months before I started my working career. Recently I’ve taken a mini-retirement with my partner, where we’ve traveled through Central America for four months. 

It may seem hard or even impossible to have a mini-retirement yourself. I am here to tell you that it is not impossible. You CAN have a mini-retirement. With the right kind of financial planning, this dream can become a reality.

If you plan accordingly, prepare for what you’re going to do, and act on that – you’ll notice how straightforward it is. After that, you can take a mini-retirement every few years or so!

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What Is A Mini-Retirement?

A sabbatical, gap year, or mini-retirement. All names for the same thing.

A mini-retirement is an intentional period that you take to be away from work for a certain time. It requires you to plan beforehand what you want to do and how you’ll finance it. 

When you’re taking a mini-retirement, just the act of taking a step back from work and doing what you want to do can bring a lot of insights. 

If you’re the right person in the right situation, a min-retirement can be eye-opening and bring a lot into your life. 

Why Should I Take A Mini-Retirement?

When I’ve taken my mini-retirements, many people are concerned about my career. What if your employer doesn’t want you back? What if people ask what you’ve done in those few gap months on your resume?

First of all, many people are taking a mini-retirement, gap year, or sabbatical from work. Many companies even have a policy for that, where you can take leave as soon as you have worked for the company for over X amount of years. 

Besides that, because it’s so widely accepted in society, I doubt anyone would make a big deal out of it. The most common thing I hear is: “I wish I could do that,” or “You’re lucky your employer let you.” 

Take Time Away From Work

For the average American, only 28% plan to take all their vacation days. Even people who have paid benefits don’t take the maximum time away from work. 

Breaks from work can be extremely good for you. It will boost your productivity, it is very beneficial for your health, and your mind will thank you for it. Besides that, time away from work will help you prevent burning out, letting you better cope with stress. 

So work is a major stress factor in people’s lives, making it important to take time off to refresh. 

Relaxed Woman MSN
Image Credit: stokkete/Depositphotos.

Besides that, the trend is more and more companies are offering extended time off of work. This can be in the form of a sabbatical or a mini-retirement. People who take time away from work for a more extended time come back more productive and happier. 

How I Accidentally Had 8 Months Of Mini-Retirement

The thing that I now am dreaming of was already my reality a little while ago. As with many things, we only appreciate them looking back. You’re probably wondering what I’m talking about. I’m talking about my mini-retirement, of course!

Until now, I saw my mini-retirement as a long holiday, just me wanting to travel and search for a job, but I’ve actually already tested what retirement looks like.

In September 2017, I graduated and took off for South America. I traveled 4 months through Colombia, Ecuador, and Peru, which was truly amazing. It was my big dream to travel for a couple of months. Since I started studying, I have had this burning desire, so I am extremely happy and grateful to experience that.

Besides that, I also gained a lot of confidence from that trip – making me realize what the 8 months of mini-retirement have given me.

My Why For Mini-Retirement

Ever since I’ve studied a semester in the US, I’ve wanted to travel again. I love the feeling of freedom when I travel!

I was thinking of cheap countries – so either South America or Asia. Then I saw Narcos, the Netflix series about Pablo Escobar, which made me want to visit Colombia.

Yes, Narcos made me want to visit Colombia. Not run away from Colombia. It didn’t make me scared. It actually made me visit this country.

I saw the landscapes filmed in Narcos, and it was so beautiful that it made me want to go there and see it up close. So what I took from Narcos was the landscapes, yeah, really!

On top of that, some of my friends were going to South East Asia. I’m always one to go against the herd, so why would that be any different this time? I wanted to go and do this adventure alone. I had a feeling that traveling would be different when you go alone compared to you constantly being around someone you’re comfortable with. And I was right!

How To Take A Mini-Retirement?

Many people think that you have to give up a shitload of money and your future career if you want to go on a mini-retirement. That’s simply untrue. 

I have spent a total of €8.200 in 2019, which includes 4 months of traveling. Besides that, I can pick up where I left off with my career.

So if you want to know how to take a mini-retirement, here are some steps to get you started and my personal experience on how I did it.

1. Know Why You Want A Mini-Retirement

Before you dive head-first into your mini-retirement, know why you want to do it.

Do you want to travel? 

Do you want to pick up a hobby you never had the time for? 

Would you want to build your side-hustles into a full-time income? 

Would you want to have more time to spend with the people that are important to you?

Young couple arriving the hotel
Image credit: ikostudio/Depositphotos.

It is good to think beforehand about what you want to do with your mini-retirement, just like you think about your reason for early retirement.

What did I do? For starters, I did plan my mini-retirement a long time ago. I’ve been working around 20 hours per week since I started studying, adding up to about $700 per month. On top of that, I would take out a study loan that the government offers against a really low–interest rate! (It’s currently 0% – that’s why I’m not paying my student loans back yet).

This means that I had around $1600 coming into my account monthly, of which I used about half. The other half I would save for my study abroad adventure.

I wanted to have at least $10,000 in my savings account before I went to the US so that I didn’t have to skip due to too little money. The idea of being abroad and having to think about if I should spend my money or not doesn’t really appeal to me – if I want it, I’ll buy it. I am a naturally frugal person, so this works for me! Frugality is really my calling card in life.

After I studied in the US, I started to save again immediately because I wanted to travel again. It’s kinda addicting, in a good way! I did an internship for $450 per month. Also, I worked around 20 hours per week – still. I saved about $800 per month for a good 7 months because I didn’t have any time to spend my money.

So, what did it do for me? I got into the habit of saving. Not eating out more than 2x per month, living in a student apartment, cooking my own meals, and more. If you are wondering how to save more money, check this article listing 25+ easy ways to save money!

2. Are You Able To Fund It?

It’s a lot of fun to think about what you want to do in your mini-retirement and why you want it. But to really take the mini-retirement, you need to break down the costs. You need to be able to fund it. 

Many people believe that you need to be financially independent or out of debt to take a mini-retirement. That’s not true. 

You need to make sure that you make your mini-retirement a priority. When you know what you’re saving for, motivation is often way greater. 

Know how much money you need to save:

  • Know how long you’re taking the mini-retirement for
  • Estimate total costs – this can be traveling, working on your business, or any options for mini-retirement.
  • Add up 15% – just as a buffer to make sure you’re having enough and don’t need to stress about money

Once you know how much money you need, you need to start saving for it. Manage your paycheck and monthly expenses. Know how to invest your money wisely also.

One great way to fund your mini-retirement is by creating a budget. It is not for everyone, but it’s an easy way to know how much you can save towards your mini-retirement monthly. 

Another great option is to pay yourself first, where you’re funding your mini-retirement account first thing every month. That way, you’re sure that you have enough money to fund your entire time off work. 

In order to track your progress towards your mini-retirement savings goals, make sure to develop a monthly money routine where you track your finances.

Woman and Her Piggybank
Image Credit: ridofranz/Depositphotos.

What did I do? If you want to take a mini-retirement, where you take a few months up to a year, or even more, off from work, is it attainable? Effectively it won’t cost you that much since you can take up a combination of your own time and your vacation days.

Let’s say that I want to have 3 months of off work. I’ll take 5 weeks of holiday, which leaves 1 month and 3 weeks. That’s 1 month and 3 weeks you need to go by.

What I did was travel during that time – especially countries that are much cheaper and are very good to go to. When I went to South America, I spent an average of $1000 per month – including going to the Galapagos Islands. On the Galapagos, I spent $1000 for 2 weeks, which ups my budget a lot.

Total of $4000 for 4 months of traveling, that’s not too bad, right? I mean, you could totally pull it off!

3. Build Passive Income

Passive income can be a great source when you’re planning for a mini-retirement. You can build up your nest egg and increase your net worth overall.

It speeds up the process of saving for your mini-retirement and funding your experience. With the right amount of allocation of your income versus your living expenses, your budgeting will help you fully realize your plans. 

Besides that, you’re getting income when you’re on your mini-retirement, helping you when there are some unexpected situations or expenses. It never hurts to have some extra. 

It takes time to build passive income, but believe me when I say it’s well worth it. There are many ways to build passive income, my favorites being:

  • Peer-to-peer lending – where you lend money to people or businesses through a platform against 10-15% interest. Be aware that this can be risky, and invest only what you can lose. Sign up for Mintos for your P2P investment. Check out our full Mintos review for more details.
  • Real Estate Crowdlending – where you invest in a small portion of a real estate project, giving you monthly passive income just like rent. The building itself is collateral, meaning that the risk is lower compared to peer-to-peer lending. Try EstateGuru and earn passive income. Here is our full EstateGuru review to learn more about the services they offer. 
  • Low-Cost Index Funds – where you buy shares and get monthly or quarterly dividends from them.
  • M1 Finance – a stock and ETF brokerage that lets you invest for as low as $100. Here is our full M1 Finance review, and learn more about the platform.
  • DEGIRO – the same as M1 Finance but based in Europe. Check out our full article on DEGIRO review and start investing.

4. Leave Your Job If Necessary

Depending on your job, you may need to leave or negotiate for a mini-retirement.

I negotiated a mini-retirement with my boss, taking unpaid leave and using up my holidays. It depends on your specific situation. 

However, I was prepared to quit my job if my manager would disagree with my proposal. Part of why you’re taking the mini-retirement is to take some time away from the job. Do things that you don’t have time for when you’re working. 

What did I do? If you want to take a mini-retirement, it means that you’re ready to step outside the social norms. If you’re going to live an extraordinary life, you need the courage to do extraordinary things.

Smiling Businessman MSN
Image Credit: vk_studio/Depositphotos.

Spend money on things that align with your values. Spend time on the things that will enable you to get closer to your dreams!

If you’re working hard throughout the year, don’t you want more than just 3 weeks of summer holiday? I know I do!

Think about what you want. Do you want to meditate with the monks in Asia? Or do you want to volunteer in Africa? Do you want to backpack across South America? Go for it!

Life is too short to wait until you have money or wait until you have the time. If you set attainable goals, figure out how much it will cost you, you will save for it. You will be able to go for whatever it is you want!

5. ENJOY! 

Once you’ve planned for it, go for it! 

You have figured out what you want to do and how you’re going to afford it, and you’ve built passive income along the road. That’s amazing! 

Go for your dream, and don’t let anyone tell you otherwise. Do what it is you want to get out of the mini-retirement and reflect on it. 

Most of all: enjoy! You’ve worked hard towards this, and you deserve to enjoy every single minute of it! 

What did I do? It’s just so important to pursue your dreams – even the small things are what will count in the end.

I’ve made my dream trip. I’m not special. I consider myself very average.

I’m just prepared to live life outside of the norm, whatever that may mean.

I just do whatever the hell I want, just because I want it. It doesn’t matter what others think about you. In the end, it’s your life that you’re living.

Myths Out There Around Mini-Retirement

Myths about mini-retirement may stop you from planning or even experiencing a mini-retirement in your life. Let’s debunk some myths people have about mini-retirement.

You Have To Earn A Lot Of Money

Many people think that you need to earn a lot of money to have a mini-retirement. Very much not so, like I outlined above; I was a student before I had my mini-retirement. I had around $13k yearly income while having all the student expenses, which means; if I can do it, you can do it too!

The important thing is to become equipped to live within your means. If you’re having a hard time doing that, read my article on how to save money here for some actionable steps regarding saving enough money. You don’t have to be advantaged to fulfill your dreams. You just have to have a financial plan to get that extra money to pursue your goals.

If you have a full-time income, I’m sure you can live on half your income. Why? Because I save over 50% of my income, and so can you!

You Can’t If You’re Employed

One of the most common things that I hear about mini-retirement is that they are employed, and therefore, they cannot take a mini-retirement. But as with anything, there are many options!

You can negotiate with your employer, which is exactly what I am doing – since I’m planning to go on another mini-retirement this September. This one will probably be around 4 months. Many employers also have some kind of sabbatical program that you can use, which will be a great option!

Young Office Worker Typing At Computer Meeting With Managers MSN
Image Credit: photography33/DepositPhotos.

I’ve outlined this many times already, but I will just continue to repeat myself; all you have to do is ask! It may not be a defined benefit in your contract, but it is a possibility to better your overall well-being.

If you can’t negotiate it with your employer, you can plan accordingly if you’re switching jobs, or you can save up all your holidays and make them into one long holiday!

I’ve negotiated my mini-retirement with my employer, and so you can do the same!

You Will Postpone Your Financial Independence

If financial independence is most important to you, you don’t have to take your mini-retirement. Just know that you can!

You can opt for traveling to cheaper countries, where you’ll spend around the same as you spend per month living in the US or Europe.

I also want to stress that it’s really important to enjoy the moment. Go follow your dreams! Currently, I’m having all my finances in order. All I have to do is wait. I can tell you that I’m getting very impatient toward early retirement. Can I retire early already?! It’s good to do many fun things in the time between now and your retirement, whenever that may be!

The point is to make choices to make your present self happy as well, not just your future self!

All In All – How To Take A Mini-Retirement

If you’re not sure where you want to go in life, I highly commend a mini-retirement. It has brought me so much – clarity, motivation, relaxation, learning experiences, having the best memories, and meeting people who felt like a lost family.

When you’re taking a step back from day-to-day life and you’re taking the helicopter view – things can work out pretty well for you. If you’re not sure where you want to go, don’t worry, you’ll get there!

Taking a mini-retirement is a great experience that will enrich your life. Plan for it, save for it, and you will have the best time! Having great personal finance and a great savings rate is always important in your life but without the right mindset and inspiration? All your great plans may go to waste.

Once you’ve gone through all the steps outlined above, you will take your first mini-retirement in no time!

Do you want to have a mini-retirement? What do you think?

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