Can you afford to take a career break? | Money Talks Podcast

Summary

In the 'Money Talks' podcast, host Andrea H explores the financial implications of taking a career break through the experiences of guest Andy, who took a two-year hiatus to pursue his MBA. The episode delves into Andy's financial planning, cost-cutting strategies, and the importance of communication with his family during this period. Andy shares insights on managing expenses, the value of spending time with family, and the benefits of a career break, concluding that such a break can be worthwhile but should be carefully planned to minimize financial stress.

Takeaways

• 📚 The importance of planning financially before taking a career break, as highlighted by the host's experience of needing to do freelance work during her 3-month break.
• 💼 Andy's decision to take a 2-year career break was influenced by the inability to take unpaid leave for his MBA, leading to a careful financial planning process with his wife.
• 🏠 Major monthly expenses like childcare and car payments were identified as significant financial burdens during Andy's break, emphasizing the need to address these when planning for a break.
• 🚗 The car remained a necessity due to children's school transportation, but Andy supplemented car expenses by driving for Grab to cover running costs.
• 🍽️ Eating out was one of the first expenses to be cut, illustrating the need to reassess discretionary spending during a financial break.
• 🩰 Adjusting family expenses also included changing the children's extracurricular activities to more affordable options, like moving from private to People's Association schools for ballet lessons.
• 💰 A conversation with the insurance company allowed Andy to suspend premium payments for a year, showcasing the value of reviewing financial commitments during a break.
• 👨‍👩‍👧‍👦 Andy's experience of being a 'house husband' during the break led to a shift in family dynamics, with his wife taking the financial lead and him contributing through childcare and household duties.
• 🧳 Despite cutting back on travel, the family managed a short holiday by utilizing points from a vacation club, demonstrating creative budgeting even during financial constraints.
• 💹 Liquidating some investments became necessary to cover expenses during the break, indicating the potential need to tap into savings or assets when planning a career break.
• 🔄 Post-break, Andy returned to work with a different perspective on life and work goals, suggesting that a break can provide valuable personal insights and changes in outlook.

Q & A

What is the podcast 'Money Talks' about?

The podcast 'Money Talks' is a platform for various conversations related to personal finance, including topics like the costs of getting a divorce and financial considerations when taking a career break.

What advice did family lawyer Ivan Chong give regarding divorce costs?

Ivan Chong advised to iron out all the financial details early on before seeing lawyers, which is one of the biggest ways to save money, time, and heartache during a divorce.

Why did the host, Andrea H, take a career break?

Andrea H took a career break for three months at the age of 38. Although it wasn't the most financially sound move, she enjoyed the freedom that came with having no scheduled obligations.

What was the main reason Andy took a two-year career break?

Andy took a two-year career break to pursue his MBA. His company did not allow for a no-pay leave, so he had to resign to focus on his studies.

How did Andy plan for the financial implications of his career break?

Andy planned for the financial implications by calculating his funds, talking to his wife, and deciding on areas where they could cut expenses, such as holidays and eating out.

What was the approximate monthly expense for Andy's family during the time of his career break?

Andy's family's monthly expenses were close to 5 to 6 thousand dollars, including childcare for his two young kids, which was a significant portion of the cost.

How did Andy manage his car expenses during the career break?

Andy managed his car expenses by driving for Grab, which helped to cover the daily usage costs like petrol and road tax, although it didn't fully cover the car installment.

What changes did Andy and his wife make regarding their children's activities and education during the career break?

They moved their daughter from a private ballet school to a more affordable People's Association school and established new routines for eating out to reduce costs.

How did Andy explain the career break to his young children?

Andy explained the career break to his children by establishing new routines, such as eating out less frequently, without explicitly telling them about his unemployment.

What was the impact of the career break on Andy's role within his family?

During the career break, Andy became the 'house husband,' taking a back seat in terms of financial contributions while his wife took the lead, which was an adjustment for both of them.

How did Andy's experience during his career break influence his perspective on work and life after returning to the workforce?

After returning to work, Andy entered with a different perspective, focusing more on the real goals for his career and being more watchful of his expenses.

What advice does Andy give to those considering a career break?

Andy advises to have at least a year's worth of expenses saved up and to cut unnecessary purchases by at least 20%. He also suggests considering a shorter break of half a year to one year.