If you've ever dreamed about quitting your job and taking a "gap year" from your career to travel, you aren't alone. In 2021—the year that ushered in the Great Resignation—more than 47 million U.S. workers resigned.1 According to a Pew Research Center survey, 45% did so due to a lack of flexibility, 35% wanted to relocate to a different area and 39% felt they were working too many hours.2
For some, this new era was an opportunity to go on a long-overdue adventure. And, according to an American Hotel & Lodging Association survey, the wanderlust continues: In 2023, 61% of Americans plan to travel more.3
If you're considering your own great departure, how can you assess how much your dream will cost you—and avoid financial pitfalls along the way? Read on for some practical tips.
1. Explore Your Options Before You Quit
Before you hand in your notice, think about why you're stepping away. Is the issue the job itself, or is it your relationship with work? Do you want to explore a new career path? Is the schedule unsustainable? Is corporate eliminating remote work and calling everyone back to the office full time? Or have you simply had enough of spotty Zoom reception?
If you're planning on leaving your job, ask yourself whether there's another solution that gives you what you want while keeping some financial security intact. Could you instead work out an extended vacation by stringing together paid time off with unpaid time off? What about transitioning to a part-time role within the same company, or switching to an independent contractor role that would offer you more freedom in how and when you work?
Write down your ideal work-life situation in clear terms. Reference this document often as you make career moves.
2. Plan Your Path
If quitting is still the best call, it's time to crunch numbers. Do not skip this step.
Start by reviewing all essential expenses, and make a budget. For a tracking method, use whatever system works, whether it's a low-tech pen-and-paper method or a budgeting app. Schedule regular financial check-ins with yourself to reevaluate goals as needed.
Draw out a timeline for your career break. Give yourself a deadline for getting back into paid work, and build in more time than you think you'll need to job hunt. That way, you won't find yourself in desperate need, forced to take the next offer even if it isn't the right fit.
Finally, even if your travel plans are more of a distant fantasy, contribute regularly to an emergency fund or a travel bucket to keep you feeling more secure and inspired.
3. Maximize Your Savings
Keeping your life from being defined by the pursuit of money often requires... making more money. Specifically, making money in a way that is automatic and accumulative.
One way to do this is through investing. But if you're not already investing, right before or after leaving a job probably isn't the time to start. Any money you might need to access within the next six months to a year should be kept liquid.
Consider front-loading your savings before leaving your job and sticking it into a savings vehicle that aligns with your financial goals and risk tolerance. This might be a high yield savings account that allows your savings to appreciate over time by earning interest at an above-average rate, without the risks that come with other kinds of investments.
If you've been contributing to a 401(k), you have options. Depending on your balance, you may be able to keep the account with your former employer. You might also consider a tax-free rollover into an individual retirement account (IRA) with a qualified custodian.
4. Know When to Embrace Minimalism
Now it's time to get creative. To compensate for income loss, you'll want to alleviate as many of your financial responsibilities as possible. Small ways to pare down include canceling subscriptions and memberships, preparing meals at home, finding out how you can lower monthly utility bills and selling personal items like clothing and furniture.
Bigger ways to pare down expenses could include selling your car or putting most of your possessions into storage and not continuing to rent an apartment. Of course, these would only make sense if you can commit to long-term travel and staying in places with robust public transportation. If you don't want to give up your place, subletting or home swapping might be a better route.
In addition, don't skimp on necessities like travel medical insurance if you're going abroad, or short-term health insurance when you're between jobs. Despite the alluring price tag, staying with a catastrophic health plan that only covers you for emergencies isn't feasible if you want to keep up with routine preventive healthcare.
5. Do Your Destination Research
When it comes to travel costs, where you're going matters. Do your homework on where and how you can make your dollar stretch the furthest while still having the kinds of experiences you want.
Are you OK with occasional couch surfing and prolonged hostel stays, or do you prefer a private hotel room? Does train travel excite you or induce dread? Do you plan to eat mostly in restaurants, or do you find it charming to discover a new place by exploring its supermarkets?
There's more to consider than simply the strength of the dollar relative to the exchange rate for the local currency. Even if you're going to a country that's known for being an expensive travel location—like England—you may be able to make it work by limiting time spent in hot spots like London and opting for a less touristy area.
6. Charge It to the Right Card—But Pay Up
Don't wait until the last minute to decide which forms of payment you'll rely on during your travels. If you're going out of the country, do a deep dive on the best ways to pay for things, including whether and where you should exchange currency, how to dodge credit card and ATM transaction fees and backup methods for covering costs if your cash or cards are lost, stolen or otherwise unusable.
Whether you're traveling domestically or internationally, you'll want a variety of payment options, including widely accepted debit and credit cards. Figure out whether you could benefit from a dedicated travel or cash-back credit card, as you may want to make even your earliest trip purchases and reservations (such as flights and lodging) on this card to maximize rewards.
To avoid late fees and charges, pay off your credit card balance in full each billing cycle. And don't forget to set up automatic payments before you leave! It's an easy way to simplify before you kick back and relax.
Start Now
Perhaps the savviest thing you can do is start all of the above early—before you reach a critical moment where you've suddenly pressed "send" on that resignation email draft without having a backup plan.
Anna Cherry is a freelance writer based in St. Louis. Her work has appeared in The Hairpin, The Awl, Thrillist, Spiralbound and The Rumpus.
READ MORE: How a Credit Card Saved My Trip
Sources/references
1. Fuller, J. and Kerr, W. The Great Resignation Didn't Start with the Pandemic. Harvard Business Review. Published March 23, 2022.
2. Parker, K. and Horowitz, J.M. Majority of workers who quit a job in 2021 cite low pay, no opportunities for advancement, feeling disrespected. Pew Research Center. Updated April 25, 2023.
3. SURVEY: Higher share of Americans plan holiday hotel stays, hotels top choice for leisure travelers. American Hotel & Lodging Association. Published November 7, 2022.