Sabbatical Diary: Preparing Financially

Calculator and Money In this third part of my sabbatical diary, I want to focus on one of the most important parts of the sabbatical: the money. At my institution, a semester-long sabbatical comes with full salary.  A year-long sabbatical comes with a forty percent pay cut.  Many universities make it a fifty percent pay cut.  Many of us who dream of a year away from campus know we have to think carefully about how we will handle that financially, and here are few thoughts.

  • Talk to Someone in Human Resources to Learn What Your Paycheck Will Actually Be.  Someone on sabbatical last year gave me this brilliant idea.  I talked to my HR representative, and she looked at my contract and all of my deductions to give me as close an estimate as possible to what my paychecks will actually be over the next year.  She also talked with me about things I could do to raise my income, such as reducing my retirement contributions for one year.  It is one thing to say that our pay will be cut by forty or fifty percent, but it is another to see what that actually will be after taxes, insurance premiums, and such.
  • Make Smart Use of Corporate (or Independent) Loyalty Programs.  There was a time when my credit card gave me points to use at any Border’s bookstore, but that is no more.  I do, however, take part in other company loyalty programs and have been saving my rewards for the sabbatical.  For example, I registered my gift cards at Starbucks to keep track of my purchases so that I get a coupon for a free drink after every fifteen drinks (which, for some of us, happens every couple of weeks or so).  I also joined the AMC Stubs program so that every dollar my husband and I spend on our weekly movies adds up to free movies and food.  Though my husband pays just as much for the movies as I do, he wants me to take all of our rewards and use them when I am on my fellowship and away from home for the fall, and I have all of my Starbucks coupons in a file to take with me.  One caveat: pay attention to expiration dates.  I have all of my Starbucks coupons in order of expiration so I don’t miss any, and I’ve done the same with the movie credits.  In the comments, I would especially love to hear about other loyalty programs that you take advantage of that we should all know about.
  • Sock Twenty Bucks in Your Sock Drawer Each Time You Get Paid, Starting Now.  This was something I thought of at the beginning of the summer and wish I had thought of two or three years ago.  I grabbed and envelop and put a twenty dollar bill in it on each payday.  It will be the first place I turn for daily spending money.  I just wish I had been doing it for longer, but this may be something I start after this sabbatical ends to get ready for the next one.
  • Be Ready for Change.  I felt really good about how I had set things up financially for the coming year, and then the news hit that Connecticut was instituting a retroactive paycheck withholding tax, meaning that the state will be taking more income taxes out of my paychecks for the next five months to equal what they would have been taking out if the new tax laws had been instituted seven months ago.  This shows how all of our planning does not mean we can anticipate every factor that will influence our income.

What else comes to mind? Please let us know in the comments! (Seriously, with that increase in taxes, I need to know.)

[Image by"> / Creative Commons licensed on Flickr.]

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