Last October, I wrote about choosing to quit my job instead of wasting my time as a quiet quitter. Eventually, I left the firm in December because my ex-manager offered me a 2-month contract role as a Fractional MarTech Lead where I continue to manage my team and work on CRM & MarTech strategies for 2.5 days each week. It was a good gig that allowed me to gradually transition into my career break.
Embarking on a career break often conjures images of relaxation and self-discovery, with a YOLO travel adventure. What it doesn’t immediately suggest is a financial revelation. However, that’s exactly what I encountered. To my surprise, taking a break from my career led to a significant decrease in my expenses, from a monthly average of $3,968.10 in 2023 to just $1,914.47 in January 2024. This unforeseen financial benefit prompted me to reassess not just my career, but my entire approach towards how I live and personal finance.
The idea of a career break is often associated with increased spending, as people imagine traveling or indulging in hobbies. My experience, however, defies this expectation. The reduction in my monthly expenses was profound and brought to light the impact of daily work life on my finances. I was also able to trim away some of the lifestyle creep that had accumulated over the years.
This article aims to delve into how this unexpected change occurred and the insights I gained from it.
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What my lifestyle was like before my career break
Before my career break, my lifestyle was typical of many working professionals. Mornings were rushed, often squeezing in a quick gym workout before starting the morning with a purchased coffee and ending with a late dinner, usually bought on the way home. My expenses were inflated by the cost of convenience: taxi fares if I was running late, lunch from nearby eateries with the occasional indulgence in restaurants, and frequent social alcoholic outings with colleagues. These seemingly small daily expenses added up, culminating in an average monthly expenditure of $3,968.10 in 2023.
In addition to daily living expenses, there were hidden costs tied to a professional life. The wardrobe for work attire, the occasional gift for a colleague, treats and rewards for my team members, and the subscriptions to services that promised to make life more efficient, have all contributed to the monthly financial outlay.
Reflecting on this, it’s clear that my lifestyle was not just a series of personal choices, but also a reflection of the work culture I was part of.
How I planned for my career break
Choosing to take a career break was a decision born out of a desire for change. It wasn’t just about stepping away from the office; it was about reevaluating my life’s path. At 40, I feel that if I don’t initiate a change now, I may never have the will or luxury to do this in future when I am much older.
Financially, it was a leap into the unknown. Without a regular income, I would be lying if I say that I am not worried about maintaining my lifestyle and meeting my monthly financial commitments. To prepare, I meticulously planned my finances and set a strict budget for the duration of the break, aware of the potential financial pitfalls. It helped that I have 10 years of data from tracking my personal finances to analyse and backtest.
This decision was not taken lightly. I spent months planning for this, buffering up my emergency savings fund, and trying to anticipate every possible scenario. I was conscious of the financial risks involved, yet I was also motivated by the potential personal growth and the opportunity to break free from the relentless cycle of work and spending.
I also had to prepare myself mentally that I am taking my foot off the early retirement pedal and that means I may not be able to retire by 50, like what the blog is supposed to be about. The fact that I will not be making socking surplus income into my investment portfolio every month meant that the portfolio figures will be stagnating for a while. It helped that topping up my CPF Special Account a few years ago had allowed me to reach Full Retirement Sum early and this career break will not have any major impact my CPF Life payouts at 65.
My observations during the first month of my career break
The first month of my career break was a revelation. My daily routine underwent a complete transformation. The hectic mornings were replaced with a leisurely pace. I found joy in simple activities like having a morning walk around the neighbourhood, making my own coffee and cooking meals. The absence of a daily commute meant more time for self-reflections, walks and enjoying the outdoors. These changes, while small, had a significant impact on my mental well-being and how I spend my money.
Without the need to adhere to a professional dress code, my clothing expenses became non-existent. I no longer needed to budget for work lunches or the convenience of taxis. In fact, everything I needed was walking distance in my neighbourhood so I did not even have to take the public transport in most days. Additionally, the social outings that were almost obligatory previously became less frequent but more intentional. Now, I get to choose who I want to hang out and spend time with. This lifestyle shift was not just about cutting costs; it was a move towards a more intentional way of living.
Changes to my expenses during my career break
The drop in expenses was stark. The most significant savings came from a reduced frequency of eating in expensive restaurants to more hawker meals and home cooked meals. While cooking at home incurred a slight increase in grocery expenses, the drastic decrease in food expenses outweighs the additional grocery costs. It helped that I am a decent home cook with a good knowledge of food storage. I would stock up my freezer and pantry with produce and condiments that were on sale because I know how to turn them into home cook meals.
A close to non-existent daily commutes led to a significant reduction in transportation costs, even though they were not high in the first place. Furthermore, without the need for office attire and professional grooming, my shopping budgets saw a substantial decline.
Here’s how some of my variable expenses look like, compared to the monthly average in 2023.
This financial change was not merely a consequence of spending less because of having zero income. It was a reflection of a lifestyle that prioritised simplicity and self-sufficiency over convenience and outward appearances. This shift highlighted how much of my spending was tied to my professional life along with expectations from people around me. Stepping away from that led to significant financial savings.
Reflections and insights from my new lifestyle
This unexpected financial benefit from my career break led to profound reflections on my spending habits. The drastic reduction in my expenses was not just about saving money; it was about redefining my lifestyle and priorities. The break allowed me to understand the importance of mindful spending and the potential for significant savings without compromising my quality of life.
This period of introspection made me realize the value of financial independence and the freedom it brings. It prompted me to question the necessity of some of my previous expenses and whether they truly added value to my life. This insight is something I plan to carry forward, even as I eventually return to the workforce.
The broader implications beyond personal finances
This experience is more than a personal finance story. I’d like to think that it’s also a lesson in the profound impact of our daily lifestyle choices on both our mental and financial health. I am inclined to think that a more balanced, less hurried lifestyle can lead not only to personal well-being but also to financial stability. This could be an essential consideration for anyone aiming for financial freedom or early retirement.
For those considering a career break, my short experience at this point shows that it can be more than just a pause from work; it can be an opportunity to reassess and realign your financial goals. It highlights the importance of flexibility in our financial planning and the need to adapt our spending habits to our changing life circumstances.
My takeaway from the first month into my career break
I have found that a career break can be more than just a pause from my professional life. It became a transformative journey in both lifestyle and financial awareness. The significant drop in monthly expenses was a wake-up call to the potential savings that can be achieved by simply re-evaluating our daily habits and lifestyle choices. This experience has taught me the value of living a life that is not dictated by work demands but guided by personal values and financial goals. I intend to write more about this area in future to explore living beyond the personal finance perspective.
Have you made lifestyle changes that have impacted your finances? Are you worried about the impact that taking a career break could have in your financial journey? Leave your comments below to share your thoughts about the intersection of work, life, and finances so that I can learn from your experiences.