How to quit your job to travel (plus some sexy tax tips)
(Original article taken from www.unexpectednomads.com)
So quitting your job to travel is a big deal. For most people, this isn’t a decision that can be made lightly or put into action overnight. There are bills to pay and commitments, both financial and relational. Then there are worries about stepping off those rungs that you’ve spent climbing on your “career ladder”. And how the hell do you go about travelling anyway?
These are all questions that I faced when I decided to quit my corporate job (which was, by many measures, a “successful” and decent job) to explore the world. From my many conversation with friends, acquaintances, colleagues and strangers, I know these are questions that many others have on their minds when they think of following their dreams.
I hope the following post will provide a high level guide to those who feel that escaping the 9 to 5 is out of reach, or are struggling with where to start making their dreams come true.
A disclaimer: big life decisions such as these are highly personal and each person’s experience will look very differently to another person’s. These are the steps I went through, or what I wished I’d gone through better, but by all means are not the only way!
“If you want to build a ship, don’t drum up people to collect wood and don’t assign them tasks and work, but rather teach them to long for the endless immensity of the sea.” — Antoine de Saint-Exupery
If you’re reading this, chances are that you already have an inkling, a curiosity to leave behind your current life to explore the vastness of creation. All dreams and great acts start off with such small sparks, but most of these remain just that.
Continue to feed the spark that inspires you, whether this comes in the form of talks (Peter Rollins, Elizabeth Gilbert), films (Wild — Cheryl Strayed), books, songs, travel blogs (Half A Shoe String, The Zen Nomad) or documentaries. Nurture this and turn this into a small flame that you’ll continuously feed throughout the journey that you haven’t yet started.
Getting your bearings — start with why
“Start with why.” — Simon Sinek
Like with all major life decisions, it’s important to get your bearings. Most of the time, you won’t know your destination, but it’s good to consciously decide the direction of your first steps.
Study how you feel as you feed your spark of inspiration and note what makes you feel inspired — alive. This will give clues as to what your travelling will look like. What will give you the most satisfaction.
People travel for so many different reasons. In just my first two months of travelling, I met so many different types of travellers, each with their own motivations and goals. Some love the “travel hacking” life and spend their time researching air-miles and specialist credit cards. Others have a checklist of sights they want to see (e.g. the 7 wonders of the world). Others are motivated by happiness indexes, great landscapes or the price of beer.
Figure out ‘Why’ you want to go travelling. Remember that there is no one-size-fits-all answer. You have to find your own and not take on someone else’s answer. Otherwise you might as well stay in that job you want to leave — at least you’ll get paid for it!
Planning and research
The next step is planning and research. You’ll use the previous step to guide you as your plan your destinations, how long you’ll spend in each location and in total, and what you want to do there.
Personally, this is still very vague for me. My travel philosophy is that I don’t want to plan out the minutiae — we’ve left our travels quite open ended on purpose. That said, we know we’d ideally like to be away until June 2018 at least and cover South East Asia and South America at some point during that time (and now maybe Eastern Europe too). With this extremely rough idea in mind, this allows us to plan the most important factor that’ll determine the viability of our travels — finances.
1. Financial audit and budget
This is the first step to ensuring that you turn your travel dreams to reality. You can’t start this soon enough, and I might even have put this step right at the top of the page. A firm grasp of your financial situation is the foundation on which your travel plans will be built and what will sustain you whilst on the road. In fact, I didn’t even have a concrete desire to go travelling when I first started to put my travel fund together — it was initially ear marked for a life coaching certificate!
From the previous step, you should have a rough estimate of your travel budget. For us (and this figure will vary, although probably not as much as you think, depending on how you want to travel), I estimated that we’d need an travel fund of £10,000 — £11,000 per person. We wanted to be away for 10–11 months. We’d target a monthly spend of £600 — £650 (which from our research should be comfortably do-able), add in £2,000 for transport and, crucially, add another 20% as a buffer.
Start up a simple spreadsheet detailing your cash to hand (current account, savings account, ISAs and any money tied up in funds). Add in your monthly income less your monthly spending (at current levels — take this from your bank statement), and you should have a rough idea of how long it would take to reach your travel fund goals. Don’t be discouraged just yet! Now add a field where you can input a revised monthly spend figure, as we’ll aim to knock that down.
2. Save money
If you’re anything like I was, spending money as fast as it was coming in (which it did, very reliably, in my corporate job), this may seem a foreign concept to you and a very difficult barrier to overcome. Having grown up with very little with constant financial pressures, I really enjoyed being able to not think about how much I was spending. Yet this was what kept me in the rat race and held me back from going after my dreams.
Now, you don’t have to go the whole hog and start obsessing over each purchase you make (although this isn’t a bad habit to get to — you can use apps such as Spending Tracker, YNAB or Mint, or the Monzo card). I’m a firm believer in the Pareto Principle (or the 80:20 rule), so I’d look for areas where you can save a big chunk of money by just being a little more aware of what you’re spending.
For me, this mostly involved reducing my drinking (£80 a month) and eating out (£200 a month) and choosing my lunches more carefully at my staff canteen (£50 a month). I also stopped my monthly pass and started to cycle to work (£130 a month). I realise that I was in a very privileged position and many will have to try much harder (and some much less hard) to scrape together the funds, but it’s possible and you know it’s worth it!
There’s a whole host of articles with tips on how to save money — some good and most pretty obvious (move home and save on rent, give up your car etc.) — so I won’t go into more detail here. You can also choose to focus on increasing your income too — this again is an area that’s overdone and one which I’ll skip for now (it’s mostly stuff like “sell your thing”).
3. Timing — taxes
Depending on your earnings and the timing of your leaving work, you have the potential to increase your travel fund by thousands of pounds!
I just wanted to add a section here on timing. This is an example of Pareto’s Principle at work and, although it was UK-specific for me, I’m sure there must be similar tricks you can do in other countries.
Due to the timing of me stopping work (July), I’d had a good chunk of the year in which I’d been paying tax at a higher rate of tax (40%) through PAYE, when in real terms I’d only earned enough to be paying at basic rate (20%) for a small portion of my total earnings. This meant that I was due a sizeable refund on my tax, one which would boost my travel fund considerably.
In the UK, it’s easy to apply for the tax refund via an online form P50 (or printed, if not possible online). They should process this within a month or so, and the tax owed will be refunded straight into your nominated bank account. Just make sure you chase up your P45 from your previous employer, although it’s possible to apply for the rebate even if your company’s HR department messes up and doesn’t send you the form.
If I left work at the end of one tax year (March), I would have forfeited an entire year’s worth of personal allowance (c. £11.5k of income that I can earn tax-free in one year) and a lower tax band of 20%. Depending on your earnings and the timing of your leaving work, you have the potential to increase your travel fund by thousands of pounds!
1. Go on a micro-adventure to test out the waters
Ok, so now that you’ve set yourself up for success, it’s time to test out the waters and prepare yourself for a life on the road. It’s a mini trip to whet your appetite. For us, Iris had a short trip with friends to Cairo (also the backdrop to Iris’ why) and I went to Warsaw for my first solo trip! It’s a great time to test out living out of a backpack, albeit for a short time!
2. Book your first flight out
You’ll really feel like it’s actually happening when you book your first (one-way?) ticket! It will also give you a date to aim for in terms of sorting out the rest of the preparation and logistics!
3. Get rid of stuff — minimalist living
You’ll likely be living out of a backpack, or at most a suitcase, for the next few months / years. That means you’ll have to put most of your stuff in storage or get rid of them somehow, and embrace minimalist living. Getting rid of stuff is the cheaper option and one that I’d recommend. In addition to being cheaper, there is a growing body of research (as well as ancient wisdom) that having less stuff will make you more content and better able to make clearer decisions.
4. Sorting out your house or flat
If you are the lucky few that own a home, but have mortgage payments to make, you may have to rent out your flat while you’re on your travels. Check with your mortgage provider whether you are able to rent out your property (you may have to pay additional interest rate). Open up a spreadsheet and do your sums (estimated rental income less mortgage payments, taking into account any additional interest rate you may have to pay, agency fees, emergency fund for repairs etc. You most likely will end up with a negative cashflow, but remember that you’re paying equity into the property!
You could also look into renting out your property on Airbnb during peak season, which could considerably increase your total rental income. Check for any local restrictions on this.
5. Travel vaccinations
Arrange a vaccination consultation with your doctor a couple of months ahead of your scheduled departure date. If you’re in the UK like us, you likely won’t have to pay anything for the most common vaccinations. They will check for you any vaccination requirements that counties might impose on visitors (e.g. some countries will require proof of vaccinations for yellow fever, depending on where you’re travelling from).
6. Travel insurance
In addition to your peace of mind, certain countries will require proof of insurance before they let you into the country (Cuba is one such example).
Everyone talks about World Nomads, which is great for long-term travel where you’re out of the country for more than a month or two, with coverage over most adventure sports. We’ll probably get this when we set off to South East Asia, but we went with a different provider for our trips to Cuba, Italy, Romania, Czechia and Morocco, as we came back to the UK in between those trips.
A “normal” annual insurance that covers trips of up to 30/60 days in length is considerably cheaper than a “backpackers” insurance that covers trips of more than a few months. It’s worth considering, depending on what your travels look like.
7. Travel money
When you’re looking to spend several months on the road, getting smart with travel money can make a big difference! Look for specialist FX cards that will shave pounds off ATM fees, commission and exchange rates. With the explosion of FinTech around the world, you can get nearly perfect exchange rates and avoid fees around the world!
My current favourites from the UK are Monzo, Revolut (which also allows you to trade at interbank rates between GBP, EUR and USD) and Halifax Clarity.
Monzo and Revolut in essence act as prepaid cards and are more favourable in terms of the foreign currency you get, but both have a monthly cap in place for ATM withdrawals (£200 each at the time of writing). Monzo also has an annual withdrawal limit of £2,000.
Halifax Clarity is a specialist FX credit card. It has higher limits but charge (a low) interest rate from the date of withdrawal. We are planning on using this as a backup in case we reach our ATM limits on our other two cards, or if the cards have system issues (which they do, from time to time, as they are both start ups!)
I’ve met many travellers on the road using their debit cards to withdraw cash or walking around looking for a place to exchange cash, which itself brings its own set of problems of scams. I just stick my cards in any ATM machine from any bank and withdraw money like a local. Just remember to reject the ATM machine’s offer to charge your card in your local currency — the exchange offered is always extortionately bad.
It’s now time to hand in your notice at work! Congratulations, you’ve finally made it!
A note of caution — don’t burn bridges. You may have hated your job, but more often than not this is more to do with where you’re at and not the job itself. You may need a good reference from them in the future or even go back to full-time employment with them.
Be mindful also of your colleagues, who might actually enjoy their jobs or are on their own journeys! Don’t be a dick!
Bonus content — personal audit
Before you set off, remember to do a personal audit of your skills and experiences. You may be able to supplement your travel fund whilst on the road, or barter for free accommodation and food in exchange for your skills. Skills might include your mother tongue (English), website development, social media, proof reading, manual labour, music etc.
You can find work on sites like WorkAway or even just barter your skills out with individuals. Iris spent a month at a boutique hotel in Sicily with accommodation and food, a placement she found through WorkAway. I spent a week teaching at an English immersion programme (Angloville) in the Czech Republic, speaking with locals at a nice hotel in the mountains. Although both were hard work, they were great ways to meet locals, get fed(!) and sleep in a nice bed (for Joey, at least).
So that’s it for now — well done for hanging in! Let me know if you have any questions you’d like answered or if you have any tips of your own.
Note: You will receive a free £30 credit if you use our AirBnB link to sign up, and we also get a small credit from the company at no additional cost to you when you book your first trip or rent out your home for the first time. Thank you in advance for supporting our travels this way!