Yet, here are the reasons why people take a break from work: To focus on health related issues—both physical and mental health, become a caregiver, continue further studies, or even to pursue a passion such as travelling extensively. Needless to say, a large number of women consider an extended career break after marriage and childbirth.
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Mint spoke to a few individuals who took a career break, either planned or unplanned, and, here is what they had to share. First, they have no regrets about taking a break; second, not earning any income can make life difficult—more than one can imagine; third, financial anxiety or losing a say in the family on financial matters is for real; fourth, the support of your family, particularly your partner, is crucial during this phase; fifth, one must prepare for lower income on resuming one’s career; and last, financial preparedness is a must.
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“We need to challenge ourselves more during a career break than what we normally do, just to remind ourselves that we are useful,” said Vidula Abhyankar, a Manipur resident who quit after 10 years with the HR department of the Indian Air Force (IAF). She extended her career break after childbirth and eventually started an academy for SSB (Service Selection Board) training.
Neha Lagoo Ratnakar, who took a career break when she moved to Brazil with her husband 10 years back, echoes the same sentiment. “While my husband has been very supportive, I saw myself losing interest in the financial decisions taken at home. Financial anxiety is real when you lose financial independence. I think we need more frank conversations around this,” said Lagoo Ratnakar, who now has a leadership position in a Europe-based company and enjoys her financial freedom.
Five years into his career, Chirag Gala quit his job and went on a three-month trip to Europe a few years ago. He said it was an experience that he wouldn’t trade with anything in this world. Prior to the trip, he made sure he was debt-free, built a corpus for expenses to last a year and finished the trip within the planned budget. He, however, began to feel anxious after the trip. “It took me about two to three months before I could find a job with the same salary that I was earning before,” he added.
Issac John, who took three career-breaks so far to pursue his passions, believes that the longer one stays in a corporate circle, the harder it is to make a comeback after a break. “My second break was in 2015 when I was already in a senior-level position in a company I was working with. It took me 18 months to get a job, but it paid me just 60% of what I was earning at my previous company,” he added. John is more prudent about his finances now.
Having shared their financial journey during a career break, all four of them are proud of the life lessons learnt during that period. From the money perspective, the habit of financial prudence that they inculcated when not earning is one thing that they practice even today.
Cutting expenses
To pursue your passions, it’s inevitable to compromise on some of the other aspects of life.
“I resisted travelling completely during my break and also avoided discretionary spending,” said John who took a break to visit New York to learn film-making.
John, who is currently on another break, founded a start-up called ‘Ivory’, a startup focussed on senior citizens. He also authored a book Reboot (on managing career breaks).
Gala sheds light on how he managed his expenses during the Europe trip: “Travel charges, especially to Europe, can easily get out of hand. I went on a shoestring budget of ₹3.5 lakh. For my visit to Iceland, I rented a car and stayed in it —accommodation in Iceland is costly. Food is also pricey there and the options for vegetarians is also limited. For those 15 days, I just survived on fruits and milk,” he said.
Abhyankar says she is aware that she can join some corporate and earn more than what she is currently making from the business which she started during her break. She, however, says that she finds satisfaction in giving back to the country by training students, especially women, who aspire to join the IAF.
Lagoo Ratnakar said she experienced financial dependency syndrome— the feeling that you are no good to anyone anymore and a lack of confidence in taking financial decisions . “It’s not about the money that you have in hand. To feel like a contributing family member is so much bigger. After I came across the term ‘financial dependency syndrome’, I realized that I was not the only one struggling with this feeling.” Coming out of that phase, she authored a book Back on your feet’. It captures the struggles and achievements of 11 women after their career break.
Financial advice
Analysing the impact of your decision on your finances is crucial when considering a career break, particularly if you are the sole earner of the family or if you have dependants. Also, do note that when you quit a company, you will lose the benefits of any group insurance policy that covers your family.
Having a sufficiently large emergency fund is important in the absence of regular earnings. Keep in mind that the career break can extend longer than one hopes for. Avoid taking any debt during this period.
Lovaii Navlakhi of International Money Matters, a Sebi-registered investment advisory firm, says one must also consider inflation while budgeting. “What costs you ₹100 today may go up with inflation, so a higher buffer is necessary, especially in the period you’re not earning,” he added. “It is the time to review spending and avoid discretionary spending. Ultimately, most of your financial goals will not change and it is important to remain focussed on those even during a career break,” he added.
In terms of taxes, while no income during this period would reduce your tax out-go, note that the income from your existing investments might be taxed which needs additional cash outgo. For example, “your interest on PF (provident fund) balance will be taxable when contributions to the fund stops for a certain period,” added Navlakhi. So, it is advisable to take the help of an investment advisor before taking a break.