Gap Year Budget

2016 Income and Expense Report


How can a person afford to take a year off? Gap years seem to make sense for a 20 year old unsure about their life direction. But what about a 33 year old unsure about what the next season should hold? One with 5 little kids, 3 houses, and a dog? Well, the process isn’t all that different. Keep expenses low. (We have $0 of debt, including our cars and home.) Create some passive or residual income. Build up your investments. Keep a good reserve of cash. Then jump.

This is Part three of a 4 part series wrapping up our gap year. In Part 1, I shared about all the unknowns and dealing with the fear of failure. Part 2 I looked at all the questions we had before we started, and the new questions we ended up asking after we started. Today is the numbers. 2016 clocked in around $30,000 plus $6,300 in donations which come from our Giving Fund.

Your gap year budget can be broken into a few categories.

  1. Your basic expenses: By tracking your expenses for a year before then adjusting, you will have a solid idea. If you have long term travel plans, some expenses like rent or an extra car might also go away. For us 12 months of expenses plus 1 long trip was $33,000.
  2. Your extra expenses: Are you going to be traveling, renovating, or starting a business? Save or create extra income to cover those expenses. During our year off we also purchased a pop-up camper for our 6 week road trip and classic car.
  3. Create a buffer: During our year off we kept a pile of cash. In our Net Worth 2016 update, we showed about $50,000 in cash. That buffer allowed us to have fun and enjoy the year with minimal stress. Sometimes people assume that if you aren’t working, you wouldn’t need an emergency fund. The reality is that expensive emergencies can happen anytime. It also brought us extra time after our year off to find a good job, or create a new business.

We are making plans for 2017. We will be transitioning back into earning income. But now it’s on our own terms. No more crazy hours. No more working every weekend and holiday. We will talk about what all that will look like in Part 4. Mr. Mt was offered a few jobs during this year off. To say the shine has worn off the old 9-5 (if we are lucky), 40-50 hours a week, 10 days of vacation, is an understatement. Especially when the social service salaries average $22-$35k in our area.

Between our low expenses and some residual income, we have the flexibility to create the mix of work, travel, and family that is right for us. Taking this gap year opened up a whole new world of possibilities for us. We spent quite a few years keeping our heads down and pushing through. This year has allowed us to pause, take a look around and chart a new course.

If you want more detailed steps about how to save and plan a gap year, make sure you sign up for my newsletter and download the free pdf.



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What is something you would like to try that would require more than 10 vacation days? Any plans for some time away from your work? If you had an extra month, what would you try to do?

Addition: I never did get around to posting our final 2016 expenses. So here is the full breakdown! (One thing to notes is that we redeemed our cash back to cover gifts, which is why our gift cost is so low. Our credit card points average around $500-$800 a year.)

yearly spending for large family on mini-retirement


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20 thoughts on “Gap Year Budget

  1. Thanks for sharing your numbers. Is there a rationale in how you ended up with possibly over-paying taxes by $5k? It seems like in a gap year scenario the extra cash on hand would be comforting, but maybe the knowing that you won’t owe taxes the following spring is more comforting.

    I’ve located a rather inexpensive housing opportunity in the Phoenix area, so I just might end up there this time next year. it’s funny, Phoenix was where I wanted to go right out of college, a state that is close enough to family to visit, but far enough away to have my own life. Also super cheap. If the situation I’m thinking of works, it might allow me to travel during the summer months (unless I went back to traditional employment, which I probably would, in which case I’d be in somebody else’s air conditioning all day, so no big deal). We’ll see though….

    • I thought about trying to explain the taxes, but it’s a whole post in itself. Basically our taxable income this year will be about $15,000-$18,000, but with 5 kids the amount we would get via child tax credit and a bit of earned income tax credit would cover taxes owed plus some. We actually would be in a better tax spot if we could increase our taxable income. Even if we can earn an extra $20,000-$40,000 of earned income in 2017, we might get back a little more than we paid in.

      It might sound strange but I would love to get to the point where we had to pay in a big chunk of taxes. Most years our taxable income has been below $50,000-$60,000. So low to mid earning families with kids have different tax situations. So TJ, are you warming up to the idea of having your own gaggle of kids now? =) I know you have expressed some hesitation. But hey, it’s not all bad. =) Plus we have the cutest Christmas cards.

      • In regards to increasing taxable income, do you have any old traditional 401k/ira that you can do roth conversions to increase the taxable income?

        I’m definitely not going to adopt a gaggle of kids as a single person. 🙂

  2. Thanks for sharing! It’s so great you will be able to move forward with the work/income flexibility.

    My husband took last week off, and it was phenomenal! And I admit, it got the wheels turning on what it would be like if he didn’t have to do the 9 to 5. It’s a work in progress, but I’m hoping to create the flexibility sooner rather than later.

  3. Seriously – I <3 you guys!! Again this is another post I will be directing to every complainer that says they can't live on 30k a year…as a single person. You guys are kicking ass and living in a mindful loving way. Great job on the projected numbers pretty much matching up. That is the hardest part – preparing for what you can't prepare for. I can't wait to see what the new year will bring for you!

    • Thanks! It’s been a crazy year with a lot of twists and turns. I feel like we are settling into a direction that we want to go and starting to plant some seeds. I’m super excited to see what happens in 2017!

  4. Great graphic 🙂
    I’m excited to hear what you have planned for next year.
    One of the things that I like the most about your revenue plan for your year off is that it wasn’t all from one source. It’s risk diversified, which makes it a whole lot better!

    • Having a few options sure takes the stress off. If the stock market had tanked, it wouldn’t have been an issue. Or if one rental sat empty for a few months, not an issue. And keeping a large cash cushion that could cover 100% of the year, if everything else fell apart. =)

  5. $33000 for a year for a whole family, including medical expenses for a new baby! I am in awe. You are far, far better at stretching a dollar than I am. I’ve loved all your gap year posts, thank you for documenting your journey.

    • Thanks! Paying cash for our house sure helps the expenses. =) Property tax, insurance and utilities makes up most of our fixed expenses. Keeping those fixed costs low, really lets us have fun with the rest. After the bills are paid, we still have a lot of money to have fun with. =)

  6. My wife & I took a gap year from August 2015-August 2016 to build a house and transition to new employment. Our situation is similar to yours except we only have an 18-month old and another arriving in April. We couldn’t have done it without staying with family (until we moved into the house) and having a savings cushion. It has been different after taking a 60% paycut, but, the tradeoff for more family time has been worth it.

    • We have given a lot of thought into building a house. =) I think it’s an awesome reason to take a year off. Same with changing jobs. I would totally trade pay for family time. Especially a flexible schedule. I had a job for a few years where I worked every weekend, and during the week only had about 1.5 hours a day with my kids. I hated it. I don’t mind waking up at 5am and working, or working 7pm-10pm from home, but 4-7 each night is my golden time with my kids.

  7. This series has been incredible! I am learning so much, both from a mindset perspective and in regards to facts/numbers. It’s been an insane week for us so I haven’t had time to sit down and comment like I want to – but I am reading these over and over and I love it! Thanks for the transparency.

    I hope you had a great Thanksgiving!

    • I’m glad it’s helpful! I wanted to do something a little less “how-to” and more what the process has actually looked like in our life. I feel like I can learn a lot from other people’s real life examples, even when the situations are very different. I hope you’re crazy week slows down. =) Oh, and I bought a ticket to FinCon. =) Dallas in October just in case you are wondering. 😉

    • Well, thanks. But I’m not sure you are doing anything wrong. Every area has a different pros and cons to cost of living. Our expenses have gone down a bit since we took the year off as well. We are able to fix more things ourselves. Mr Mt is spending today carving up 2 deer that will provide about 50 lbs of meat. When we lived in the DC area, we didn’t have any deer meat, but tons of great free things to do. I think it’s a process to try to leverage the money saving potential of an area. Keep at it. =)

  8. Let me get this straight: 2 adults, 5 kids, a dog, maternity and vacation expenses–and you guys will only spend around $33K this year! Maybe I’m out of line here, but I’m gonna speak on behalf of all your readers and fans: YOU GUYS ARE FREAKING AWESOME. Love what you and Mr. Mt. are doing. You’re proof positive that all you need to do amazing things is a little grit and imagination. “Keep on rockin’ in the free world,” my friend. You guys are a national treasure.

    • Oh, Mr. Groovy, you crack me up! You are right that grit and imagination is where it is at. And maybe a bit of time in the game. Over the years we have gotten better at adding awesome fun stuff to our life while spending less money. Nowadays, even taking a year off, we lack time to do all the good stuff more than the money. Spending an extra $500 a month wouldn’t add that much more to our life. If I could have an extra 80 hours a month… now that would be awesome! There are so many fun free or low cost things to do.

  9. I would love to take a year off and travel with the family. But that is asking a lot.

    Baby steps

    So far
    I’ve taken a year+ off
    And we will take 4 months to travel as a family

    I’m building up to that year. Finances are looking good but we’ll know the outcome in January.

    • Taking a year off is a big goal! One of the baristas at a coffee shop I frequent asked how in the world people do that, “Simple” I said, “we started preparing for it 15 years ago!” 4 months to travel will be awesome! We did a 6 week trip and that was great!