Chris Thornburgh

Balancing your work life and family life can be challenging at times. Many women are faced with the decision to take a career break to hold it all together. For most, this means taking time off for a new baby. For others, it may mean stepping back from the workplace to care for elderly parents or to follow other interests. Whatever the reason, one of the most worrisome aspects of a career intermission is the financial implications. Consider these tips to mitigate the financial impact.


If you have the ability to plan ahead, review your spending for one month. Track every penny. Then ask yourself what will your budget look like without your income. Live on a reduced budget before you go on break and change your spending habits now.


Find missing money by monitoring impulse buys. Do you buy more groceries and gadgets than you really need? Whittle this habit down early so you can free up funds to pay off debt or save for reserve. Shave your spending habits by cutting back the number of times you eat out. Find alternative ways to socialize besides hitting the restaurant circuit every Friday and Saturday night. Are you in a position to negotiate a less expensive mobile phone plan? Focus on ways to free up cash flow.


The nature of your debt and the length of your leave will determine your debt approach. Ideally, you can immediately reduce debt with the money you save from cutting the fat. This may be the perfect time to refinance your home mortgage at a lower rate and a lower monthly payment before your income changes. Cars can also be refinanced for a lower payment. Of course, lowering the payment will extend the loan’s duration, but cash flow is often key when you have to step out of the workforce. A knowledgeable CPA can help you organize a game plan to efficiently minimize debt.


If time is on your side, aggressively build up a cash reserve. Now that you know what you are spending every month, build your reserve based on your living expenses and length of your break. Add a buffer for the unexpected. Two things that you want to make sure you can cover are health insurance and retirement contributions.


You may be able to stay on your employer’s health insurance plan if you are on an approved leave of absence. If not, you can get COBRA coverage or catastrophic coverage to ensure that you have protection in the event of an accident. However, not all health insurance plans qualify to protect you from the current individual mandate penalty if your plan does not meet “minimum essential coverage.”


An aggressive start to your retirement savings can help make up for a lack of contributions during your hiatus. Too many women shortchange themselves by discontinuing their retirement contributions. This is problematic given divorce rates and longer life expectancies.

Even though you aren’t working, you may be able to contribute to an IRA if you are married and your spouse works. Plan ahead and include this cash outlay when calculating your needed cash reserve.


If you plan to return to your career, stay engaged professionally. Remain in touch with professional contacts and keep your foot in the door. Part-time work and flex schedules may later be an option.


Don’t let an employment break derail your long-term financial plan. Preparation and strategy can minimize a break’s financial effects.

Chris Thornburgh is a CPA and partner at Brown Armstrong Accountancy Corp. Contact her at or 324-4971. The views expressed in this column are her own.

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