Planning the Gap Year

As more and more youngsters take a gap year to travel, Shirisha Sunder of Kuvera, a Bangalore based online investment platform, outlines four steps to make planning one easier.

Have you ever caught yourself day dreaming about canoeing down glacial waters or resting on a hammock by the beach, while sitting by your desk during class? Have you ever felt completely lost while wondering what direction your career will take post-graduation?
Then maybe taking some time off, a couple of months or even a year, can be a great option to put you back on track.

A gap year can be tremendously beneficial to one’s personal growth by increasing self-awareness, learning about different cultural perspectives, and experimenting with future possible careers while spending time volunteering abroad or simply traveling the world. It also addresses the academic burnout and gives you a well-deserved break. Traditionally, a gap year is taken between High School and Grad School but today it has become conducive enough to be taken at any point in between life stages and is also known as a Sabbatical Year.

Just as beneficial as it is, planning a gap year can also be a daunting process. Whether you’re a student taking an adventurous time-out after years of education, or a parent supporting your child as they embark on their first taste of independent travelling, learning or working, a well thought out financial plan can facilitate the process.

Here are four steps that can get you going:

Plan the Cost: Begin by deciding on how you’d like to spend the year- travel, volunteer, or both. The most expensive experience program being furthest in your time frame.

Then start by estimating how long it would take to fulfill each experience and make a rough estimate of the costs. The travel, accommodation, food, transport and an allowance.


Sourcing Funds: Compute your total savings till date and the allowance you get per month. Allocate a percentage from both to a Travel Savings. Invest the travel funds.

Investment Options: As there would be a minimum of three years from when you start out in college till you graduate, it gives sufficient time to take adequate risks for a higher return on the limited funds invested. For a complete optimization of your funds the best option would be Direct Plan Investments, i.e. investing in Mutual Funds without paying commissions. You can learn more about Direct Plan Investments here.

Another option would be to build your own Stock Portfolio but that would involve extensive research and constant tracking. Mutual funds are ideal for an individual investor who don’t have the time to follow the market regularly.

Managing the Investment: As Warren Buffet says,” Do not put all your eggs in one basket”, diversifying your investments in different Mutual Funds, in a proportion that best aligns with your risk tolerance is the best way to manage your investments. And Kuvera offers a one-stop shop to not only manage and track all your Mutual Fund investments but also to review your goals from time to time.

Although there are many aspects to consider before deciding on taking the gap year, organizing your finances and budgeting your costs well in advance can lighten the decision.

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