Back in Munich after the quite decent Italy journey of 7 weeks.
A very good duration for a trip in my opinion.
Unfortunately for most employees quite difficult to manage if you are working (like Woodpecker).
But you might go back to this post for some ideas how you could manage as well if you want.
So this is a good time to think about how to achieve great breaks like this regularly.
So I would like to share the current plan on how to go forward as well as laying out a general tabulation below how you can do this as well:
Woodpeckers current plan is to plop in parental leave, sabbatical months of unpaid holidays every 2 years. In doing so, much of the regular holidays can be saved and transferred to the other years, thus giving them a boost of free time as well.
This year the 5 months of parental leave produced about 100 additional days off (A big Thank you goes to my younger boy as well as to the German state – …don’t bore everybody by mocking about the rules, but just make the best out of them!).
No need to say I don’t need regular holidays anymore in this year and can easily transfer the maximum of 10 days to next year. Combined with regular holidays and the maximum of allowed over-time converted into additional holidays the plan is to come up with 50 days off next year.
A year later I hope to chunk in an additional block (min. 4 months) of unpaid parental leave (you can do that until your kids are 6).
And so on. Later – hopefully – unpaid vacations have to take over the part of parental leave. Same story but I will have to discuss with my employer in that case. However I’m quite positive that they understand this is the best – and a cheap – way to satisfy an employee and keep him with the company (most if not all others will stupidly ask for more money year after year).
But obviously there is a price to be paid: Lost income!
But then, once you understand the law of marginal taxation, the loss is not so big in the end (see here or in the example below), and a bit of frugal living can easily make up for it.
Unfortunately, the tax effect takes only place in the years where you take unpaid holiday/parental leave. Thus an arrangement with your employer for yearly unpaid holiday would be even more tax efficient.
Actually I’d say that for a 10% loss in net income you can boost the ratio of free days to working days (I’ll call it holiday ratio) from about 0,5 for a typical German to 0,9 to 1 ! (Might work a bit different in your country, but I am sure the mechanics will be similar. Let me know your situation!)
That’s great, isn’t it? One day off for each day of work! And you can easily save the 10% of lost income by only using only the most basic and easy concepts of frugal living.
If you do the frugal living concept a bit more serious (but long from badass yet…) you will easily be able to still stash away money significantly going down that way, so you might improve your holiday ratio further later. I’d say 2:1 would be a fair and reachable goal in 10 years.
I found out that I personally do not want to keep up with the extreme badassity of more serious downshifters and the necessarily implied very basic lifestyle. I love travelling, sailing and some other activities too much to be ready to let all of that go as soon as it costs a certain amount of money.
So for me the proposed downshifting scheme is a valid concept, if you are not badass enough to go the extreme early retirement way or still want to maintain some costly hobbies.
Let’s look at some stats to see how the alternative concept might work:
|Typical German||Alternative concept|
|Stage 1: Min. 4 months unpaid each two years, immediately|
|Average days off||27 days||75 days|
|Average work days p.a.||220 days||<170 days|
|Average free days incl weekend||115 days||>165 days|
|Free days / work days ratio||0,52||ca. 1|
(4 months unpaid each 2 years+ tax effect)
|Stage 2: 4 months unpaid each year (or reduction to 3 work days per week), 10 yrs from now|
|Average days off||27 days||115 days|
|Average work days p.a.||220 days||<130 days|
|Average free days incl weekend||115 days||>205 days|
|Free days / work days ratio||0,52||1,6|
A further third stage could lead to early retirement around 20-25 years from now.
Then the kids are out and costs will go down accordingly.
Savings rate will then drop to the negative obviously, but due to much lower consumption than the average German, you stash should be sufficient.
|Note that the calculation above is based on only one partner working. If the second partner decides to start working as well (or if you have no kids), you might reach the second stage much earlier.Another objection might be that your employer has to say yes.
But did you ever hear about “Fachkräftemangel”, i.e. the lack of professionals due to demographic development? In most western countries your value as a potential employee will shift up massively within the next decade.
10 years back when I started to work, employees had to swallow a lot because employees were in excess supply. This is changing rapidly and it’s time to turn around the spear and put forward your demands.
Obviously do a good job, coordinate with colleagues and make reasonable proposals and allow others to slowly get used to your needs.But:Don’t be too shy in saying what you want!
E.g. Unpaid holidays are not something most employers cannot accept if they really try.