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Fulton Bank
Fulton Bank

How to Take Extended Leave When You're Self Employed

When you're a freelancer, a gig worker, or running your own business, it can be hard to imagine taking an extended leave of absence from your job.

But it's not off the table. With some careful planning, you can take the time you need to care for a family member, take maternity or paternity leave, or simply enjoy a well-deserved vacation without hurting your business.

Below are six tips for taking an extended leave when you're self-employed.

1. Start a dedicated savings account to help finance your leave.

It's always a good idea to set aside money for a rainy day. As a self-employed person, it's especially important to build a savings cushion to get you through slow times or extended leaves of absence. After all, you likely don't have access to a bank of paid time off for whenever you need time away.
If you're anticipating a long break from work, start setting aside money early. Consider opening a dedicated savings account to help cover expenses during the time you won't be earning income. If you mix this money with the rest of your business income, it might be tempting to spend it or put it toward other expenses—a separate account can help keep you accountable.

2. Set a realistic savings goal.

How much do you need to save? That depends on your lifestyle and personal needs.

First, remember to account for all your fixed expenses, such as a mortgage, car payment, utilities, insurance premiums, and loan payments. Then, think about your variable expenses: How much do you usually spend on groceries, entertainment, and shopping over the course of a week or month?
The reason for your leave may also guide you toward a specific savings goal. If you're taking an extended vacation, you might want spending money for excursions or souvenirs on your trip. If you're taking maternity or paternity leave, you may need funds to offset new expenses like diapers and formula, along with conveniences like carryout or babysitting help.

3. Look into benefits offered through your state.

Even though you can't tap into employer-sponsored benefits like paid maternity leave or family leave, you could still be eligible for benefits offered through your state.

Some states, like Maryland, Washington, Colorado, Connecticut, and Massachusetts, offer paid family and medical leave to self-employed individuals. If you're eligible, you can opt in to pay a premium for access to a certain amount of paid time off each year. Premiums are often calculated as a percentage of your self-employed income.

Programs vary by state in terms of costs and coverage amounts. To see if your state offers benefits and to determine your eligibility, search your state's website for information about paid family and medical leave for self-employed individuals, or work with a trusted financial advisor.

4. Communicate a leave plan to clients at the right time.

You don't want to surprise your customers with an impromptu absence—but you don't need to give a full year of notice, either.

Try to provide your clients a heads up a few months in advance, if possible, for any lengthy absence. This may not be feasible in the case of an illness or family emergency, but for a planned vacation or parental leave, it's important to keep your valued customers and clients in the loop.
When you notify clients, share details explaining how you'll adjust for your time away. This might include getting ahead on work (more on that below) or referring clients to another freelancer or business to fill in during your absence.

If your small business has employees, you'll also want to give them ample notice and support before your leave. That could include training them on how to handle certain duties in your absence or making a plan for them to reach you in case of questions or emergencies.

By covering your bases, you'll leave your customers and your team with peace of mind and maintain the trust you've worked hard to cultivate.

5. Work ahead where possible.

The further out you plan your time off, the longer runway you'll have to work ahead on your obligations.

Manage your workflow carefully to avoid a mad scramble in the days leading up to your leave. If you plan to work ahead on projects for existing clients, avoid accepting new projects or taking on new clients until you've returned from leave. Organize your calendar and use your favorite time management tools to prioritize your work and start chipping away at projects with later due dates. The work you accomplish now will be a gift to your future self.

6. Plan your return.

A little bit of advance planning can ensure a smooth transition back to work after your leave.

To start, you may want to budget for a slow period when you first get back. It might take time to ramp back up to your pre-leave workload and income level.

To ease the transition, book work in advance, if possible, so you can hit the ground running when you return. In the final weeks of your leave, call or email your regular clients to remind them you'll be soon back and ready to work.

Step away from your business with confidence

If you're self-employed, it might feel like taking an extended leave is nearly impossible. But with careful planning and open communication with your customers, you can take the time you need and still continue to run a thriving business.

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