Financial Planning for Taking Time Off to Focus on Mental Health

Striving for career advancement can be rewarding, but not at the expense of your mental well-being. Recent instances of prominent athletes like Naomi Osaka and Simone Biles prioritising their mental health by withdrawing from their respective sports events serve as a reminder for us all to assess our own mental states. This shift in perspective may lead to more open discussions about the importance of taking time off when necessary for mental health.

Mental health issues, such as anxiety, depression, and burnout, result in approximately £1 trillion in lost productivity for the global economy each year, according to recent research in The Lancet. The ongoing COVID-19 pandemic has exacerbated psychological challenges since 2020, adding financial stress as individuals cope with fear, anxiety, emotional distress, illness, bereavement, income loss, loneliness, and social isolation.

I personally experienced a severe burnout in 2019 that left me unable to work for a month. In the aftermath, I had to invest in counseling and other expenses, like takeout and babysitters for my son. Fortunately, I had an emergency fund to cover these costs.

In hindsight, I wish I had taken proactive steps to plan for this time off instead of being pushed into it. If you’re in a similar situation and contemplating a mental health break, here are some financial strategies to consider:

  1. Financially Planning for Mental Health
    • When planning for a mental health break, whether you’ll receive partial pay or need unpaid leave, budgeting is essential. Expect a reduced income during this period, so make adjustments to your spending habits. Ideally, you should have a well-funded emergency fund to cover unexpected expenses.
    • If you’re considering taking time off in a few months, allocate funds for a more substantial emergency fund to avoid relying on personal loans or credit cards that could lead to debt. Also, evaluate your budget to identify areas where you can temporarily cut expenses. Explore benefits provided by your employer or health insurance, such as free counseling sessions through the Employee Assistance Program (EAP). Additionally, look into nonprofit programs offering reduced counseling fees.
  1. Negotiating with Your Employer
    • Initiate a conversation with your employer as an essential step. Present your need for time off early in the planning process. The current emphasis on mental health and career may make companies more receptive. When discussing your break, articulate its benefits to you and provide a potential coverage plan for your absence.
    • Familiarize yourself with company benefits and leave policies or formulate a plan if these are lacking. Be open to the discussion, as you may find your employer more understanding than expected.
  1. Exploring Short-Term Disability and FMLA
    • The options for filing a short-term disability claim vary depending on your state’s laws and your employer’s policies. Short-term disability can provide income protection if you’re diagnosed with a mental condition caused by workplace stress, as diagnosed by a medical professional. This leave can extend for several months, with some instances granting up to 80% of your gross income, depending on your employer’s benefits.
    • You might also be eligible for leave under the Family and Medical Leave Act (FMLA), which offers up to 12 weeks of unpaid leave for specified family and medical reasons, while ensuring job protection. Unlike FMLA, short-term disability may not guarantee job security. However, employers with 15 or more employees must make reasonable accommodations for employees with disabilities.
  1. Utilising FSA or HSA Funds
    • Health savings accounts (HSA) and flexible spending accounts (FSA) are tax-advantaged tools that can help cover various healthcare expenses, including mental health. Since many mental health services may not be fully covered by regular health insurance, these accounts can be used to pay for such expenses with pre-tax dollars, potentially saving you money.
    • Seeking Support Do not hesitate to reach out to friends and family for support. Dealing with mental health issues or concerns about job security during your leave can be overwhelming. Remember that your well-being should be your top priority.

Final Thoughts

In conclusion, prioritizing your mental health is not only crucial for your well-being but also for maintaining your long-term financial stability. As we’ve discussed, taking time off to address mental health challenges requires careful financial planning. Whether you’re considering a temporary break due to burnout, anxiety, or depression, the following steps can help you manage your finances effectively:

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