How to pay for a yearlong family sabbatical. By Jeffrey R. Kosnett, Senior Editor September 30, 2006 Greg Friese and his wife, Amanda, have ambitious plans for 2010. The couple, who live in woodsy central Wisconsin, plan to buy a camper truck and take son Michael, who will then be 5, on a yearlong odyssey through the U.S., Canada and Mexico. The challenge: paying for the trip while forgoing a year's worth of income. "How do we do this and not end up in dire financial straits?" Greg wonders.Greg, 34, owns a profitable business that trains leaders of outdoor expeditions to deliver emergency medical care. He and Amanda, 33, a nurse, have about $200,000 invested in various places and several years to save for the sabbatical. Greg pegs the total costs for the year, including the camper and equipment, at a reasonable $40,000. But outlays such as mortgage payments and insurance stand to boost the year's expenses to between $60,000 and $70,000. Finding the money If you're taking time out, you'll probably need to assemble a budget from several sources. First, if you can commit to a full year away, it makes sense to rent your house and use depreciation and other tax deductions to offset the income. If Greg and Amanda do this and break even, they will save $1,000 a month in mortgage and other expenses. Next, set up a savings plan dedicated to raising money for your trip. To supplement the income from his business, Greg works part-time as a paramedic, netting $500 a month. If he can steer those earnings into a steady, low-risk balanced fund, such as Vanguard Wellesley Income, for three years, he should have $20,000 by trip time. If Amanda can contribute as well, so much the better. Advertisement Eventually, Greg and Amanda will likely have to tap into investments and savings. Their aim is to choose the smartest source of cash. Retirement plans, such as 401(k)s and traditional IRAs, "should be sacrosanct," says Irv Diamond, an investment adviser in Albuquerque, N.M. And the couple should not deplete everyday household savings. An emergency can arise on a yearlong tour as easily as any other time. A Roth IRA is an exception, says Kevin Brosious, a financial planner in Allentown, Pa. With a Roth, you can withdraw contributions tax-free and penalty-free any time (and Roth rules assume you take out contributions first). As long as Greg and Amanda resume investing for retirement after the trip, their Roths, which contain $90,000, are good sources of quick cash. Still, tap nonretirement savings first. Side trips Greg also expects to peel away a few times during his year off to conduct seminars at $750 a shot. That's not a bad idea because his business is the family's security. By working in some work, Greg can advise existing clients and make it more difficult for rivals to step in. Should he lose business, the year away could end up costing the Frieses far more than they anticipate. Otherwise, their plan sounds like a dream come true. Stumped by your investments? Write to us at portfoliodoc@ kiplinger.com.