5 Reasons You Should Take a Pay Cut
Many people consider making more money as one of their major life goals. Most of us plan to advance in our careers, and progressively make more money. Usually, the idea of taking a pay cut and actually losing money, rather than advancing and making more money, is viewed as a negative change. Having less money creates a problem for many reasons, especially because we usually get used to living at a set budget, and if our income goes down, it affects our bills and our way of life. Sometimes, however, a pay cut is the best choice. Although money is helpful and necessary, there is no set amount that everyone needs, and even if a person gets used to living on a set amount, they may be able to change their lifestyle if necessary. Although a pay cut is almost never what a person wants, sometimes there are reasons to take one that can justify losing money.
1. Your current job is too stressful
If your current job pays a lot and is stressful — or is just stressful even if it doesn’t pay as much as you would like — it might be worth taking a pay cut to have an easier job. Stress isn’t healthy, and your job might not be worth it if you feel stressed constantly. If you can find a job that is more relaxing and pays a little less, you might find that the loss of income is worth it. In addition, stress can affect your health, so having a job that has more consistent hours or less demands might help your overall health, which can actually save you money over time.
Staying healthy can help you use less sick days, and you can stay healthy by flossing and brushing regularly, getting regular dental, medical, and vision exams, and by exercising and eating well. Of course, less stress also helps your health, which is why a pay cut might be the best choice if you can have a less stressful job.
2. Your dream job pays less
Few people get to have their dream jobs, so if the opportunity comes to try out your dream career, you should take it. One of the best reasons to accept less money is if you know that the job you are considering will make you happy. Being happy at work can be a great relief, and could potentially affect the rest of your life as well. If you are happier at work, you may find that you are happier at home, because you won’t be bringing work stress home with you when you leave your office.
If you do have to take a pay cut, you can survive it by being ready emotionally and mentally to make the necessary lifestyle changes, and remember to budget for any new expenses that might arise. Lastly, be prepared to go back to a job that pays what you need if your dream job doesn’t work out.
3. You want to keep your job
Unfortunately, sometimes companies have to make layoffs in order to stay afloat. If you are worried that you won’t find another job, or you have already invested a lot in your company and want to stay there, you might need to consider a pay cut. Sometimes companies will cut hours, perks, and wages in order to avoid letting go of employees.
If you think that your boss or the human resources department might be up for having a discussion, you can offer to give up certain perks first. Especially if you have a spouse who has good benefits at their job, this may be a way to avoid losing money from your actual salary. However, you may find that your company needs to lower salaries, in which case you will have to determine whether or not you can handle a pay cut.
4. You’re changing careers
If you decide to change careers, you may need to take a pay cut. Regardless of whether or not you are switching to your dream job or just trying something new, your new field might pay less. Also, even if you have years of experience in one job field, you might have to start from the bottom if you switch to a different career, and this will probably require a pay cut.
Your reasons for switching careers can help you determine whether or not the pay cut is worth it: if you are switching to a career that pays less but has a better chance of quick promotion, then the pay cut might be completely worth it. If you’re switching careers because you got laid off or just can’t find a job in your field, then a new career that pays less is certainly better than no job at all.
5. You’re ready for a move
If you need or want to move to another state or city, you might need to take a job that pays less than your previous job in order to get your foot in the door. It’s important to remember that the cost of living is different depending on where you live, so you actually might not be taking a significant hit if you take a pay cut but move to a more affordable place to live. You also can save money by walking, biking, taking the bus, or having a shorter driving commute, so if any of these money savers are possibilities when you move, you need to factor that in as well.
Even if you do have to take a pay cut and it’s significant, if you really want to move, it still might be worth the cut. Particularly if you were making a lot of money before, you might be just fine financially with a pay cut. If not, you can make lifestyle changes in order to make the move you want to.
There are many other reasons to consider a pay cut, including getting away from a boss you hate, or having more time with family or more time to do the things you love outside of work. You have to weigh the pros and cons and decide if the money, or the new circumstances, are more important to you.