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Should You Take a Pay Cut?

By Melanie Lockert
January 9, 2019

Do you always have the Sunday Scaries before the work week starts? Do you dread Monday morning or let’s face it, every morning during the work week?

Perhaps this means you’re sick of your job and ready to jump ship. Or, maybe you’ve already found what could be a pretty awesome next job. There’s just one catch — the prospective job pays less. You really want to move on but is it a good idea to take a pay cut?

Read on for more information to help you decide whether you should stay or go.

Be honest

First things first: Be honest with yourself. Is this just a rough patch at your job or is it really a bad fit? Everyone has stressful periods at work that can wreak havoc on their lives. Yet, there’s a difference between a rough patch and a bad fit. So which one is it? To find out, start by asking yourself these questions:

  • How long have you been unhappy?
  • Have you spoken up about your needs?
  • Is what (or who) you’re unhappy with fixable?

If you’ve been miserable for more than a few months, your needs are likely not being met and the situation may be unfixable. In this case, it may be best to leave your current job. If you’ve only been unhappy for mere days or a couple of weeks, try having a pow-wow with your boss to see if you can smooth over the situation.

Remember, every job has its own set of issues. It’s all about figuring out what you can handle.

Look at your current expenses

If you’re considering taking a pay cut, it’s key to take a look at your current expenses. Why? Because earning a lower salary will require some changes to your budget.

How much do you spend each month? What expenses can you cut back on or eliminate completely? For example, if your new net salary will be $3,000 per month but your expenses every month are $3,500, you’ve got an issue. You will either need to find a way to cut back by $500 or you just won’t be able to swing it on this new lower salary.

Pro tip: When you review your expenses, look at everything with a fine tooth comb. If you don’t need to spend the money, don’t.

What other perks are on the table?

If you have another offer lined up or are just poking around, see what other perks are on the table. In some cases, these benefits can help offset other costs in your budget.

For example, maybe a new job comes with a free monthly transportation pass which will help you cut down on gas or eliminate the need for you to buy a public transit card. Some companies offer a health and wellness stipend that will cover a gym membership. If you’re lucky, you may even score a student loan reimbursement.

So, take a look at what extra benefits you are offered that can help you stay on budget. From there, you can truly figure out how much your bottom line will be affected by a lower salary.

Look at your health and happiness

In some severe cases, your job is not just miserable or boring, but is wreaking havoc on your health and happiness. If you feel like the stress is too much to bear, maybe a pay cut isn’t so bad. For example, if you can barely get out of bed or are resorting to destructive behaviors just to survive work, take the pay cut.

You only live one life. Being severely unhappy will hurt your mental and physical health. So, take care of yourself!

How to make up for the shortfall

What if you’re determined to make the job leap but you’re still faced with a small shortfall of cash?

Here’s an idea: If there’s a little gap that needs to be covered, take on a side hustle for a couple hours a week. You can do a variety of tasks like babysitting, driving for Uber or Lyft, pet sitting, etc. You can even check out sites like TaskRabbit to do various tasks that align with your skillset. Here’s another thought: You can try raising money by downsizing some of your stuff and selling your items on OfferUp, Craigslist, or Facebook Marketplace.

In addition, here’s our best pro tip: You can use Chime’s get paid early feature to help cover some cash flow issues. And, you can save money automatically by taking advantage of Chime’s round up program. Every time you use your Chime debit card, your transaction amount will be rounded up and that extra cash will be deposited right into your Savings Account.

Just think: Automatically saving, getting paid early, side hustling, and selling your stuff can help you make enough money to take that job you want – pay cut and all. Better yet, these solutions can help free up some mental, physical and emotional energy to pour into your new job and side hustle.

Final word

If you are entertaining a job with lower pay than you currently make, take a look at the big picture. Crunch the numbers, assess your current situation and evaluate your health and happiness.

After you look at all of these factors, you are then in a position to make a responsible and informed decision.

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