Search This Blog

8.02.2011

What Should I Do If I Get A Pay Cut?

Pay cuts are awful. Most people assume that every year they spend on a job will lead to increased earnings. Who hasn't come to expect a 3-5% raise for each year they spend on the job? It's perfectly natural. Even though we all know that we shouldn't be counting our chickens before they hatch, we oftentimes do.

And that's a problem. We tend to think of stagnating wages as the enemy, but a sharp pay cut can be troublesome as well. Whether it be new ownership, poor performance, or a poor economic climate, there are plenty of factors that can cause someone to endure a pay cut. When this happens, you will probably feel the lowest you have ever felt in your life, and you'll have no idea where to go from here.

You might start shopping for a new job, think about quitting, or do both. You might consider protesting the pay cut, pointing to your superior performance in the work place, and demand that your employer reconsider their decision. However, let's say you are stuck with a pay cut--what should you do?

The first thing you should do is make sure you have enough money to cover your basic expenses--gas, mortgage, utilities, and food. If you no longer have enough money to meet these needs, you need to consider severely downsizing your living costs. If you are still earning enough money to meet these financial obligations, you should cut everything else from your life until your once again a secure financial footing. No matter what happens, you should avoid credit card debt at all costs. It will eat you alive. A year or two of pain on a low-income is much preferable to the alternative of jeopardizing yourself for decades to come.

No comments:

Post a Comment

Followers