There’s just something truly wonderful about having a salary every couple of weeks, which allows you to afford a comfortable lifestyle and master the art of the perfect work life balance. Unfortunately, it can’t always be a calm sea of bi-weekly paychecks with extra money to burn, though, as strange curveballs occur in business all the time, leading to layoffs and budget cuts. There will likely be a time in your career when your boss breaks the news that your salary is getting cut, and you’ll fly into full-blown stress mode wondering how you’re going to afford everything on a fraction of what you’re used to getting paid.
The most obvious thing to fix this financial emergency would be to start looking for a new job immediately. However, sometimes the job market is slow, or you’re competing for those few and far between dream jobs with 230 other applicants. Sooner than later, reality sets in that you have to make some quick adjustments to stretch your dollars in all the right ways. And we’ve got some tips on doing just that.
Recognize Your Need Versus Your Want Expenses
When faced with a salary cut, take time to organize your finances. Divide your monthly spending into two lists — things you absolutely need to pay for each month like rent, food, transportation, credit card bills, etc. — and things that you want and like spending money on — like meals out, grooming services, clothes, home decor, etc. Add up what you need to spend every month to cover your basics, and, if anything is left over, you can go ahead and decide what you can afford on your want list. However, we recommend that, during this time, you save any extra income for unexpected expenses you wouldn’t be able to cover with your new (smaller) paycheck.
Food For Thought
With a pay cut comes sacrifice; and that means ditching monthly expenses like overpriced cold press juices, lattes everyday or expensive meals out. Shave some spending by checking out your local grocery store for items on special, and plan for meals you can stretch over a period of time that won’t cost you a ton of money or perish within a few days. Coupons can be your best friend while you get back on your financial feet, and it’s smart to buy the maximum amount per coupon if it’s an item you use a lot. If you’re in real dire straights, look into government food stamps, which you may qualify for if your new salary falls within their eligibility.
Cash In Those Cards
This is also a good time to exercise your responsible “adulting” skills. Use all those unused gift cards at places like Target and Amazon to purchase groceries, cleaning supplies and toiletries. Sure, it’s not what you were planning on spending that free money on, but be happy that you have it as a safety net to keep more cash in your account.
Find A Side Gig
Being offered a stellar paying, full-time job within weeks of getting your salary slashed might not work out for most, so start thinking about part-time or weekend jobs that you can pick up after hours. Dog walking, baby-sitting, personal assistant duties and remote work are just a few of many viable options to supplement the money that has temporarily said, “see ya!”
There are also market places like Upwork where contract positions are regularly offered for a wide variety of skillsets, with the majority of jobs being posted for remote workers.
Talk to Your Boss
If you haven’t talked to your boss about what has happened, why it happened, and when things will turn around. Sometimes there are specific metrics your company needs to meet in order to ensure that everyone gets paid, even if it’s just less than everyone else wanted.
One additional thing to note is that lashing out at your boss is probably the worst thing to do. While your boss likely makes more than you, oftentimes managers and executives take the largest salary decreases when companies go through a salary cut. They’re likely hurting too.