Taking a Pay Cut
You’ve just been offered a position for your dream job. The culture is great, benefits are great, and the overall environment is very welcoming. But there’s just one tiny caveat:
You’ve been offered a salary that’s less than your current position.
Negotiation rounds are over and their best offer is lower than your current job. So what should you do when this happens to you? I experienced this once in my life. The job wasn’t necessarily my dream job per se, rather, the job would’ve given me the opportunity to relocate to California.
But all that I could think about was how I was moving from one expensive city (D.C.) to another (Los Angeles).
If you ever find yourself in a similar position, consider having the following hear-to-heart with yourself and your bank account:
How Much is Rent?
As we enter the fabulous world of adulthood, we’re all told the following:
You should not use an entire check to pay rent
Income should be 3x your rent
But do we all listen to that? Of course not. But for the first time in my life, those two pieces of advice mean something to me.
If your pay cut doesn’t allow you to meet each of the criteria above, then consider looking for a less expensive place to live. If that’s out of the question, then taking a pay cut might not be best for you. I’m solely focusing on rent here because at the end of the day, you’ll need a place to live. All else could be going wrong in your life, however, having a place to lay your head at night is sacred.
Inquire About the Pay Raise Schedule
Most (if not all) companies offer an annual pay raise. Just keep in mind that the key word here is annual. Therefore, it’ll be a while until you see a bump in your paycheck. Consider asking about the percent increase as well. Are there conditions for getting a pay raise? My first job out of college offered an annual pay raise if and only if you accomplished the goals that were set at the start of a new fiscal year. And even so, the percent increase was minor. So minor to the point that when I received my first check after my pay raise, I only noticed a $50 increase in my checks (thank-you, taxes!).
Since promotions are almost never guaranteed, it may be better to use the pay raise schedule to determine if working for less is in your favor. However, be careful not to spend money that you don’t have. I moved into my first apartment under the impression that after a year, I would no longer feel the effect of having a low salary.
I was wrong.
Despite the pay increase that I received, the additional income practically did nothing for me.
Is This a ‘Forever’ Job?
Sometimes, we accept low job offers under the impression that we’ll just 'be there for a year’ or that we’ll ‘take this job until something better comes along’.
Repeat after me: Nothing in life is guaranteed except death and taxes.
My boyfriend always say that and it’s true! We may feel that we can see into the future, however, so much can transpire between now and then. For all you know, you might be stuck at your job due to the inability to find a new job at your preferred speed later down the road (i.e. you thought you’d find a new job in a month but you’re on month 7 with no luck). Or, you may stumble upon a situation where your lower paying job provides you with a flexible work schedule that’s difficult to find elsewhere but is convenient for you because you have time to take care of a family member.
Basically, it’s not hard to become stuck at a job. Although you should remain ambitious when it comes to your job search, you’ll also want to be realistic - because life.
These aren’t the most fun conversations to have with yourself, however, you’ll want to ensure that your current self is setting up your future self for success. Take some time to think things through before accepting a low offer. And if all else fails, apply to another company!