There may come a time in your career when you need to consider taking a cut in salary. This could happen during a realignment of work and life priorities – e.g., taking a back seat in the office to get more time with the kids – or if you're making a career change and have to step down to build up experience.
As much as it may pain you to see the reduction in your pay stub, it will likely be worth it in the long run. But first, you have to make it through that transition period. To help you do so, I offer these six practical strategies you can implement immediately:
1. Set New Budgets
Reassess your budgets. How much do you currently spend on different categories each month – e.g., shopping, bills, eating out, hobbies, savings, etc.? After you've worked this out, figure out how much you can realistic spend on each item in your new circumstances. Could you reduce your number of nights out? Could you minimize your TV package or switch energy providers for a better deal? Even small savings across the spectrum can add up and lessen your financial strain.
There are now apps available that can help track your spending and keep it within limits. Otherwise, you can make a good, old-fashioned spreadsheet.
2. Savvy Shopping
Food shopping is often a sizable expense, but it can be curtailed in several ways. Despite being fairly brand-orientated myself, I know that being fussy is not an option when you're facing a salary cut. Changing where you shop or what products you buy can have a huge impact on your weekly spend.
There are some great budget supermarkets and products available, so consider switching to these cheaper alternatives. Perhaps you could buy frozen meat and vegetables rather than fresh? Maybe you can start buying in bulk or sign up to a loyalty program? Another helpful tip is to divide your shopping list into two sections, one for items you need right now and another for products you will need to buy soon. Keep an eye on the second section and strive to pick up these goods when they are on sale, rather than full price, to make your money go further.
3. Cut Out Your Vices
Whether it's smoking, drinking, gambling, or snacking, cutting out your vices will inevitably free up some cash. It will probably benefit your well-being, too.
Consider how eliminating a bad habit you currently have could further you financially. Calculate the daily, weekly, and yearly savings you'll see in order to emphasize the gains and motivate yourself. Research successful techniques you can use to quit. Find a piggy bank you can use to watch the savings grow. Set a date and do it. Times of financial change can also be great catalysts for lifestyle improvements, so make the most of the opportunity.
4. Learn to Cook
Health and fitness have become prominent societal concerns, and the result has been an influx of cheap, fast, and nutritious home-cooking recipes. Start searching the web for inspiration and make your way into the kitchen.
Takeout costs can add up quickly, but it's easy to avoid them. If you prepare your own meals, you won't have to buy lunch every day or dine out frequently.
Consider reserving your Sunday nights for batch-cooking and meal prep. Find ways to store your food to keep it fresh and a radio channel that will get you in the mood to whip up some delicious, cost-effective food. This technique can make a huge difference in your weekly budget, so get cooking!
5. Safe Saving
Saving is a very sensible, commendable act, but only when you can afford to do so. Be realistic and evaluate whether your new financial position will allow you to continue as before. It's far better to adjust how much you put away than run up your credit card or make yourself miserable living on bread and jam.
I generally transfer money into my savings account as soon as I am paid because this is the "safest" time for me to do so, but if you're navigating a period of reduced income, leave it until the end of the month. That way, you'll be able to take care of expenses first and only put away what is leftover. It may not be as much as you were able to accumulate previously, but it will be manageable, and that's what adapting to a salary cut is all about.
6. Pick Up Extra Work
Finally, there may be ways to boost your income through supplementary channels. Could you pick up some freelancing work or tutor during the evenings? Would clearing out the attic and selling stuff online cultivate extra cash? I'm a recruiter, so I could set up a resume-writing service and leverage my expertise in return for a small fee.
Think about how your skills could be turned into a service, your hobby into a business, or your interest into a blog, and then take it from there.
Best of luck with your future career choices! Remember that high salaries aren't the only dream to chase, and surviving a cut may be easier than you think!
Lauren is a recruiter, blogger, and millennial with a marketing degree from the triple-accredited Strathclyde Business School. Follow her on LinkedIn.