Should I Take a Pay Cut to Reduce Stress?
If you find yourself stressing out about work more frequently or daydreaming about a different kind of life, you might consider making a change. This change might involve adventuring into a new industry via an entry-level position, shifting from full-time to freelance work, or moving to a different part of the country. In some cases, leaving your current job in search of a better quality of life may bring you to ask, "Should I take a pay cut?"
While this proposition may seem daunting at first, taking a pay cut may be worthwhile if it means getting closer to the "good life" you've always dreamed of. Here are some factors to take into consideration and questions to ask yourself along the way.
What Are Your Values?
Assess your current and future goals honestly. Will a pay cut prevent you from achieving these goals or bring you closer to living your ideal life?
For example, if a thriving family life is your number one priority, you might want to move back to a smaller town where you can spend more time with relatives. Deciding to work remotely will also allow you to spend more quality time with family. Free time is crucial to your personal well-being. If a work-life balance isn't attainable with your current role, a more low-profile position with lower pay might do the trick.
However, if your immediate and long-term goals revolve around paying off your student loan debt and purchasing a home, a pay cut might not be worth it. Ensure that your decision to take a pay cut is not motivated by fear or hopelessness. It should act as a strategic move toward a better life.
The Impact of Workplace Stress
The long-term effects of workplace stress are often underestimated. Chronic stress is grueling both psychologically and physically. It can make you more vulnerable to illness, infection, depression, and even serious health problems down the line. Job quality, in particular, is a solid predictor of your overall feeling of well-being and how you perceive your quality of life.
A recent study suggests that those who value their time and job quality — which includes all of the non-monetary aspects of a job, like flexible hours, consistency, fulfillment, and camaraderie with coworkers and managers — over salary alone are happier overall. So if you can work fewer or better hours, shift into a more flexible schedule, or find a work environment that is better suited to your personality without sacrificing your financial health, it's often worth it.
Finding Your Dream Job
Another reason you may decide to take a pay cut is to start working toward your dream job. While the financial aspects of a job, like salary, benefits, and other perks, are crucial sometimes an opportunity presents itself and you'll want to find out where that path leads to.
For example, one common reason for taking a pay cut is to make a major career change. Maybe you took your current job just out of college, but you've always wanted to work in a different industry. Or maybe you've been doing some soul-searching and you're ready to start that small business you've always dreamed of.
After giving it some thought, determine whether it's the right time to chase that dream job that you've been thinking about.
Should I Take a Pay Cut? How to Prepare
If you're truly ready to take a pay cut, there are a few things to keep in mind as you prepare to embark on your new journey. First, make sure you're financially ready to take on some risk. If you're saddled with heavy debt, it may not the right time for a pay cut.
Secondly, make sure you're not jumping straight into a financial void. Instead, take the time to prepare your safety net before you make the leap. Work on creating and marketing your dream small business part-time while you still have a steady income, or wait for an official job offer before you make the switch.
Lastly, a new income means a new personal budget. Prepare your budget carefully and take a good, hard look at the numbers before you make the ultimate decision to take a pay cut. The last thing you want to do is trade one kind of stress for another. But if you prepare effectively, there's no reason you can't manage a cut in pay and improve your life in the process.