We’re all about making your case for a pay rise, but there are a few select circumstances in which taking a pay cut can be a good move. Of course you’ll need to tighten that currently comfortable belt a notch, but it can certainly be worth the squirm.
To give you some clarity and confidence in the decision to throw in your current job for a lower paying life, here are six instances where it could be worth taking a pay cut.
Better work-life balance
Plenty of people decide to leave the hustle and bustle of the corporate world for a better work-life balance. This decision is all about what you value, because cutting down hours or shifting to a cruisey job will usually result in a decrease in pay.
So if working 80 hours a week for big bucks has you questioning your decisions, remember that achieving a healthy balance comes from identifying what’s most important to you and implementing strategies to achieve it.
And those strategies might just involve a pay cut.
Your dream job pays less
Being stuck in a stressful or dead-end job you hate will eventually lead to frustration or burnout. Whether it’s a career change, going back to study or a complete change in industry, following your dream will often result in a pay cut.
A PwC study found that on average, Australian employees are willing to give up 11 per cent of their wage for their dream job. The consensus is that if you’re doing something you love, money simply isn’t as important.
Going back to study
One of the most common reasons for taking a pay cut is going back to study. Whether it’s full-time or part-time study, you won’t be able to work the hours you used to and this means a hit to salary.
There’s a reason students live on two minute noodles, so be willing to sacrifice some of the money you’ve become accustomed to in pursuit of hitting the books.
To start your own business
Many people quit their nine to five jobs to pursue the dream of working for themselves. While the risks of starting a business are high, the rewards can be great. But it also means giving up regular, reliable income, at least at the beginning.
A popular option is to keep working, then gradually move to part-time work until the business is providing enough of an income to support you. Either way, there’s usually a thin stint in there somewhere.
It’s time to adventure elsewhere
Whether it’s moving interstate or abroad, a change of scenery is one reason that can justify taking a pay cut.
Relocating to another country means there’s a whole new world of experiences, culture and lifestyle. And if you’re getting paid in a foreign currency it’s possible a pay cut is going to be part of your new experience too.
Just remember to consider cost of living and expenses before packing those bags.
To take advantage of other perks
Whether it’s being able to walk to work, having more holiday time or the use of a company car, there are lots of other benefits to consider besides cold hard cash. And often it’s these incentives that motivate people to take a lower-paying job.
So even if your salary is reduced on paper, there are other perks to think about. And in the end, you could even be better off.