Today we’re going to talk about when it’s okay and when it’s not ok to take a paycut for better work-life balance. I’m going to be sharing with you the 3 reasons to take a paycut and the 3 reasons not to.
Maybe you’re exploring companies online that seem to have a good work-life balance but you’re hesitating on applying because you’re worried they won’t pay enough. I want to start by saying that is likely not an issue...but we’re going to dig in deeper on this throughout the episode
A couple of quick announcements:
What We’re Talking about
- Will I ruin my career if I take a paycut?
- 3 reasons to take a paycut
- 3 reasons you should not take a paycut
Is it okay to take a paycut?
Here are some concerns you may be having:
If I do take a paycut, will it ruin my career long term?
Is work-life balance even possible?
I feel guilty for wanting work-life balance.
I say I don’t care about money but I actually really do. That’s embarrassing.
You need to define what work-life balance means for you.
I had to sort through this in my own career journey when I was leaving the NYSE. I had to define for myself what I wanted work to look like, what I wanted life to look like, and therefore what work-life balance means for me.
I’m not going to give you a hard yes or no answer – like most things in life, it’s nuanced and completely depends on your values, priorities, and goals.
Pull out a piece of paper and define for yourself what work life balance looks like – for you.
|| 3 REASONS IT’S BETTER TO TAKE A PAYCUT ||
If You’re Physically Unwell
When I was in Investment Banking, my body shut down. Truly. The stress was having a physical manifestation in my life. I developed an eating disorder, was exhausted all the time. I look back on that time in my life and I realized how out of whack my priorities were.
We live in a world where for many, Success > Health. I lived with this view. My priorities were out of whack, and I realized I wasn’t well.
When I went to the NYSE I actually took a paycut. I had the same salary but the bonus structure was much much less. In fact, I had to pay back my signing bonus – so I lost money. But in that instance, it was 1000% worth it. Over the next two years I started to slowly build myself back up again. And I am so glad I chose this.
If You’re Making a Career Pivot
When you’re making a career pivot, taking a paycut may very well be part of the pivot. Keep in mind that there is a major difference between changing jobs just to take a new job and a strategic career pivot. If you want more on evaluating/handling the stress of a current job while evaluating a move, you can listen to more here.
I made a career pivot from Finance to sales. I knew I’d make less in the short-term, but I knew in the future I’d make the same or more in this new role.
Your Work Doesn’t Align with your Value System
This can be a major downer – when your work doesn’t align with your values. It is okay to take a paycut if you realize this.
To determine this, you have to know the answer to: What is most important to you? Pull out your journal again and work through this question: Why do you work? You may also ask, What are your top 3 non-negotiables? And if you realize money isn’t the top priority and you honestly mean that, take the paycut.
Some things people realize they value instead of just money
- Being a part of a mission-focused business
- Unlimited vacation, casual dress, maternity leave perks
- Type of team they are on
- Promotion opportunities
Success looks a lot of different ways. We have to unlearn what society taught us as the meaning of success and define our own way of looking at success.
**Note: Just because s company gives great work-life balance benefits DOESN’T automatically mean you have to cut your salary!
|| 3 REASONS WHY YOU SHOULDN’T TAKE A PAYCUT ||
You are aggressively paying off debt
If you are aggressively paying off debt or if you have specific financial goals in mind, and those are a priority, you should probably not take a paycut. I paid all my debt early in my career which allowed me to take riskier financial moves in my career. I’d suggest you pay down debt first before taking a paycut.
Your lifestyle doesn’t support a pay cut
If you can’t afford to pay your bills or keep up with your lifestyle, you either need to alter your lifestyle or not take the paycut.
It’s awful if you take a paycut and can’t support yourself – you’ll be stressed and not perform as well!
No shame if you like nice things and want to keep it that way – just be honest with yourself – it all goes back to those values and priorities.
You’re not 100% sure it’s a better situation
I see it all the time:
- Person interviews with company and thinks they are amazing
- Website advertises health benefits, ping pong tables! Free lunch!
- And then they start working and it's the same hours, just packaged better
You HAVE to do your due diligence on what the company is really like before you accept the offer. Is it truly a better situation? Is it helping you reach your goals?
Companies have WHOLE teams dedicated to employer branding. They may be spending thousands of dollars, sometimes millions, to convince you their company is the best
So I want you to ask hard questions! Go to www.jenaviviano.com/interview-questions for a list of 20 of these questions. I also want you to have clarity going in knowing what you want, your goals and desires, and get clarity on what this company is about.
Is it OK to take a paycut for better work-life balance? Yes and no.
Evaluate what’s important.
See what makes financial sense for you.
Is it Ok to Take a Paycut for Better Work-Life Balance?
October 14, 2020