6 Ways to Survive a Pay Cut

Taking a pay cut may seem counterintuitive when you decide to make a career move. However, there are more considerations in your professional life than just a salary. Maybe you decide on a new direction for your career, or you move to a new location to be closer to family. Perhaps a work-life balance is more important later in life. Whatever your reasons, here are six practical tips for when you voluntarily make less money.

1. Redo Your Budget

The first step when you take a pay cut is to redo your budget immediately. Determine what you can and cannot live without. Examine what you can cut right away, such as eating out, going out with friends on the weekends or all those premium sports channels on your television. The sooner you start cutting your budget, the easier your reduction in pay becomes.

2. Get Rid of Bad Habits

Have you ever made it a new year's resolution to quit smoking, stop drinking or eliminate those weekend shopping sprees? A pay cut brings bad habits into focus. Get rid of those vices as soon as possible to save some cash immediately and over the long term. When you get back to your previous salary level, you may not even notice that your bad habits are gone and you can live without them.

3. Shop Smarter

Learn to shop smarter, which means clipping coupons, buying in bulk where appropriate and watching for sales. Look for budget supermarkets, buy store brands rather than national brands and purchase fresh foods in season. In addition, there are plenty of online deals and specials to download to your smartphone from the internet.

4. Cook More

Since you're shopping smarter, it also makes sense to cook more at home in the midst of your pay cut. This especially rings true if you're spending more time at home while telecommuting as you work to achieve a better work-life balance. Cooking bulk meals in advance saves time later in the day whether you cook for one or for 10. Cooking food at home and in bulk lets you examine how to use what's in your pantry, and you get to eat leftovers for a few days after the fact.

5. Save a Little

Saving money for emergencies is always a good thing, but when you take a pay cut, saving may turn into a luxury. Save when you can and what you can. Instead of setting aside $20 per month, see if you can put $5 per month into a savings account. Save money at the end of the month with what you have left over after you pay your bills and a few days before your next payday.

6. Pick Up Extra Work

Thanks to technology, there are tons of opportunities to pick up extra work through telecommuting, freelancing and part-time contract work. If you have evenings off, consider earning some extra cash as a tutor, online seller, virtual assistant or writer. There is plenty of work for talented people who need part-time gigs.

A pay cut does not have to be a bad thing. In fact, it can help you eschew the things you really don't need and focus your efforts on who and what matters the most to you.

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