Any career guru worth their salt will probably advise you to only switch jobs for an upgraded salary. It makes sense; if you’re looking to advance your professional standing, taking a step back is also a step in the wrong direction – usually.
Sometimes, your career leads you to a place where the only way forward is back. This can happen when you’ve maxed out your earning potential in a specific role, but don’t quite have the qualifications or experience to shift to a higher-paying position. Rather than stagnating indefinitely until the perfect opportunity comes along, it can be a smarter move to take a pay cut for a job with greater potential in the long run.
If you’re considering this option, here are some considerations to take into account before making your decision.
What Kind of Opportunities Will You Have?
You have to determine what kinds of opportunities you’ll have in order to decide if a job truly has potential. For example, will you get the chance to network with people across various industries? Will you learn new skills you didn’t have before? Is there a stipend for conferences and continuing education? Most importantly – will this new position allow for upward mobility you didn’t have previously?
These all show that the company truly has the potential to offer you something more in the future, even if it means taking a pay cut now. However, if the job only seems like it’s a step in the right direction with no clear path to advancement, it might not be the great opportunity you’re looking for.
Can You Afford to Take a Pay Cut?
Unfortunately, most of us become used to living on a certain income and may have trouble cutting back. Once you start making $60,000 a year, taking a $45,000 job could require some serious sacrifices.
If you really want the job, look at your budget to determine if your lifestyle can support a pay cut. Think about what you’d be willing to give up for this job, like eating out less or downsizing your apartment. Sometimes, we compensate for a stressful job by treating ourselves more, so a new career might make you less apt to spend money.
Look at the expenses that you can change. Is your lease up soon? Can you refinance your student loans? Can you stop going to that pricey yoga studio? If you’re going to consider a job that pays significantly less, you need to concede some luxuries.
What if you still want the job, but truly can’t afford to live on that salary? First, negotiate with the employer if you already have the offer in hand. They might have wiggle room and could be willing to offer a better deal if they’re aware of your limitations. You can also ask for extra benefits if they don’t have any more money to give you – a few more vacation days or better health insurance options might help ease the salary disparity.
Next, decide if you’d be willing to get a second gig or a side hustle to cover the difference. Driving for Uber a few hours a week or bartending on the weekends could make up the gap. Again, this will depend on your budget, what your new hours will be and if you’ll enough energy to side hustle. Try it out for a few weeks before you quit your current gig in case that’s not something you want to do long-term.
Some people also find they spend less money at a new job if they don’t have to buy nice clothes or go out to lunch often. Make sure to compare the work-related expenses between your new job and your old one, since that difference can easily equal several hundred dollars a month.
Talk to People You Know
Often, I’ve found that the easiest way to solve a career dilemma is by talking to people I know and trust. It’s not that they’ll always have the right answer, but articulating a problem and hearing a different viewpoint can help me figure out what I really want.
Find the people in your life who you admire and trust, then walk through your options with them. Be honest and clear about what you’re leaving behind, what you’ll have to accept in the short term and what you hope for in the future. They can offer some insight you hadn’t thought of and ask questions that help you come to a decision you can live with.
Zina Kumok is a freelance writer specializing in personal finance. A former reporter, she has covered murder trials, the Final Four and everything in between. She has been featured in Lifehacker, DailyWorth and Time. Read about how she paid off $28,000 worth of student loans in three years at Debt Free After Three.