Cash Rules Everything Around Me
December 23, 2007 8:05 PM   Subscribe

Should I take a job at a company I'd really like to work for if it involves a pay cut?

I've been working at my current job for about 2 years. The environment is stultifying, the majority of the people there are more than double my age (I'm 28), and I'm bunkmates there with a woman who drives me up the wall. It's also in the burbs (I live in the city) and involves driving to work every day. It's the first job I've ever had to drive to, and I've made peace with this out of necessity, but I hate the commute with every fiber of my being and miss taking public transportation to work in the city.

Now I have a tentative offer with another company, one that I would absolutely adore working for (actual industry left out to protect the anonymous - for the sake of this question it could be any industry, really). It's located in the city, produces a product I actually like quite a bit, and is the kind of company I would feel good about working for. The job itself is almost identical to what I do now. The problem? The salary is almost 25% lower than what I'm making now.

The job I have now pays me more than I've ever made before, so I know that I could find a way to make the pay cut work, but I'm having a hard time deciding if it's worth it or not. I'm pretty bad with money (very little savings, tend to spend what I earn and live check to check), and what the pay cut would essentially mean is that I would have to think about money a lot more than I do now. More specifically, I would have significantly less disposable cash for doing all the frivolous things that I love to do: eating out all the time, drinking delicious-but-expensive imported beer at the bar, buying video games and small gadgets, etc. I would still be able to do all these things, but it would all have to be much more calculated.

Should I stay where I am because the money is better or take a pay cut to do essentially the same thing in a "cooler" environment? My biggest fear is that I will take the pay cut, go to the new job, and six months down the road be just as miserable at my new job and 25% more broke. Oh - and unable to drown my sorrows in Fin du Monde. For those of you who have done it, how hard was it to take a significant pay cut, and do you feel like it was worth it?
posted by anonymous to Work & Money (22 answers total) 3 users marked this as a favorite
Enjoyment is more important than money. All the crap you might be buying right now to make up for your less-than-ideal work environment, plus your car maintenance costs, might total way more than the 25% pay cut.

And if, in 6 months, you hate that new job too, guess what? You can begin a job search to move elsewhere. If you're asked why you're leaving after 6 months, say, "Well, there isn't the match in the work environment and my specialties that I thought would be present." Then ask lots of question at that interview to ensure a better fit. It's not like you'll be stuck at this job forever. Jobs are not family. You're allowed to switch.
posted by flibbertigibbet at 8:11 PM on December 23, 2007

Working someplace you like is an investment in your own future. If you have enthusiasm for your job, if you take genuine pleasure in your work, then I can't help but imagine that this will eventually have an effect on your take-home. Not immediately, maybe not at this particular job, but your enthusiasm will open up new opportunities for you.
posted by L. Fitzgerald Sjoberg at 8:12 PM on December 23, 2007

If you really do spend what you earn, then it looks like you will adjust to the pay cut just fine. There's no point in making more money if you're miserable. Not everyone gets this opportunity; take it, take it, take it.
posted by Deathalicious at 8:37 PM on December 23, 2007

I took a 50% pay cut to go to my current job, and I don't regret it for a second. Three years on it's time to move to something more lucrative, but I'm grateful I had the chance to do something I enjoy. Take the new job!
posted by web-goddess at 8:50 PM on December 23, 2007

My partner recently took a pay cut to move away from a bad work environment to a better one. It wasn't as steep as 25%--let me do the math here--it was 15%. Even though we have been dealing with a crisis that has made money tight and landed us in some debt, so it hasn't been the best time in our lives to take a pay cut, it has felt worth it to have him happy to go to his job, enjoying his work, coming home cheerful. It has improved things for our whole family.

I don't know if you've negotiated salary, but he was honest with the new company about the pay cut. He asked for some other concessions, such as starting benefits immediately instead of after 90 days, as they had offered, so we didn't have to pay high premiums under COBRA. He also was able to talk to them about a timetable for raises that, if all goes well, will bring him back up to his former pay after 12 months.

You sound like you're in good shape to take the pay cut--you mention not having savings, but you don't mention having, for instance, a lot of debt to manage. You might have to modify some of your frivolous things; we've had to do that, and we've found that it's a lot easier to do that when we're happy and cheerful, instead of dealing with the fallout from a breadwinner who's unahppy at work. It certainly sounds like you'll be happier in the new job. If you were a friend of mine, I'd tell you to go for it. I'd be amazed if you seriously regretted it.
posted by not that girl at 9:02 PM on December 23, 2007

Been there on this one - Eight years ago, I took a 14% pay hit to leave a job where I, along with everyone else I worked with, was miserable. I went to work for a company that was incredibly well-respected in my city, and in our industry, and was brimming with smart people who had passion about their jobs and what the company did. I have not once regretted taking the pay hit.

Besides, you'll make back more than you think with the non-driving thing. Make sure you tell your car insurance company that you're not commuting in the car anymore - that ought to get you a discount big enough to cover quite a few bottles of Fin du Monde.
posted by deadmessenger at 9:18 PM on December 23, 2007

Do it. I'm taking a pay cut for the job i start on January 7, and I can't wait. Enjoying what you're doing all day should be worth a bit less play money on the weekends. It is for me, anyway. Good luck!
posted by Lucie at 10:05 PM on December 23, 2007

Imagine you've been working for two years at the company in the city, and that you've been made an offer that's 33% higher, but would involve commuting into the burbs and working with older people, one of whom will drive you up the wall (e.g., a company like the one you're with now).

Would you take the job?
posted by dws at 10:16 PM on December 23, 2007

I was offered two jobs out of college. One paid 50% more than the other. I took the one that paid less because it was a more fun, rewarding, and challenging place to work, and I 100% made the right choice. I'm a very happy person about my job, and it sounds like you can be too!

Also, if you enjoy your job more, there's a great chance you'll end up getting promoted to a higher salary over time anyway. Low starting salary doesn't necessarily mean low peak salary.

In summary, DO IT.
posted by JZig at 10:19 PM on December 23, 2007


Chasing a dream job, you sometimes lose. Chasing money, you always lose.
posted by rokusan at 10:21 PM on December 23, 2007 [1 favorite]

I took a 40% cut about 6 months ago for a happier job sans commute and I don't regret it a bit. I had just moved into a more expensive apartment when I got the job offer too, so I was looking at a 50% increase in costs and a 40% cut in income in a very narrow time frame, and it was still worth it. I walk 6 blocks to work instead of driving 36 miles each way. Less gas and smaller insurance payments help offset the pay cut. But what really offset the pay cut is that I love my new job and my friends keep commenting on how much happier I've been since I switched.

Sure, unnecessary expenditures got cut a bit. I don't miss them though, because I'm not trying to compensate for job-induced stress and unhappiness. As long as you can come up with a budget that will allow you to pay all your bills and not cut off all of your extracurricular fun, you'll be fine.

Go for it!
posted by jewishbuddha at 10:39 PM on December 23, 2007 [1 favorite]

First, look over how much money you really need--how much you can expect to pay on all your regular bills, and how much extra disposable cash you'd need to have around to be really comfortable. Be realistic here, and don't try to pretend that you'll be happy with just the bare minimum you need to live. If you'll be stressed about money all the time, even if you technically have enough, then it's not worth doing: money worries can more than outweigh the benefits of having a good job.

However, if (as I suspect) you'll still be able to live comfortably after the pay cut, then you should absolutely go for it. During the week, you spend most of your waking hours at work. Having a job that you enjoy can make an amazing difference to the quality of your whole life. It can do more to make you happy than anything you'd be able to buy with the extra money.

(I recently made a similar decision--technically I didn't take a pay cut, but I did move across the country and to a more expensive area, so it amounts to having less money available. I've never been happier, and for what it's worth, it sounds like you treat money a lot like I do. Incidentally, you might think about making a budget for yourself--even if you don't follow it at all closely, it makes it a bit easier to think about where the money's going.)
posted by moss at 10:45 PM on December 23, 2007

You need a long-term career plan and with priorities and strategies. Only then can you make as perilous a decision as changing jobs for a 25% pay cut, particularly given that now is a bad time to do that in general. (The US economy is in all likelihood headed for some trouble in the next two years and even at a cool company last hired is usually first fired; do you want to be looking for work in the cold of a recession with a bad recent salary history?)

One advantage of a clear plan is that it can help you separate the wheat from the chaffe in terms of your decisions. Commuting is a problem you solve by moving closer to your job, not by moving your job closer to your current home. Working with people twice your age is a plus, not a minus -- more experience from which to learn, more retirements into which to be promoted. Quitting to get away from an annoying roommate yet another cart before the horse.

Only when you dismiss the distractions can you get to the essence: the new company has a stimulating environment (you hope) and a product you like. That's great. If your career plan is to get a PhD in an unrelated subject after a few years, that may be enough. If not, you have to ask yourself: what is it about this job (doing the same work, you say) that makes it worth 25% less to the new company. Is it less strategic important? Just more demand from cool people wanting to work at a cool company? What does that imply about your opportunities for responsibility and challenge going forward (and raises and promotions and job offers from equally cool competitors?)
posted by MattD at 10:50 PM on December 23, 2007

I say go for it.

I took a very big paycut and made what was basically a lateral move for a dream job of mine when I was 27. I was on a trajectory to be very highly paid at the company I was working for at the time, and I was well liked there, but it just wasn't what I wanted to be doing. Most folks thought I was completely bonkers, but it worked out incredibly well for me. Taking a job I really, really wanted made me ecstatic. That company also turned out to produce a hugely successful product, which made my career and earning potential skyrocket beyond what the job I'd previously held could have offered me.

I think following your heart and your passion is much more likely to work out for you in the long run, sometimes even better than you could have dreamed. Even if I hadn't had such an unexpected big success, and if it would have taken me much longer to build my way back up to the pay scale I'd started at, I wouldn't have regretted it for a second.

Sure, you'll have to worry about money more than you do now -- but if you're really, truly happy and comfortable in your job, I'm guessing it won't hurt so bad. Being really happy and excited to work in your job is rare, and it feels a lot better than a few unplanned shopping sprees a month ever could.
posted by pazazygeek at 1:18 AM on December 24, 2007

Go for it, GO FOR IT!

I took a 20% paycut (and left the insane upward curve of tech consulting salaries) to go and do a waaaay cooler job. I left a consulting firm of hundreds of thousands of people right around the world for a six-year-old firm with less than 300 people. But it's just a completely different experience, because I LOVE it, and I really despised a lot about my old job. My quality of life is just so much better I sometimes have to pinch myself.

I don't waste my life in hour, two hour long commutes to out-of-London client sites, or spend more than a few days a year in hotels. I do decent hours, and when I do long hours it's because it's actually required to get a specific thing done, not because of macho presenteeism (who's the first on the team to leave etc etc).

I thought I would miss the cash, and yeah, it's been tight a few times, not least because I was in the middle of helping my now-wife to move to the UK from the US. The extra cash would have been handy. But when I come home, I'm happy. People I know who stayed with my old firm, or moved to other firms for pay rises are earning, oh, I dunno, ten, twenty grand more than me. But I don't care because I'm happy for the first time in my professional life, and I get out of bed wanting to go to work. There's also the big fish, smaller pond thing too - I've gone from third spear carrier in the left to being on first name terms with the senior management, and having a real say and chance to contribute to how the business is run.

Don't hesitate. Go for it. Get an excel spreadsheet and plan your spending, and enjoy your work.
posted by Happy Dave at 2:02 AM on December 24, 2007

Are you spending a lot of your paycheck on things to make you happy because your job makes you miserable?

I know I tend to go "Oh, gosh, I had such a bad day at work -- I need a treat." whenever I'm in a crap job.

If your job makes you happier, you need less extra things to make you happy. So you're saving money there.

Take the job. And that first time you go "I'd never get to do this at my old job," it's more than made up for the paycut.
posted by Katemonkey at 2:58 AM on December 24, 2007

A lot of people above seem to have a reflex "take the job", but recurving needs a lot more thought than that.

First of all: if it's the same job, and it's located in the (presumably more expensive to live in) city, why does it pay 25% less? Maybe there's a better benefit package, or stock options on offer - or maybe the new company follows the tournament model more closely (i.e. rewards are much higher at the top)? These would all be positives - negatives might include if you're going in at the wrong level, or the company is struggling, or if your job has less status where you're going to (e.g. you are a marketeer going to an engineering-led company).

Secondly, and related: in your profession, what is the annual average salary increase? Let's say it's 5%, and that you're currently on $50,000. If you stay in your current job, in 6 years you will be on $67,000. If you move to the new job and take the cut, in 6 years you will be back to where you are today ($50,250). You have to ask whether this is worth the intangible benefits of the move...

Thirdly: what are the intangible benefits of making the move? Will you have more responsibility in the new company? Is the company high growth - and if so, will new people 'slot in' above you (bad) or below you? Will you learn new skills, or get the chance to make new mistakes, and gain experience that way? Is the cooler environment going to raise your self-esteem, which could have all sorts of positive knock-on effects?

Don't get me wrong, I'm not anti-recurving (I did it recently myself), but the pros and cons need to be carefully weighed up.
posted by runkelfinker at 6:14 AM on December 24, 2007

I took a fifty percent pay cut a few years ago to get out of a job I hated and back into academia. Best move I ever made. Based on what you've said, I would do the same in your situation. It depends on your immediate financial needs, though, of course. My life is very frugal, and I have no kids or spouse, so I have a lot of flexibility on that score.
posted by Estragon at 7:02 AM on December 24, 2007

Sounds like it could be a good move but I'd put some work in first. You should definitely do as moss suggests, and sit down to investigate all of your expenses and cut out anything like gym membership you don't need etc. And try to create some sort of a budget for yourself (at least know how much fun money you have left after housing, car, groceries, etc) because if you already live cheque to cheque that 25% pay cut may lead to credit card bills, which would be a world of hell. Also think about negotiating with new company - can they give you more leave or something to make up for the pay cut?
posted by jamesonandwater at 10:09 AM on December 24, 2007

"Follow your bliss."
posted by Taken Outtacontext at 7:47 AM on December 25, 2007

Only then can you make as perilous a decision as changing jobs for a 25% pay cut,
For the hell of it, I jumped on a plane (okay, so I'd purchased it a couple of months in advance, but still...) and flew out to Egypt, with no job lined up and only a glimmer of what I wanted to do in my eye, and even that didn't pan out.

You know what my life has been remarkably free of in the past year or so? Peril.

Well, okay, that is not strictly true. But we'll ignore Cairo traffic for the moment

This guy is 28. He doesn't have a family, and my guess is that the job he's moving to still pays a decent amount. (It's in the same industry, and he's taking a 25% cut. Most low paying jobs are already too low to have that kind of variance in pay, so my guess is he's moving from around 40-60k per year down to 30-45k per year, rather than say 24k down to 18k.) He is going to be just fine. Of course, he doesn't really need to hear this since plenty of other people are telling him to go for it, but I do think some people take wage earning way too seriously. Peril only comes into play if he's taking a lower paying job AND making up for it by selling baking soda to crackheads.
posted by Deathalicious at 6:47 PM on December 25, 2007 [1 favorite]

When I first took what became my current job, it didn't pay *anything*. I was basically doing it in the hopes that it would become my gig, and it did. It's been the best job I've ever had, by far, and eventually became a well-paying one as well.

Now I get to live and work in the city I love, in a line of work I'm passionate about, and as it turns out, the last place I worked has kind of fallen apart and everyone I knew who worked there has left, with various levels of disgruntlement.
posted by anildash at 11:53 AM on December 26, 2007

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