Adjusting to a Pay Cut

Last week I wrote about cases where taking a pay cut might make sense. This week I want to give some suggestions for how you can adjust to a decrease in pay. Some pay cuts will require no adjustment, or very little. If you take a pay cut but get a shorter commute, move to a lower cost of living area, or get better/cheaper insurance, you may find that your savings offset the loss in pay. For other types of cuts, you may have to make some adjustments.

First and foremost, if the cut will be voluntary (you’re starting a business, changing careers, or taking a sabbatical, for example) save up as much cash as possible before you make the move. This will give you a reserve to fall back on if t


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