The Pay Cut Pandemic
The Pay Cut Pandemic
Who would’ve ever thought that we would be in the midst of two pandemics – a cause and effect. People have lost their jobs, homes, and sanity. But most importantly, people have lost their lives. Welcome to the pay cut pandemic.
The word “essential” has not been thrown around much until 2020, mostly from employers reminding you how you are essential to their business model (as a number) without taking into consideration individual lives. However, the very essence of essentialism comes first before other aspects of being essential to someone else would matter. What does essentialism have to do with finance, you ask? Everything. Money is essential to a comfortable life. No one knows how to live in a world that survives on money, without money. Our government and our healthcare system runs on money, not just good intentions.
A pay cut throws the equilibrium off of everything – your salary, retirement accounts, budgeting, etc. This pay cut pandemic caused healthcare premiums to rise and salaries to fall. Because the system is setup this way, not having money means that you could lose out on treatment that you need to survive, which is a hamartia in our society.
Below I’ve comprised a list of 4 things to do after receiving a pay cut:
No Spend Months
When you receive a pay cut, you have now switched to survival mode (like in Minecraft). Your spending habits need to change. You need to adjust your spending to reflect a pay cut and have no spend days and/or months. You should only be paying for essentials which are easier to track when they are automated. This is only temporary and not a permanent solution. You are not meant to survive indefinitely in survival mode.
Take Advantage of Government Benefits
Due to being laid off from a global pandemic which naturally causes a lot of stress and uncertainty, you may be entitled to receive unemployment benefits. I would recommend using this time to search for another job; not a mini vacation. I advice utilizing this benefit for assistance when needed but not abusing it. You can lose your skillset or have a gap in your resume if this assistance is needlessly prolonged. This benefit is in place to ease the stress you receive after a pay cut or a job loss while you search for another job. Contact your state’s unemployment program for more information about if you quality.
Job Hunt
Some people received a temporary pay cut with a (potential) deadline to when their salary would be back to normal. If you want to wait out a temporary pay cut, that is your choice. Some people were not given this option. Also, because of a pay cut some people may not be able to provide for their families. If you don’t like the hand you’ve been dealt with, rather than complain you can remove yourself from that situation (if possible). If you die tomorrow your employer will just replace you; they owe you nothing…but that works both ways. Sure you may be replaceable to them, but you are not replaceable.
Yes, you could receive a pay cut with any company you work for if the circumstances are right but this lessens the chance with well established businesses who have more financial reserves. Even businesses did not plan for a pandemic to hit them this hard. This is where personal finance shifts to just overall finance.
If you have no prospect of going back to your previous job, start searching for a new one. This could very well be your opportunity to branch out into a new field or find that job that allows you to work from home if that’s always been a goal of yours for better work-life balance. A job is better than no job which can keep you afloat until you land something better or more aligned with your skills.
Adjust Your Budget
Your budget now needs to match your life. This requires acknowledging the difference between necessities and luxuries. Personal finance is not stagnant. Even if this change is not permanent, your budget needs to be as realistic as possible and it needs to reflect expenses that are essential to life. This is why it is important to live below your means. This may very well be your introduction to a minimalistic lifestyle. Remember, this situation although temporary is figureoutable.