How to Deal With Pay Cuts

As an employee, you depend on your salary or hourly wage to pay your bills, buy groceries and pay for discretionary expenses. Taking a pay cut at work can diminish your ability to make ends meet and save for emergency and retirement expenses. However, if your employer experiences financial difficulties, you may have to take a pay cut to keep your job. If this happens, you can employ simple strategies to help ease the financial impact of a reduction in pay.

Instructions

1. Obtain a part-time job to deal with income loss caused by a pay cut. Restaurants, coffee shops, convenience stores and retail shops commonly hire part-time workers and may offer flexible hours to work around your full-time job. However, if you have young children, you will need to work with your spouse or partner to make sure the children are cared for.

2. Reduce entertainment spending to offset your loss of income. Instead of taking the family to a movie theater, rent a movie and make popcorn at home. Opt for a road trip to nearby attractions instead of taking an extended vacation.

3. Save money by opting for public transportation instead of driving to work or to run errands. Taking a bus or subway can cut down on fuel costs and vehicle maintenance, which can reduce the impact of a reduction in pay.

4. Start a side business, such as lawn mowing, landscaping, house painting or computer repair to replace your lost income. These side businesses typically require few start-up costs aside from initial equipment and supply purchases. They can also allow schedule flexibility so you can work around your full-time job.

5. Use the Internet as a means of making extra income without having to leave your home. For example, you can make money online by selling items on Internet auction sites, adding affiliate ads on a blog or selling artwork or craft items on your website.

6. Offer freelancing services online. You can earn money on a freelance basis coding websites or smartphone applications, writing, designing websites, selling digital images or providing virtual administrative services.

Tips & Warnings

• Track your income if you freelance, start a side business or make money online. You will need to report and pay taxes on this income, since no taxes are deducted from these earnings.

References

• "Weekend Entrepreneur"; Michelle Anton, et al.; 2006
• "365 Ways to Live Cheap"; Trent Hamm; 2008
• "The Little Book of Big Savings"; Ellie Kay; 2009