Day 26 of 33 Days And 33 Ways To Save Money And Reduce Debt: Give Yourself A (Pretend) Pay Cut
Day 26: Give Yourself A (Pretend) Pay Cut
What would happen if your boss came into your office tomorrow morning, and told you that your salary had been reduced by 15%? Furthermore, what if he told you that a new law had been passed and you couldn’t change jobs for one full year – and you couldn’t borrow any money, for any reason?
What would you do? You would probably freak out – then go home and tell your family – and then you would sit down and figure out what to do. You would begin to examine your spending habits – and you would force yourself to make some changes. In a year’s time, you would still be alive, and somehow you would have managed to live on 85% of your original salary. You might have had to give up some of your favorite things – going to the movies, eating out, taking vacations – but you would have survived.
But, we all know that your boss (more than likely) isn’t going to come into your office in the morning and tell you those things. Nope, you’re life will go on, much like it has for the past few months – you’ll make the same salary, you’ll be able to borrow money, and you will be free to look for a new job. But, what if you decided to make the spending changes anyway? What if you decided, today, to live on 85% of your salary? or 75%? or 98%,? or even 60%? What if you went crazy and “gave yourself a pay cut”. Not a real pay cut, mind you, but a pretend one. What if you decided to live on 85% of your salary, instead of 100%?
Sit down with your spouse and discuss what the two of you might do if household income were decreased by, say, 15%. Then, go out and do HALF of those things – and I’ll bet you’ll be amazed at how quickly you can reduce you debt and save money. It is amazing how much money we spend on things that are “unnecessary”. Most of us, if we would focus on the truly necessary things, could fully fund our retirement accounts, live debt free, and enjoy abundant lives.
If you have voluntarily “down-shifted” – given yourself a pretend pay cut – leave a comment. Or perhaps you’ve given yourself a ‘real’ pay cut – left a job that you didn’t like for a lower paying job that you love – leave a comment and let us know about the changes you’ve made.
(Final note: I realize that many of the folks who read my blog find themselves in difficult financial situations. Some of you have lost your jobs – due to downsizing, health issues, or disability. I further realize that many of you have already made tremendous cuts in your budgets and that you can’t “squeeze blood from a turnip”. The inspiration for this post comes from the lady I saw at the grocery store, who was complaining that her credit card was maxed out, as she’s getting into her brand new Lincoln Navigator. There is a difference between “voluntary simplicity” and “involuntary unemployment” – and I truly sympathize with those who are struggling to make ends meet.)