Remember that friend I wrote about a little while back? The one who kept making excuses about why she couldn’t change her situation? Well, she did it. She put in her notice and started her new job a few weeks ago. The catch? She took a 30% pay cut.
She called me several times as she was in the process of making this decision, wondering whether or not she could go through with it. The lower salary was a hard pill for her to swallow, especially when it was a battle just to get her bottom line at the new firm. Not to mention that after she put in her notice, her managers basically said they would give her whatever she wanted if she stayed.
I fully admit that this is a hard place to be. But every time she called, I gently reminded her what a hard place her current position had been for the past 1.5 years.
“Is the money worth the stress you’ve been going through?” I asked her. “And how much more will they expect of you if you stay after all the additional raises, bonuses and promotion they give you?”
This is key for anyone contemplating a risk: is the cost of your current situation worth it? If the answer is yes, then stay where you are and own it. But if the answer is no, then I’m sorry, quit your bitching and DO SOMETHING already.
Yeah, I put up with my friend’s pseudo-bitching, but do you know why? Because it wasn’t really bitching; she was processing HOW to change her situation. She needed to talk through the fear and self-doubt. She needed someone to tell her that she could do it and that the world wouldn’t end if she gave up her salary. We talked through several worst-case scenarios:
- If you hate the new job and decide to quit, then what?
- If you quit after 6 or even 3 months and were unemployed for however long it took you to find a new job, then what?
- If you started the new job and realized you’d rather have the old job back, then what?
With each of these scenarios, we talked about how things wouldn’t be so bad. If she decided to quit, she could use the time to figure out what to do next. If she were unemployed until she found a new job, her husband’s salary could support them both. If she really wanted her old job back, she could probably get it.
Still, she kept looking at her salary cut as a loss, which it is, technically. But it’s all about perspective. Is your current situation worth your cost? For my friend, her cost was the stress and frustration of dealing with coworkers who didn’t do their part of the job (or didn’t do it well), of 60-hour work weeks, constant travel and poor management.
On top of that, she does still want to go into business for herself someday, and pursing the training needed to do that wasn’t happening. The former position also didn’t give her necessary experience for her personal business. And any business requires capital to get started, right? Either you apply for a business loan or you bootstrap. Either way, it’s a negative on the balance sheet for a good three years.
So we talked through a paradigm shift: instead of focusing on the loss, I tried to help her look at the so-called loss as the cost of her long-term goals and suggested that she think of that 30% as the capital investment in herself and her future business.
Is it risky to take a 30% pay cut? Absolutely. Will it be uncomfortable? Probably. But in the end, the paradigm shift is learning to look at risk from a different point of view by evaluating your potential gain to determine if it’s greater than your perceived loss.
What about you — what paradigm shift do you need to make to get one step closer to the life you really want to live?