How to Survive a Pay Cut, Part I

Given the current economy, you may someday find yourself facing the harsh reality of a pay cut. Do you know how to respond?

Nobody wants to have to accept a pay cut, but it’s a lot better to have your salary slashed than to get a pink slip. And in these uncertain times, you may someday have to face such a depressing reality… assuming you haven’t already.

Fortunately, going into belt-tightening mode should be easier for you than for most people, since you’re already a seasoned savvy consumer. Even so, let’s take a look at a few places where you can shave a few cents off your budget here and there.

The Basics

You can almost always save money on the basics of life, if you’re willing to be ruthless about it — as you have to be when your income shrinks. So tighten the screws a bit further. If you’re not doing it already, start buying the store brands of all your grocery staples (although they don’t taste as good, do they?).

Forget about pricy foods like steak for a while, and stop going out to eat except for special events. Even when you do eat out, be stingy about things like tips and parking.

Turn your thermostat down in the winter and up in the summer, and do everything else you can think of to save money on energy. Furthermore, wait until you have full loads to run the dishwasher or clothes washer, and consider hanging your wet clothes up to dry.

If you or the kids need new clothes or shoes, go to Wal-Mart or a similar discount store if they absolutely must be new; otherwise, shop the thrift stores, and hit the occasional garage sale.

You get the picture. For a while at least, you’ll need to sacrifice comfort for savings. Thank goodness air is still free, right?

The Extras

It goes without saying that entertainment will take a hit if you’re stuck with a salary cut. But really, any extras are going to have to go, even the miscellaneous stuff you don’t really think about much: a magazine or book here, a run to RedBox there, that daily Venti Mocha at Starbucks, the works.

Stop and think before you just blithely buy something you didn’t have to worry about before, and then be draconian about controlling your spending urges. And clamp down on your vices, too. Even if your “vice” is as simple as a fondness for dark chocolate, tighten up your self control and stop buying so much of it.

Think of it this way: the relative absence will make the heart grow fonder, so your favorite treat will become a true treat again!

To Be Continued in Part ll

We’re just getting started here, so check with us soon for more handy tips on how to survive a pay cut.