You know the old saying, “Money can’t buy happiness?” This might be true for you. Maybe you’re bringing home a healthy paycheck but still find yourself unfulfilled at work. You’ve started fantasizing about pursuing a new career path but recognize your salary might be lower. Then the fear and doubt kick in – are you crazy for considering a pay cut? What will people think when they find out?
If you're unhappy at work and wondering if a pay cut is worth it, here are a few things to consider before you make that leap and decide on a new career.
Stop looking to the past.
You’ve worked hard and put in long hours to get where you are. The idea of making less money feels like several steps backward at this point in your career. But here’s the thing: That’s a sunk cost idea. If your career is no longer serving you, start thinking about whether it will serve you in the future – without factoring in your past. Take the past out of the equation and focus on what isn’t working now. Maybe it’s the hours, the environment, the work itself. Are there any adjustments you can make to serve you better now and in the future? If it’s a new career path with a lower salary, you need to figure out if a pay cut is worth it moving forward regardless of what got you here in the first place.
Start thinking long-term.
If you’re unsure taking a pay cut in the near-term is worth it, start thinking long-term. It’s common to assume that getting paid less means you’ll earn less over the course of your career. But starting at a lower salary when you’re transitioning from an old job into a new career that’s right for you is a common scenario. Ask yourself if your new career path has a higher earning potential in the long run and if you are financially comfortable with stomaching less take-home pay until your paycheck increases.
Factor in the benefits.
We’re conditioned to place a lot of emphasis on our salaries, and some people use money as the deciding factor when trying to find the right career. But are there other benefits you should be considering? Beyond company-provided perks like time off and health insurance, you should check in with yourself to see how a new career would affect your motivation at work, your life outside of work, your relationships, and your overall well-being. You might find that a lower-paying job doing work that makes you happier is the greatest benefit of all. After all, we spend an average of 90,000 hours at work over the course of our careers! Sacrificing some income can be worth it if those hours are spent doing work you’re more passionate about – and if they allow you to find even more fulfillment outside of work.
Weigh money vs. happiness.
Some people are driven by how much money they can earn; others want to have meaningful work and value happiness above all else. Neither opinion is wrong! When considering a pay cut, it’s important to compare how much you value your happiness with how much you value that cushy salary. If you place more emphasis on your salary, explore new opportunities in your current role. What tasks or responsibilities would make you happier without sacrificing any income? If you place a higher value on your happiness, ask yourself how you can manage a smaller salary and still support yourself for now.
Consider other options.
If you can’t (or don’t want to) swallow a pay cut, know that there could be other options you aren’t considering. If you’d prefer to stay in your current career, what can you change about your day-to-day that would make you happier? Could you transition into a similar role? Ask for different projects? If you’re ready to move on, though, is accepting a lower salary the only way out? Is there another route to career fulfillment? Starting a side gig could be a more financially manageable option that lets you explore your passions without giving up your paycheck. As with most things, there usually isn’t one answer!
Taking a pay cut for a more fulfilling career is not a decision to be taken lightly. You’ll need to understand how the change in income could affect your career satisfaction and how your lifestyle would need to be adjusted. But only you can know if it’s the right decision for you and if it will lead to more happiness – or resentment.
Need help making that decision? Book a free consultation to learn how career coaching can help you determine your next steps.