If your employer came to you and said, “In exchange for a 20% pay cut, you can work from home,” would you do it?
If your employer suggested that, for an 18% cut in pay, you only had to be in the office one day a week and could work your other 32 hours a week at your convenience, would you do it?
If your employer said that you could have six weeks of vacation a year, no questions asked, in exchange for a 15% cut in your annual salary, would you do it?
If your boss came to you and said, “I’ll move you into a department where everyone is incredibly nice, there’s no backstabbing, and everyone pulls their weight on projects. The only catch is that your income has to go down 15%.” Would you get on board?
Some people would jump immediately at these offers. Other people would shake their head no. Why? It’s because these kinds of benefits are incredibly hard to calculate directly into dollars and cents. They have different values for different people.
So often, I’ll hear from readers who have been offered a promotion with a nice raise, but that promotion means leaving the department they’re working in and losing some of the scheduling flexibility that they currently have. They won’t be able to conveniently pick up their child from daycare each day, but they’ll be making 30% more. Is it worth it?
Others will get a great job offer with another company with a nice increase in salary, but they’re already working in an office where they like everyone and office politics and backstabbing are almost nonexistent. Is a 25% increase in salary worth jumping into an unknown office environment when you’re in a good one?
These are tough questions to answer.
In 2008, I faced this issue head-on. I was in a position where I could make the leap to writing full time, but my income level would drop by about 50%. I would no longer have to go into the office. My hours would be extremely flexible. When my children were sick, I could be there for them without having to skip a beat.
I chose the lower pay and flexible hours. To me, that’s how valuable the additional time and flexibility with my children really was.
Of course, I spent a lot of time thinking about that transition. Here are some of the questions I really chewed on during that process. Perhaps these questions will help you make the right decision.
In terms of my personal life, what is the real difference between the “good” position and the “bad” position? In other words, what do the good benefits give me that I wouldn’t get from the other position?
In my own situation, the biggest change was really the flexibility in hours, which enabled me to easily stay home with a sick child, take an afternoon off to help with a field trip or a play, or take advantage of other opportunities that might pop up. Other, less significant advantages included a minimization/elimination of work-related travel and a reduction in stress level.
What would I really do with that extra income? One of the jobs would earn you a higher salary. What would you really do with that money?
In my case, I was actually using almost all of that money for debt repayment. In early 2008, we were just tearing through our mortgage, which was our only outstanding debt at the time.
What do I actually give up at the lower salary? If you’re looking at a lower paying option, what do you really lose by taking it?
Our main sacrifice was simply slowing down our mortgage payments to a much slower rate. We were still able to put more toward the mortgage each month than the bill asked us to, but it wasn’t the huge amount we were able to put towards it. It pushed off our mortgage payoff by several years.
What are my long-term goals? Which ones are the most important to me? When you think about your life in five years, are you thinking about the career pinnacles you’ve achieved? Are you thinking about your family? Are you thinking about the new career you’ve built? Which of your long-term goals really drives you more than any other. If you’re undecided as to which path to follow, go for the one that maximizes the goal that’s most important to you.
For me, it was really all about the children. The last thing on earth I wanted to be was an absent father, and I feared that I was becoming one. My primary goal in my life was – and still is – to be the best possible father and husband I can be. When I truly realized that, the decision became much easier.
That’s not to say that my goal is right and other goals are wrong. Different people value different things and are driven by different things. You might be very passionate about parenthood, but when you get out of bed in the morning, you’re drawn to your career (or the new one you’re trying to build).
In my eyes, if the finances work, you should always choose the path that takes you toward your biggest goals in life, whatever they may be.