For many who work hard and run a household on a scale with their earnings level, having to face a sudden salary cut can be psychologically damaging. During the recent Global Financial Crisis, many employees found themselves looking at lower wages if they wanted to keep their jobs. There are other reasons that people may suddenly have to look at tightening the household budget. An accident, for example, may significantly impair your earning capacity. Having to deal with a sudden cut in income at a time when you’re also undergoing costly medical treatments can be extremely stressful. In this instance, it is best to contact professionals such as Sinnamon Lawyers , who are experts in personal injury. For more ideas and inspiration to get you through this difficult time, check out the points below.
You Are Not Your Payslip
For many breadwinners, their self worth is directly tied in to what they earn. This is why pay cuts often have such a damaging effect on a person’s morale and general emotional wellbeing. While most of you know you’re wonderful, truly valuable human beings, and this has nothing to do with how much you do (or don’t) get paid, it’s not so easy to convince yourself of this when the bills come in and you see your family struggling to maintain a lifestyle that they used to enjoy with ease. If you’re struggling with this kind of acceptance, it’s advisable to seek some counselling or therapy that will help you through those tough moments.
Spend Less – And Save More
This common sense advice isn’t as easy to implement as it sounds. Spending habits are just that – habits. Habits you’ve developed over the years when you were used to a certain amount of money coming in. It’s important to sit down and work out a sensible budget for your household as soon as possible, before expenses get away from you. It’s also important to communicate the new state of play to your family. Having a plan in place to handle the situation (i.e. your budget) will help make such an announcement less scary for children. The more funds you can save, the more you will have on hand to reduce any debt, and also to cover any unexpected contingencies. In addition, if your salary cut is due to a workplace injury, having additional funds to pursue a claim for compensation will serve you well.
It’s important to keep your perspective. While a salary cut isn’t pleasant, it need not be the end of the world. You can use the situation to take stock of your finances; you may find that when your income level rises again, your entire household has learned something about managing money, and as a result, you have more left in the tank at the end of each pay cycle. Perhaps the annual family vacation can be five star instead of three, or you may be able to look at investing any additional savings.
Have you ever had to deal with a salary cut, for any reason? Let us know how you’ve been affected by a drop in income by telling your story in the comments box below.