Pay Cut at Work? How to Make Do with a Smaller Salary
These are tough economic times, and it only seems to be getting tougher. It’s hard enough keeping up with inflation as it is, but now that you’ve had to take a reduction in pay, what are you supposed to do? Below are three tips to help you make do with a smaller salary.
Cut Unnecessary Spending
The first thing you should do is pick up some quick wins by cutting out unnecessary expenses. That might include things like subscriptions to magazines and movie streaming apps. You can still catch a lot of good shows on YouTube, and there are endless blogs and online magazines that you can read for free.
Eating out might have to happen a little less often. But you can lessen the blow by downloading apps for every restaurant, bar, cafe and fast food joint in your town. Those apps give you tons of freebies and discounts, so you might not have to cut back as much as you might think.
If you spend a lot of time at the mall every month, you should probably look at cutting back there too. If you’re used to shopping at high-end department stores and specialty shops, you might be surprised at the quality you can find at stores like TJ Maxx, Ross, Gap and Marshalls.
And if that doesn’t get your spending down far enough, you can hit the Goodwill and second-hand stores or even shop around on eBay for good deals.
Reduce Your Utility Bills
Utility bills are next on your list. Start by calling up your electric, water, cable, internet and cell phone providers. Explain your salary cut and ask if they have any packages or programs that can help you reduce your monthly bills.
Next, look for ways to reduce your monthly usage. You can install low-flow water faucets and a tankless water heater to easily reduce your water usage without even trying.
Electric bills are easy to lower too. Start by using power strips for your electronics that you can turn off when those devices are not in use. This reduces phantom loads and can make a significant reduction throughout the course of the month.
Build an Additional Income Stream
Cutting expenses isn’t the only way to live on a smaller salary. You can also increase your monthly cash flow by building multiple streams of income. That way, you might not even have to lower your standard of living.
Investing in stocks and mutual funds is one way to bring in some additional income throughout the year. You don’t even have to lift a finger. Just buy and hold, and then you can deposit the dividends to your checking account to help pay the bills.
Be sure to diversify across different sectors and even different countries. That way, if one sector takes a loss, you might still make a profit due to other sectors or regions showing growth.
If you’d rather invest time than spend a lot of money on an income stream, then you might try building a side business with low overhead. You can start a blog for just a few dollars per month.
Social media accounts and YouTube are free to join and use. Once you build up an audience, there are lots of companies that will pay you for sponsored posts.
Taking a hit in your salary doesn’t necessarily have to overturn your whole world. Follow these steps to reduce your monthly spending, save money on everyday purchases and recurring expenses and increase your income with a side hustle or by investing.
Category: Family Finances
