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The pandemic has upended millions of American lives, and for many has made them reconsider priorities around work.
That’s prompted many to quit jobs amid the so-called Great Resignation. In November, a record 4.5 million workers left their jobs, according to data from the Labor Department.
There are also signs that people are open to shifting careers for jobs that better fit their new pandemic normal. About two-thirds of working adults said that work-life balance is more important to them than having a higher salary, according to KeyBank’s 2022 financial mobility survey.
The survey also found that many Americans’ priorities shifted to include more time with friends and family.
“If you know a bigger paycheck is no longer your priority and spending time with family and friends is, there’s probably going to be some financial ramifications,” said Mitch Kime, head of consumer lending and payments at KeyBank. “That’s okay.”
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Another survey of workers from Paro, which provides accounting and finance solutions for businesses, focused on those who think for a living – such as programmers, pharmacists and lawyers. The survey found the group also prioritized their work-life balance over making more money.
Some may also consider taking a pay cut to have a better balance between work and life, or to change careers to something more meaningful.
“The pandemic and experiences they have had have shifted their values,” said Anita Samojednik, CEO of Paro. “Right now, the salary is just not enough.”
What to consider
Of course, taking a pay cut will directly affect your finances and may not be advisable right away, according to Tania Brown, an Atlanta-based certified financial planner and founder of FinanciallyConfidentMom.com.
If you’re considering taking a job where you will make less money, there are a few things you need to consider before you make any moves, she said.
The first thing is to ask yourself why you want to leave your current job. Are you burned out? Will a different job or career be more fulfilling? Are you planning to move?
Doing this ensures you don’t make a rash decision you’ll later regret, said Brown.
“Emotions have no logic, and you’re trying to make a math decision based on emotion,” said Brown. “It’s just not going to turn out.”
If you’re only a few months from paying off debts or hitting another financial goal, you may want to hold off.
Plus, you may realize you don’t want to leave your job, but instead would like more flexibility or a change in your role. If this is the case, now is a great time to ask for a different schedule, to take on different responsibilities or introduce other flexibility into your job, said Samojednik.
“There is a lot more flexibility,” she said. She added that she’s seen many people dip their toes into freelancing in addition to a full-time job to test the waters of a new gig or becoming their own boss.
The math
But, if you discover that switching jobs is truly what you want, then you have some important math to do, said Brown.
This includes looking at your current budget and financial goals and seeing if you can still make them work on a smaller income.
If you will need to trim your budget, Brown suggests living as though you’ve already taken the pay cut for a few months to see how it works out. It will give you a test-run of what life will be like with a smaller salary and help you decide if a pay cut is truly what you want.
You should also think about how making less will impact your long-term goals, said Brown. If you’re saving up for a house or plan on having a baby, how will your new income change the timelines on those milestones? If it will take longer, is it worth it to you to wait?
If you’re part of a family, you should also consult the other members in your household. That means talking with your spouse and children about what changes would take place, such as fewer trips or less money for extra activities, and deciding if it works for everyone.
“This has to be a family decision because your decision is impacting everyone in the household,” said Brown.
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