personal finance

What It’s Like to Take a $50K Pay Cut

Photo-Illustration: by The Cut; Photo: Getty Images

We made it through the Great Resignation. We quiet quit. Now, the latest workplace trend might be voluntary pay cuts — people opting for a lower salary in exchange for other, less quantifiable benefits (a more enjoyable job, a better boss, more boundaries). Surveys show that over half of workers would be willing to take a pay cut in exchange for more flexibility to work from home. But it seems as though more people are willing to make less money for other reasons, too. Here, we talked to three women who have chosen to take pay cuts over the past year about why they did it, what it changed, and how it’s going.

Amy, 39, news editor who works remotely from Tennessee

Pay cut: $20K and health-care benefits for her family of four

I’ve worked in publishing for almost 16 years. When the last company I worked for was acquired by a larger one, it became a lot less like magazine publishing and more like corporate media marketing — which is a legitimate business model but definitely not friendly to good journalism. Suddenly, for PR reasons — or so I was told — we couldn’t cover the overturn of Roe in any meaningful way or anything happening in the Middle East. Which would make sense if you’re working for, say, a cookie brand. But we’re a publication that has to cover news. So I was inching toward quitting all year.

I was making about $130K for my base salary. That takes you pretty far in Tennessee, where I’ve lived and worked remotely for about seven years now. But even though I had an excellent annual review, they didn’t give me a raise; they said they’d raise my bonus instead. I was supposed to get a bonus of $20K in March. So it was like this dangling carrot. Who’s going to walk away from $20K? I figured I’d wait for that and then quit.

The other issue is that my whole family is on my corporate health-insurance plan, including my two kids, who are 1 and 8 years old. My husband is a touring musician. So the prospect of finding and paying for health insurance for all of us was not appealing.

Then I ended up quitting in December. I didn’t plan to make a dramatic exit, but it was. Basically, the C-suite and PR teams told me that I had to censor a journalist who was reporting on the effects of racism. That was my final straw. One of my other team members actually quit on the same day.
I didn’t have another job lined up, exactly, but I had a lot of leads, one of which was a contract job that I’m doing now. It’s great and I love it, and they were kind enough to pay me basically my previous salary as a day rate, pretax and obviously minus the bonus. I have to be sure I set aside enough to pay my taxes at the end of the year. But the main issue is that I don’t have benefits.

We got health insurance through our state marketplace that’s pretty affordable: only $280 a month for the four of us. But the deductibles are high and so are the co-pays. I just went to the dermatologist last week, and my co-pay used to be $20 and now it’s $80. I’ve had to stop going to physical therapy, even though I do really need it, because my co-pays were $15 on my old insurance and now they’re $125 per session. My older kid needs braces, and we just got an estimate from the orthodontist with our current shitty insurance, and it’ll be $4,000 for just the expander. So even though it looks like I’m making about the same amount, the health-care costs eat into my paycheck so much that it winds up being much less. And heaven forbid something actually bad happens.

My husband and I joke that we’re on financial lockdown right now. We didn’t have any savings before this, especially since we were sort of banking on my bonus. We each have about $10K in credit-card debt, most of which happened during the month or so that I wasn’t getting a paycheck at all. That makes me uncomfortable because I’ve never had more than $5K on a credit card before. We canceled our spring-break trip, which my son was really sad about, but we explained the situation to him and he understood. He was like, “I don’t want you working somewhere that’s not great.”

I’ve taken on some additional freelance work and cut back on extras. I don’t get my nails done anymore. My younger son goes to a preschool that we pay for, but we’re not getting babysitters or anything. We’re just hunkering down until we can get ourselves out of the money hole. I have my job during the day and then, after my kids go to bed, I do a few more hours of freelance work.

Even though I’m very glad I quit my old job, sometimes I wish I didn’t care so much. It could’ve been so easy to just stay and drink the Kool-Aid. My whole life would probably be easier if I was a more passive person. But this whole thing has also made me reexamine what I actually want. Right now, I don’t have the title or salary or benefits that I spent so many years chasing, always going for the next promotion and the next raise. It’s technically a pretty big demotion. But I’m doing stuff that I like a lot more, and I feel like I’m using my brain and I’m more engaged. So my hope is that my current contract gig turns into a full-time staff role eventually with benefits.

Sandra, 30, associate director at a health-care company in Minnesota

Pay cut: $50K

After I graduated from business school, there was a lot of pressure to get a high-paying, prestigious job. I mean, that’s why you go to business school. So I got a job at a big management-consulting firm. I knew it would be hard, and I figured I would just do it for a few years. But I lasted only one year and I was miserable. The worst part was never knowing where I’d be week after week. The only thing I did know for sure is that I’d be exhausted all the time. There was also this constant threat of being fired. They overhired the year that I started, so they told us that they were going to cut a large percentage of us. But it was performance based, so you had to constantly watch your back.

That said, I was making an insanely good salary: $190K base plus a bonus. That part was great. I didn’t have student loans, but my husband did, and we were able to pay off his debt pretty quickly. We were also able to buy a house in Minnesota before mortgage rates got crazy. But having that mortgage also meant that we were locked in. It wasn’t like we could just move if I lost my job. And the down payment wiped out all our savings, so we didn’t have a big cushion to fall back on at first.

I started in September 2022, and by May I started looking for other jobs. I was applying to anything I could find. And the salaries I was seeing were nowhere near what I was making. I wasn’t expecting to make quite as much, but I asked around and I figured I could make about $150K with my level of experience and qualifications. I was willing to be flexible, and I wasn’t picky. Even still, I got only a few interviews, and the salary ranges were comparatively really low. I interviewed at one place that was looking for someone with an M.B.A. plus five to seven years of finance experience, and the high end of their salary range was $100K. I know that’s a good salary for most people, but for an M.B.A. plus that level of experience in finance? I was floored by that. Another place I looked at topped out at $130K and they didn’t give me a second-round interview. It was pretty demoralizing.

Finally, I got an interview for the role I currently have. I was surprised because I don’t have a background in the health-care field. But then the interview went really well. The job seemed somewhat interesting, and the company has a great reputation. So I was really happy when I got the job offer and the salary was $140K. The next day, I went into work at my consulting job, and I was like, Should I really quit? Maybe this isn’t so bad. They pay me so well and these benefits are amazing. And then one of the partners came into a team meeting and made my project manager cry in front of everyone. And I was like, Yep. I have to get out.

It wasn’t until I started my new job a few months ago that I realized just how miserable I’d been. My husband and I had been fighting all the time, constantly. We had a horrible year. I also wasn’t sleeping well; I’d work late and then dream about work all night and wake up exhausted. I stopped exercising and seeing friends. I gained about 15 pounds. One of my closest friends came to town, and we planned to get dinner together. I had to beg my project leader to let me step away for a few minutes. I was an hour late to dinner, stayed for ten minutes, and then had to leave. My job was completely out of sync with what I value in my life.

My salary is still good, so we haven’t had to make any significant lifestyle changes. Basically, we save less than we did before. But we also cook at home more because I have the time to do it. We live a pretty frugal life, and we’re not in an expensive area.

Sometimes I do worry I made the less ambitious choice. I identify as someone who likes to push myself. I care about being a leader. Sometimes I feel like I gave up by quitting. I have to remind myself that I can still be ambitious and get enough sleep and take care of myself. You really get indoctrinated when you’re in a high-pressure environment like that.

One other regret is that the consulting firm where I worked was famous for its health-care benefits and parental leave. It was known for “the $5 baby” — you’d have a baby and your hospital bill would be $5. I had some co-workers who were sticking it out just to have their $5 baby, take maternity leave, and then quit. Sometimes I wish I could have hung in there for that, especially now that we’re thinking about starting a family. But ultimately I know it wasn’t worth it.

Brianna, 25, financial journalist in New York

Pay cut: $100K

Until recently, I was a private-equity and -credit investor based in New York. I was making $130,000 a year base with a 30 to 40 percent bonus. Last year, I made a little more than $200,000.

It had been a goal of mine to work on Wall Street since I was in high school. We didn’t have much money growing up, and I didn’t want to be in that position in my future. I’ve always been good at math, so I got my undergrad and master-of-science degrees in finance. I was working in banking and then made the transition to private markets. I thought I was going to do this for the rest of my life. I wanted to eventually start my own fund.

By a lot of measures, I was doing really well. I’m 25, and I was basically spearheading the launch of a new private-credit fund. It was a lot of pressure and responsibility for someone my age. But it put me into a dark place. I developed a really bad Adderall addiction, partly because I felt like I couldn’t keep up with my workload, and I wound up going to rehab. When I got out, I went back to work, and after a couple days I was just like, I can’t do this. I started realizing that the work went against everything I believed in. I thought I could keep my personal morals separate, but I couldn’t. Being around that exorbitant level of wealth was sickening.

At the same time, my successes were a huge part of how I saw myself. I was very proud of what I was able to accomplish in this very competitive field, and it became my identity because I didn’t have time for anything else. I didn’t have any hobbies. I rarely saw my friends. But when I walked into a bar full of finance bros and I mentioned what I did, they would all be like, “Oh my God, how do I get that job?” That’s a good feeling and an ego boost. But ultimately the whole ecosystem put me into a deep depression.

I started looking for other jobs. I’ve always liked to write, so I thought I could potentially do financial journalism because I have all of this industry knowledge. I found a listing for a position to report and write about private-credit markets, and I applied. I’m not trained in journalism, but I’d been a credit investor for five years. I know what’s going on in the markets, what people are talking about, and how to write about it. This company took a chance on me without formal journalism training, which was great. And so I made the switch a few months ago.

I remember getting my first paycheck for my new job and being like, Oh my God, this is different from what I’m used to. My new salary is just over $100K, so it’s about half of what I was making before. Luckily, I’ve always lived below my means. I like to buy clothes and travel and go out to dinner, but I also barely had any time to do those things at my old job, so I mostly saved a lot for retirement. I had two roommates and I still do. I think I’m lucky that I quit before my lifestyle took off. I was at this inflection point in my old job where I was about to be promoted to vice-president. I was going to get my own apartment and level things up. Obviously, now, that will not be the case for a long time.

I used to buy drinks for all my friends at bars because I felt bad that I never saw them. I was trying to compensate for not being a good friend, never being fully present. And I had the money to do it because I was making significantly more than they were. Now, it’s the opposite — I have time to see my friends, but I can’t afford to go out as much as I’d like to. They’re like, “We never needed you to buy us drinks in the first place,” but they’re very happy that I’m around more. Actually, not a single person has questioned my decision — not parents or my friends or even my old colleagues. My co-workers were like, “Oh my gosh, I wish I could give up the money and do what you’re doing.” I think a lot of people get trapped by the lifestyle their paycheck affords them and then they feel like it’s too late to get out.

I’m still struggling with the ego portion of it. A career in private equity would have afforded me a really nice apartment, a different life. And the ceiling on what I can make in journalism is a lot lower. So part of me is still mourning the life that I thought I was going to live.

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What It’s Like to Take a $50K Pay Cut