I work for a small Interactive Agency of twenty-four people. This is a company that managed to survive the dot-com bust and, like any company, has good times and bad times. Our president always makes every effort to keep great people, even if it means cutting her own salary. I consider myself lucky to have found a place there, not only because I love my work, but for the atmosphere and common sense of purpose.
Now, I consider myself even luckier. Yesterday, instead of twenty-four people, there were twenty-six. We simply don’t have enough work in process to keep going the way we were, so the management team had to find $60,000 a month to cut out of our operating costs. We had to let go of two project coordinators, ’cause we simply didn’t have enough to keep them busy.
Less drastic, but more personal, is the 10% salary cut that will affect everyone else for the foreseeable future. This will bring my before-tax salary of $80k to around $72k. I’m not going to complain about this. $72,000 a year is a lot of money, especially considering I don’t work under hazardous conditions, or with unruly children, and I don’t have to take steroids to stay competitive.
However, this will require my wife and I to tweak our budget somewhat. $72,000 is a huge salary for someone with no debts; unfortunately I am not that someone. It was that extra $8,000 that was enabling me to make so much progress toward finally erasing my credit card debt that began in 1997. As of today, the balance is down to $3,522. My first instinct for modifying the budget is to say, “Okay, let’s just ignore that credit card until things get better.” I know that’s not wise. The last finance charge on the card was about $37, and if I start making just the minimum payments each month, that number will just get bigger and bigger. It’s a complete waste of money.
But there are other considerations, too. My wife and I have things we want to do this year. In fact, we’ve already paid more than $1,000 to go to a conference in California, but we haven’t arranged any plane tickets or figured out where we’re going to stay for the vacation days when we’re not at the conference itself. And then there’s the pet sitter, the meals in nice restaurants, etc.
Or maybe this is the kick in the pants that I need in order to spend more time working on my freelance work. Given the different ways that a salary and freelance work are taxed, in order to make up the difference, I’d need to earn about $1,000 a month (putting half away for taxes the next April). I don’t imagine that’s going to happen anytime soon, but it does give me something to work toward. Flexo is always happy to have me write more for this site, and there’s a side business in Web Analytics that I’ve been flirting with. My two pro bono clients (I wanted to practice) have been thrilled with my work so far, so maybe it’s time I start courting paying clients.
As I said, I can’t really complain about my cut in salary. If it weren’t for the two car loans from 2006 and my history of dumb materialism, my wife and I would have quite a bit saved up. I have faith we’ll get to a point of having a three-month buffer, but it won’t be this year.