{"id":1018,"date":"2020-04-14T19:30:33","date_gmt":"2020-04-14T14:00:33","guid":{"rendered":"https:\/\/blog.tickertape.in\/?p=1018"},"modified":"2021-03-24T16:25:00","modified_gmt":"2021-03-24T10:55:00","slug":"coronavirus-how-to-cope-with-a-salary-cut","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/coronavirus-how-to-cope-with-a-salary-cut\/","title":{"rendered":"Coronavirus: how to cope with a salary cut?"},"content":{"rendered":"\n<p>COVID-19 doesn\u2019t seem to be abating and now that the lockdown has extended until 3<sup>rd<\/sup> May 2020, uncertainty on many fronts may be hanging over your head. In these times, what concerns most is the chances of getting a job loss or a pay cut. If one of these happens with you, things can get out of hand, and by things, we mean \u2018finances\u2019. Well, it\u2019s not fair to receive a pay cut notice without any mistake from your side but do you have a choice here? You may or may not.<\/p>\n\n\n\n<p>While we know that forgoing even a small portion of your income can impact your lifestyle, remember that this is temporary. Most importantly, acknowledge the fact that you are not powerless. Yes, let that sink in. Now read on to know what you can do and what you shouldn\u2019t do if you are forced to take a salary cut.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/blog\/coronavirus-how-to-cope-with-a-salary-cut\/#Discuss-the-terms-with-your-employer\" title=\"Discuss\nthe terms with your employer\">Discuss\nthe terms with your employer<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/blog\/coronavirus-how-to-cope-with-a-salary-cut\/#Downsize-your-lifestyle\" title=\"Downsize\nyour lifestyle\">Downsize\nyour lifestyle<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/blog\/coronavirus-how-to-cope-with-a-salary-cut\/#Continue-to-repay-your-debts\" title=\"Continue\nto repay your debts\">Continue\nto repay your debts<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/blog\/coronavirus-how-to-cope-with-a-salary-cut\/#Rethink-your-investments\" title=\"Rethink\nyour investments\">Rethink\nyour investments<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/blog\/coronavirus-how-to-cope-with-a-salary-cut\/#Do-not-stop-your-retirement-savings\" title=\"Do not\nstop your retirement savings\">Do not\nstop your retirement savings<\/a><\/li><\/ul><\/nav><\/div>\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Discuss-the-terms-with-your-employer\"><\/span><strong>Discuss\nthe terms with your employer<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Don\u2019t shy\naway from asking your boss the way forward as it is quintessential for you to\nplan for the coming time. Your employer may have taken this step in unavoidable\nsituations but you are entitled to know what it means to your livelihood. So\nasking questions about your pay\ncut at work wouldn\u2019t be\nthat bad. But also bear in mind to find a middle ground to safeguard your\nemployment.<\/p>\n\n\n\n<p>Here are\nsome meaningful questions you may consider asking your employer about your pay cut:<\/p>\n\n\n\n<ul><li>How long would the salary cut be in\nplace?<\/li><li>Will they compensate you for accepting\na lower income in the future?<\/li><li>Will they offer any other benefits\nto make up for the cut in pay?<\/li><li>Can you add days to your work from\nhome kitty?<\/li><li>Can you take additional leaves?<\/li><li>Can you reduce your working hours\nper week?<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Downsize-your-lifestyle\"><\/span><strong>Downsize\nyour lifestyle<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Due to pay cut at work, there are high chances that you wouldn\u2019t be able to continue a comfortable or extravagant lifestyle you lived before the lockdown. But instead of putting all the blame on a lower income, you may as well accept the valuable gift that the lockdown has bestowed upon you. What is it you ask? Well, for starters, the lockdown gave you a chance to re-look at your lifestyle.<\/p>\n\n\n\n<p>By staying\nindoors for quiet some days now, it may have dawned upon you that not all your\nexpenses are inevitable. That money you spend on feasting upon a Starbucks\ncoffee or munching KFC\u2019s fried chicken every alternate day can\u2019t be\nunavoidable. Like these, there are several discretionary expenses that you can\nget rid off and free up your budget to meet other meaningful purposes. Getting\nthe point?<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Continue-to-repay-your-debts\"><\/span><strong>Continue\nto repay your debts<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>With a pay cut concerning you at all times, you may be tempted to miss your debt repayments. While this may seem like an easy solution now, it may not actually be. You can\u2019t stress enough on why it is vital to keep your monthly debt repayments going even in these tough times. Tell you why.<\/p>\n\n\n\n<p>Whether you\nhave a loan to repay, a credit card bill to pay or a monetary favour to return\nto your relative or friend, a debt, if not repaid on time, can become a\nnightmare. You will end up accumulating principal + interest + penalty, which\ntogether could land you in a <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-a-debt-trap\/\">debt trap<\/a>. So, avoid missing your EMIs or credit\ncard bills at all costs.<\/p>\n\n\n\n<p>But what if\nyou simply can\u2019t afford to repay your debts now? Consider liquidating an\ninvestment to do it. You can <a href=\"https:\/\/www.tickertape.in\/blog\/why-should-you-prioritise-investing\/\">invest<\/a> again when things start to get back on\ntrack. The math here is simple. Generally, you pay more interest on loans\ncompared to what you receive on certain investments. So, if you liquidate such\nassets, it would only save you from incurring a high penalty.<\/p>\n\n\n\n<p>But if you haven\u2019t been mindful and saved\/invested at all, there\u2019s just one option left: to exercise the moratorium offered by the government. The RBI has directed banks and other financial institutions to allow their borrowers a 3-month moratorium on repayment of loans that are outstanding as on 1 Mar. However, bear in mind that this is not an EMI <a href=\"https:\/\/www.tickertape.in\/blog\/tips-to-not-overspend\/\">holiday<\/a>. This means that interest on your debt continues to accrue and gets added to your principal, which you have to repay post-moratorium. Do your calculations before choosing any course of action.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Rethink-your-investments\"><\/span><strong>Rethink\nyour investments<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Your investments would also have suffered significantly in the recent times due to the impact of coronavirus. While as of now stock markets have tumbled, debt-instruments may also not remain attractive in the short-term, given RBI\u2019s rate cut. This may discourage you from saving or investing anything at all. But that would be a mistake!<\/p>\n\n\n\n<p>Your best\nmove at such a time would be to stay invested in your existing avenues unless,\nof course, you have to dip in to meet day-to-day expenses. Remember, your\nultimate goal is to cope with your salary cut. So, if it means pausing some of your high-value\ninvestments, you might as well do it. However, this doesn\u2019t mean you don\u2019t save\nat all.<\/p>\n\n\n\n<p>Remember\nthe consequences of not saving all this while and take that as a cue to\nsave\/invest every penny that you can. Continue investing for your short-term\ngoals as they are sprinting towards you and a lower income may make things uncomfortable. As for\nyour long-term goals, you can resume investing for them after you get a hang of\nsailing through with a lower\nincome. On the brighter side, if you can manage to save for them now and\nyour risk appetite permits, you can still continue investing for them.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Do-not-stop-your-retirement-savings\"><\/span><strong>Do not\nstop your retirement savings<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Finally,\ndon\u2019t forget to park your funds for your ripe years. Nothing can replace your\nretirement investments therefore, pausing them would be foolishness. Tell you\nwhy. Cultivating a habit of saving and investing takes some time and effort,\nwhich you have already put.<\/p>\n\n\n\n<p>If you stop\nnow, getting back on track may not be very easy. You know it so continue adding\nto your nest egg. You can\u2019t postpone retirement and its quality depends on your\nsaving and investing actions now. So, don\u2019t let yourself down.<\/p>\n\n\n\n<p>While a pay cut notice can rob your sleep for some days, you can still tide over\nit by adopting the afore-mentioned ways to cope with your salary cut while maintaining\nyour sanity.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Read ways to cope with pay cut due COVID-19 and lockdown<\/p>\n","protected":false},"author":27,"featured_media":1022,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[8,1740],"tags":[],"acf":[],"modified_by":"Manonmayi","jetpack_featured_media_url":"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2020\/04\/Salary-cut-1.jpg?wsr","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/1018"}],"collection":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/users\/27"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/comments?post=1018"}],"version-history":[{"count":4,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/1018\/revisions"}],"predecessor-version":[{"id":1025,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/1018\/revisions\/1025"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media\/1022"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media?parent=1018"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/categories?post=1018"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/tags?post=1018"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}