Talking about money and salaries was much more common among my friends when we were just out of college and looking for our first jobs. Perhaps it’s because we were all on equal ground – around same age, student loan debt, and looking for our first jobs – that made it seem less intimidating.
Now that my friends are in their late 20’s and early 30’s and we’ve been in the work force for almost a decade (!), we don’t talk about exact numbers as much as we used to. They’ll say “I make in the range of X” or “I got a 10%” raise” without saying how much they now make. And so in turn, I use vague references about my salary and finances too.
However, since I have this blog, anyone can poke around and see how much money I currently make (and how much I’ve made in the past), as well as pretty much any other financial detail of my life. And I’m okay with that because I’ve always been pretty open when it comes to talking about money with my close friends. If someone asks me a question, I’ll happily answer (and as a PF nerd, I’m always hopeful for an engaging financial conversation). But as a rule, I don’t bring up anything to do with personal finance or salaries unless specifically asked.
Knowledge is power
Simply knowing what a friend or co-worker is earning will not result in a raise for you. That’s not how it works. But it could help you negotiate more confidently during your next performance review or job search if you know what other people with similar experience in similar industries are making. There have been countless instances where I’ve reached out to my friends in marketing to ask about their salary range and responsibilities, and I’ve been approached often as well to provide the same sort of information. Sometimes we don’t talk specific numbers, but just being able to pass along information seems to help.
If you’re not comfortable talking about money with your friends just yet, at least be sure to check out websites like Glassdoor, which can help you see what others are making in similar jobs within your city. I just pulled the below screenshot from Glassdoor after searching for Marketing Manager salaries in Vancouver. Now, that’s not my exact job title, but it’s close enough. And I feel good knowing that my salary falls comfortably within the range below.
But there are other benefits to knowing what your friends make besides helping each other with job searches and raise negotiations. It can also give us each other a greater understanding of how much to spend when going out to restaurants or traveling. If my friend knows what I make, perhaps she will understand my budget and how much I’m comfortable spending when we are together.
Honesty has consequences
While talking about salaries with close friends can be a good decision, it can also have negative effects as well. Depending on what your relationship is with someone, finding out how much they make might bring on feelings of jealousy. It could also inspire resentment within the friendship when you start to notice small examples of what one person has that the other person doesn’t (like a designer purse, or dining in fancier restaurants, etc.) – a “keeping up with the Joneses” mentality.
I wouldn’t be comfortable talking about my salary or details about my finances with people I’m not close to. But I do think it’s beneficial to have open discussions about salary ranges, responsibilities, negotiation strategies, promotions, etc. with people you trust who are doing similar work or are within the same industry as you.
Do you know how much money your friends are making?
When I was in high school, I was told by my parents and teachers to find a career based on what I was passionate about. Choosing a career path is a lot to ask of a 17 or 18 year old, and people often stay in school for years, get multiple degrees, leave jobs to get re-educated, or drift aimlessly, never really finding what it is they can be passionate about. They ponder what their true calling in life could be, and how to turn that into the Dream Job. But for some people – me included – a job will always be just that: a job.
Another one you hear a lot is “do what you love, and the money will follow.” Which might be the case for a few very lucky people, but unfortunately probably isn’t reality for many. If your passion happens to come with a low-paying wage, irregular/odd hours, or some other major issue, you have to make a choice: do you follow your passion with whatever faults it comes with, or do you choose something that you’re lukewarm about, but will offer you the lifestyle and stability that you want?
I chose not to pursue my passion because it did not align with the lifestyle I wanted for myself, and I learned that in 2007 – just one year after graduating college. I was offered a job that was two steps away from my Ultimate Dream Job. The only thing was, I’d have to take a 35% pay cut from what I was making at the time. It also required irregular hours, and plenty of OT (so much that it would be impossible to get a part-time job in order to make up the difference in salary). I wanted the job, but I couldn’t justify it. I would have to sacrifice my other dreams – like early retirement, owning a home, and traveling regularly – just to have what I would consider The Perfect Job. Essentially, I’d have to make my job my lifestyle choice.
In the end, I turned down the job. Which actually surprised me. I always knew The Perfect Job for me wasn’t exactly going to be high paying, I just always figured I’d find a way to make it work. But when the time came to actually make that decision, I started to second guess myself. Did I want to spend my life working long hours for a low salary? How important was traveling to me, and was retiring early really a goal I wanted to achieve? With the new job, I wouldn’t be able to do any of those things, no matter how much I cut out of my budget. So all of a sudden, The Perfect Job didn’t seem so perfect anymore. It was a hard decision to make, but I had to be realistic with myself.
I realized that, above all else, I would never be satisfied with my career unless I saw potential to grow my salary as I grew as a professional. And unfortunately, that was the one thing The Perfect Job couldn’t offer. It would always be low-paying, even at the highest level. So I chose a different path.
I am not passionate about my day job. Don’t get me wrong, I like marketing a lot. I think I’m pretty good at it, and it makes me happy enough that I hope to work in this field for the rest of my career. It is the path I chose for its versatility, salary range, and creativity. It offers a little bit of everything I like, and there’s a great deal of potential upward movement as my career continues to progress. So while it’s not my Dream Job, it’s as close as I’m going to get to it, while maintaining financial stability and achieving all of my other life goals as well. And really, I can’t ask for much more than that.
Some people have found a career they are passionate about. Whether they are rich, or poor, or anything in between, they wake up every morning and are absolutely excited to go to work. I honestly think that is incredible, and a really rare thing these days. But it’s unrealistic to believe that can happen to everyone, and I think we put too much pressure on people to find a career like that. There’s nothing wrong with not being in love with your job, and you don’t have to feel passionate about everything that you do in your career to feel fulfilled. You just have to like it enough to want to do it every day.
Are you passionate about your job?
In my relatively short 9 year career, I’ve taken two pay cuts. Taking less money is a hard thing to even consider (especially if you’re like me, and you’re not making a lot to begin with), but there’s so much more to a job than just the actual salary. When I eventually decided to take on less money, I factored in so many other benefits into the equation, and in the end both pay cuts seemed worth it to me.
Here are 5 reasons why I would consider taking a pay cut in the future:
When you’re changing careers
I think one of the major reasons why people consider pay cuts is when they are switching careers altogether. It’s unreasonable to expect to receive a large salary when you’re moved into a job where you have little (or no) experience.
And in some cases, changing industries and location could come with a permanent pay cut. Bigger cities could come with bigger salaries, and different industries just might not have the funds to pay top dollar for the position you’re looking for. For example, when I moved from a government job to a non-profit job, I accepted a 20% pay cut. That might be a bit drastic for some people, but I knew it was the right path for me to take.
When you start your own business (freelancing)
Self-employment is a dream many people have. But with that dream comes a lot of risk, and that could include taking a pay cut while you get yourself established, as well as having to hustle harder to get work. I know a few freelancers who went out on their own with just a couple of key clients. They worked part-time hours until they could establish themselves enough to bring in more work and hire employees to help with the workload.
As someone who once decided to quit their corporate job and try out freelancing full-time, I can tell you that it was a struggle at the beginning. Eventually, I was able to create a steady stream of income, and ended up making more money than at my 9-5 job, while working significantly less hours each week.
When there is more room for growth elsewhere
If your career path is stalled because it’s a small company, and there’s no room for a promotion or salary growth, it’s hard to stay in one place. A short-term salary cut in exchange for better long-term potential and growth could be a great investment in your future.
When your work-life balance needs adjusting
A few years ago, I was working 60-75 hours/week at my full-time job and freelancing. It wasn’t something I knew I could do long-term, and eventually I gave up the extra hours (and the extra money) in favour of a life where I worked a normal 40-50 hours/week. I am significantly happier now that I have time to dedicate to what I really love in life – spending time with friends and family, being outdoors, and having more time to focus on myself.
And yeah, I do miss the money, but I definitely don’t miss the stress (or the lack of sleep).
When the compensation perks make up for the salary
When I accepted the job I have now (after wage negotiations) I accepted a 15% pay cut from my previous job. It was really difficult to deal with at first, and I didn’t think I would be able to take the job. But once I started to look at the compensation perks and benefits associated with the position, I actually end up coming out ahead.
Not only do I spend less time commuting (which also saves on gas), but the extended health benefits are more extensive, it’s a 37.5 hour work week compared to 40 hours, I can bank time off, I get paid out for overtime, and employees receive two bonuses each year. With just the bonuses included, and I come out way ahead.