“They’ve Asked Me To Take a Pay Reduction. What Do You Think?”


Dear Steve,

I am 47, divorced, 2 teenagers, work full time as a radiological technologist at a privately owned company out of the state. The doctors’ group that read our films owns our building.

After my divorce, I filed for chapter 7 bankruptcy. I reinstated my van, rent a townhouse in mid-lease. I have no debt except my van, 2000, and I owe about 8 months left. My company volume has gone down, and we have less staff than we ever have because of eliminating positions.

Last week the company out of Florida called and sent all 31 facilities in the US an across-the-board 7% reduction in pay, top to bottom staff.

I now make $20.00 an hour, and I have a stringent budget with no extras, no savings, living paycheck to paycheck because I only make enough for that. I am putting a small amount into a 401K.

How do I know that my company will really be able to pull out of this as they tell us they want to happen or are in bankruptcy or something of the sort.

I don’t know if I should assume the worst or hang in on my job. Jobs aren’t in big demand in my specialty. I could hang in and do nothing, get a second job, change completely or go to school for another more demanding in my field or get a bachelor’s degree.

I presently do mammograms with low reimbursement to the company. I am loyal and in good favor there.

What are your thoughts? What’s your wisdom on this?



Dear No Name,

It is a terribly stressful situation to make it from month-to-month and then be asked to take a salary reduction. I’m sorry that you are going through that.

If you find that you have to use credit to make it each month, you might want to consider suspending your 401(k) contribution right now so you can live within your income instead of supplementing it with credit.

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As I write this, the U.S. is pulling out of some uncertain economic times. But the good news is that the vast majority of people do have jobs and finding new jobs again.

I never like to see someone give up a current job without a new job lined up. It is good that you have marketable skills, and you can easily identify employers in your area that you might be able to work for.

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Rather than wait for a job to appear, I’d suggest that you call all the local facilities in your area and see if they are hiring. Maybe you know some other techs in the area and you can network with them to see if anyone is thinking of hiring.

Often the easiest jobs to get are the ones that have either not yet been advertised or are no longer advertised but still open.

It really does not sound like you have much extra time in your life for a second job, and going back to school isn’t necessarily a good thing to consider unless you would be able to get a degree that would allow you to make significantly more money in a position where there are openings in your area. If you didn’t finish the degree you’d just end up with more debt but no degree.

The major issue with going back to school as an adult is that it is enormously expensive. Not only will you have college expenses, but you’ll still have your current monthly expenses to deal with at the same time. Don’t go back to school unless you are certain you can manage those expenses and will really finish your degree.

I don’t think you have to worry yourself sick by assuming the worst right now, but the prudent thing would be to make a concentrated effort to look for a higher-paying job in your area first. Always better to be proactive than reactive.

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Damon Day - Pro Debt Coach


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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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