Imagine you’re 27 years old, have no college degree and have been working a desk job you hate for three years. You’re looking at decades more in the workforce doing a job you can’t stand — but you’re making $22 per hour plus benefits, so you’re doing OK financially.
One day, the volunteer program you’ve been working for offers you your dream job doing something you’d adore with people you like — but you’d be paid just $15.50 per hour without any benefits.
You can afford to take the pay cut because you live with your parents and can get health insurance subsidies, but there’s little potential for career growth and a long commute.
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In this situation, would you — and should you — take your dream job? Or should you stick it out in your current career to make more money?
Here’s how to decide what to do if you’re facing this decision — or any other scenario where you have to decide whether to take a pay cut to improve your work satisfaction.
What you need to consider
If you’re trying to decide whether to accept a low-paying dream job, the first and most important consideration is whether you can live on the money you’d make at the job. If you can’t easily cover your living costs, taking the job doesn’t make sense. Jobs are meant to fund your lifestyle, and you don’t want to lock yourself into a life where you’re in debt or struggle constantly.
If the job would allow you to cover your current bills, but you’re single and live with your parents right now, you also need to think about the future. Would you still be able to live on the salary you’re earning if you decided to move out, get married or have kids? If not, are you OK with potentially needing to reroute once again later down the line?
Looking at your long-term job prospects is important too. Are there opportunities for salary increases, or will you be making a low wage forever? Will the job help you learn transferable skills so you could transition to a higher-paying industry, or are you limiting earning potential for life? And are you OK with lower Social Security benefits, as those are based on average wages?
You may want to try calculating what your net worth would be five years from now with your current pay and possible lower pay to get a hypothetical picture of the future.
Finally, consider what’s going to make you the happiest. If loving your work is really important to you, and you’re confident the job will give you lots of professional fulfillment, you may want to take it. However, if you hate driving and it’s a long commute, or if you’ll have to significantly cut your budget, you may end up unhappy despite the job.
Thinking about which path is going to bring you the most joy allows you to decide if it’s money or job fulfillment that you want to prioritize.
Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
Navigating a lower-paying job
If you’re committed to taking your ideal job despite a low pay rate, there are steps you can explore to keep your finances stable.
First, you should try to negotiate the salary. According to a 2023 Pew Research Center survey, 28% of Americans who asked for higher wages were given the amount they asked for and 38% got less than requested, but were still paid more than their original offer.
If you can’t get a higher salary, finding supplemental sources of income (such as working overtime or working a side gig) could make it possible to take the lower-paying job without derailing your finances. Just consider whether this is sustainable, though, because having your ideal career but having to work a second job to make ends meet may become a burden.
Adjusting your budget to live on less is another option. You can look into government benefits to stretch your money, such as Affordable Care Act insurance subsidies, or the Earned Income Tax Credit, which allows some low- and moderate-income taxpayers to save on taxes and potentially get more back in their refund.
If you can find solutions like this to make the numbers work, you may decide that taking your perfect job is worth the sacrifice. Just remember to think about the big picture and consider your long-term happiness and financial stability before you decide.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
