4 Factors to consider first
Does the new job offer non-monetary benefits you can't pass up?
Not every benefit associated with a job is monetary in nature, and you'll need to consider these in your decision-making process. For example, a shorter commute or better health benefits might outweigh the pay cut and can actually help ease the financial burden of lost wages.
Compare the benefits in your new offer to the benefits associated with your current job closely and be completely honest with yourself. Bonus structure, health insurance, commute time, and work-life balance should each be considered when making this type of decision.
Is there more room for growth in your new employment setting?
A lower starting salary can be offset by potential professional growth in some cases. If the new job has room for substantial growth, taking a pay cut might actually be financially beneficial.
Examine your career trajectory at your current job, and the potential trajectory with the new company. If the lower offer has more opportunity for growth, taking a pay cut now may pay off in the long run. This is not an uncommon situation either, so don't be afraid to ask your new HR manager or boss about your potential for growth in the position once you've received an offer.
Are you changing your career entirely?
Often times taking a pay cut is beneficial if you are looking to break into an entirely different field. If your current job isn't in the field you love, you'll eventually burn out and fail to perform the way you want. Taking a job, even at a lower pay rate, in a field, you are passionate about can be beneficial on all fronts.
Be careful, however, to examine whether the new field is really the career path you'd like to take. Taking a pay cut for a job you are not sure you'll enjoy is a risky endeavor. Before making the leap, research the field extensively to ensure it is the career you really want. You will also want to consider how long it will take you, in your new career, to earn your lost wages.
Can your budget afford to lose the cash?
This is the make or break question. While taking a pay cut to get involved with a new company or new venture might seem like a good idea, you'll need to take a hard look at your budget. If you are spending the majority of your current income on bills, odds are you can't afford to take a pay cut, but if you have plenty of leftover money for luxuries and entertainment, losing some cash won't be the end of the world.
Look at your budget closely and figure out what you can cut out to make your new, lower salary work. It may mean missing out on some of the fun you are currently enjoying, but the long-term rewards may appeal.
Taking a pay cut rarely seems like a good idea. After all, most people don't actively go out looking for jobs that offer less money than they are currently making, but there are scenarios in which taking a pay cut is not only beneficial to your career, but can also be beneficial to your pocketbook, too. Before you turn down a great job offer simply because of the pay, ask yourself the four questions above.