by Melody Hatke

Created on: May 22, 2009   Last Updated: May 24, 2009

When asked to take a pay cut, you should take the pay cut, do not take a lay-off. Many people think a lay-off would be fine for awhile, like a short paid vacation. Get some chores done around the house, that you have not had the time to finish. Fix some of those objects that you never have time to fix. A lay-off may not sound too bad, and your employer will probably tell you, that the lay-off is only temporary. No one can predict how long a lay-off will last, so don't fall for that line.

Before you decide, think about what you will lose, by taking a lay-off. You will lose your health benefits, not right away, they may keep them for you, for about two or three months, then you are on your own. Your state may have insurance you can purchase, but it will probably be about three or four times the amount you are paying now.

Your 401K, you will not lose it, but there will be no money going into the fund, so basically you won't lose anything, but you will not be saving for your retirement either. Just think, if you are contributing twenty dollars a week, into your 401K. That would be eighty dollars a month, so being laid off for a month, you will lose eighty dollars that could be in your 401K.

How much will you actually get on unemployment? The state is not going to pay you, the full amount for unemployment compensation. So the state will also cut your pay.

You must also think about your mental state. Do you have enough projects and hobbies to keep you busy, during a lay-off? Will gaining weight, cause you to become depressed? Will separation from your co-workers, and the daily social interaction,cause you depression? Then, there i, how well do you like the neighbors? Because you will be home more and hear and see people that you usually avoid, while at work. From experience, staying home on unemployment is great for a couple of weeks, then the boredom sets in, and the crankiness, and you get annoyed by everyone around you. If you are a person, who does not like to change your daily routine, then a pay cut, will probably work best for you.

Everyone's situation is different, and each state has it's own laws, so it is hard to say generally, what you should do. Do not make this decision in haste, take your time. Before you decide, weigh the pros and cons, and think of what you could lose, by leaving your job. Due to hind sight, and personal experience, you should most definitely take a pay cut, if one is offered to you.

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