I recently took the leap to move out into my dream apartment. I needed to get out there on my own and I have been told I was a strong candidate for a promotion at work, which would've brought me from $19.50/hr to $21/hr, which made me feel confident to stretch things a little to jump for this. The new place is perfect so far.
Well, today I got the bomb dropped on me that I'm actually receiving a pay CUT and placed on a performance improvement plan. I'll now be making $17/hr and they made it sound like I'm basically on parole or something for 60 days, and after that I'll have another meeting with my boss where we'll talk about my progress.
I am completely blindsided by this and I'm devastated and panicking. The only thing I can think that would've caused this is I had a meeting last week where my boss asked what I had accomplished one day and I admitted there wasn't much because I was suffering from severe anxiety that day because of things in my relationship. But still, I thought we had talked it out and he seemed understanding, I feel completely betrayed that he's cutting my pay for this.
It feels like there's no way to make my budget work now. These are my new finances from what I had planned:
Savings: 340
New income: About 2,195/mo
Expenses:
• Rent: 1,080
• Renter's insurance: 18
• Utilities: 290
• Internet: 50
• Groceries: 200
• Car payment: 475
• Car insurance: 250
• Gas: 100
• Subscriptions: 36
• Saving: 30
• Eating out: 60
My question is: What do I do while I'm waiting for my income to go back up? I could break my lease, but I just finally left home and I really do not want to lose that independence, plus there's a 2 month rent penalty, and I had to use most of my savings to pay the move-in fees so I would have to put it on my credit card. Should I just put my excess expenses on my credit card during the PIP?
Recieved a surprise pay cut right after I moved into my new apartment, how to make it work?
byu/FreeHotdogMandate inpersonalfinance
Posted by FreeHotdogMandate
35 Comments
You can’t predict the future. If you don’t have enough EF to get you through a possible job search, you should (sooner than later) weigh the costs of cutting the lease now vs later, because depending on the terms it might be cheaper now.
Only you can decide the likelihood of income going back up, we have no insight. Definitely don’t blithely charge up your cards and hope everything turns out ok
Cut your budget, sell possessions, second job, gig work, etc. Whatever it takes. This really should highlight the importance of a larger sized EF for you going forward, learn the lesson. Best of luck
Your car insurance is $250/month?? That’s absolutely insane unless you’re like 16 with 3 DUIs or something. Shop around immediately, that should be like $100-150 max
Also yeah putting stuff on credit cards while hoping your job situation improves in 60 days is a terrible idea – you’re already spending basically everything you make
Start looking for a 2nd job asap and milk your first job for as long as you can
Not to add to your panic, but PIP usually means company laying the paper trail to fire you. Seeing as you didn’t mention looking for a new job, I would use these 60 days to look for a new job; “waiting for my income to go back up” is probably not what is going to happen on day 61.
As far as your budget: your utilities seem very high. 290 and that’s not including internet?
First: learn your lesson. Never count on money you don’t have.
Second: half your income going toward rent was a bad idea. The rule of thumb is 30% . Now you see why. One needs margin for unexpected life issues.
Unless you are picking up a second job, you cannot afford this place. You need a roommate or need to move back home.
Immediately look for a new job. The likelihood of them putting you back where you were is slim, considering they blindsided you this way. I don’t know the full situation obviously but as someone else mentioned, this is typically the path to terminate someone.
Performance Improvement Plans make me squeamish. If it was me, I would be looking for another job. In fact, when it DID happen to me, I did look for another job. It was clear, for me personally, that my boss was looking for an excuse to fire me. This was after 10 years of being a good employee.
They’re going to fire you in 60 days. That is legit your warning. You need to get a new job asap.
What you can do immediately is get thrifty for a time, cut out non essential like unnecessary subscriptions, eating out, heating to 70, long showers, etc. you can probably save a couple hundred bucks a month. What you can also do immediately is find a part time second job to replace some of your ‘lifestyle’ time for a bit and give you a bit of security if the main job should fall through. For example near me the gas station is hiring part time evening shift for $16/hr starting for basing stocking/food service, which isn’t much but they’ll hire basically anyone who will do the bare minimum like come to work when they say, and do their tasks. I’m sure there are a lot of other examples of fairly easy evening jobs.
Nothing wrong with buckling down and living hard for a stretch of time until you get your boat righted.
Now why would you tell your boss that you’re not performing well due to your relationship. 🤦♀️ never tell your bosses anything personal about your life!!
$475 for a car payment is outrageous. Add in insurance and your over $700 a month or 35% of your income. Sell your car and buy a beater with minimum insurance for the foreseeable future.
If you include internet, you’re spending $1420 on literally just functional shelter. That doesn’t exactly leave you with a lot of wiggle room. Is there any chance you can get a roommate to split those costs with?
The other stuff is higher than you can probably afford, especially car payment + insurance, but if you cut your rent/utilities in half, you’d be basically fine.
PIP = You’re gonna be let go in 60 days. These 60 days are more for the company to safeguard themselves from you suing them. Sorry to add to it but use these 60 days to find a new job asap.
WTF – your car insurance is crazy high. If you have tickets, you are better off getting rid of the car and figuring out another way to get to work —- while you are still employed there
What kind of work do you do? Is it target based?
A PIP means your employer has started the process of documenting that you are not performing your role to the required standard of the role. This means they can safely let you go and you cannot successfully claim a wrongful dismissal as they have told you where you are failing and given you the opportunity to correct your failures.
It is possible to survive a PIP but it is not the usual outcome. However, if you role is entirely metric based (think call center type roles where everything is monitored and measured and your performance is black and white) it is more possible to get through a PIP (by consistently hitting the metrics).
For the future, remember your employer is not your friend. Don’t tell them you didn’t get anything done. They are paying you to get stuff done.
Perhaps you can understand at this point why many were telling you in your post 12 days ago that you were in a tough position to move out.
It costs you $1080+290+18+50 a month to stay at this place. That’s $1,438 dollars per month out of your income that you have to spend to stay here, coming from $2195; $2195-1438=$757 to pay for everything else with your income. For your expenditures? $757-475-200-250-100-36-60=$-364. That’s not feasible for you unless you take on credit debt.
Even if you have to break the lease and pay the fees for that ($2160), unless you have absolute certainty that your job situation will work out, you can’t handle those rental expenses in the long run. At best, you get 1 month at your current expenditures until you are further in the red than cancelling your rental contract.
Unless you think you can find a job that can let you manage the expenses you have at the very least (so a job which pays you $1080+18+290+50+200+475+250+100+36+30+60=$2,589), you need to cancel the lease and move back in home. At best, you have 1 month of this life until it catches up to you and starts snowballing into unsolvable debt.
Irrespective of anything else, I don’t think you’re financially ready to move out yet. It’s a tough market right now, and your savings are not enough to guarantee you security. Unless there’s family issues that prevent you from staying at home, it would be in your best interest to move back in and make better financial choices (especially on the car) for the short term to save your long-term financial future.
Move back home. You’re not gonna last at the job or apartment
Don’t unload your personal stuff on your boss. Always defend your position.
If your budget was contingent on a $1.50/hour raise, it wasn’t a very feasible budget to begin with. $20/hour is not “get your dream apartment” kind of money. In today’s economy, it’s “take whatever you can get” kind of money.
> Saving: 30 Eating out: 60
Surely you’re re-evaluating your priorities on this?
Your car is way too expensive for your income level, even with the raise. That’s really the elephant in the room here. With gas and insurance you’re spending almost 40% of your monthly take home pay just on your car. That’s insane.
I wouldn’t bank on your income returning to what it was before at the current job. They might be getting ready to let you go. Honestly I’d probably just move back with my parents for a bit if this were me, as long as the relationship is good there. Losing your independence for a few more months to get back on your feet is better than racking up debt or ruining your credit. You need to either find a cheaper place, a better paying job, or a cheaper car if you want to make it work on your own.
Edit: saw the post history where you asked if you can afford this apartment before you got it, and just about everyone in that thread told you it wasn’t a good idea and that was before you got this pay cut. You were already at your absolute max with no wiggle room. I guess i don’t get asking for advice that you won’t listen to.
How are your social skills, you didn’t move out to move back in…. It you have space get you a room mate if you have space and they allow you, wishing you the best.
I highly doubt that they would put you in review and cut your pay if you were actually line for a promotion. It wasn’t telling them about your personal life that made them do this. You were likely already on the chopping block for other reasons. It may be your performance or it could be internal reorganizing. Hard to say with limited information.
But in the future, have better answers ready for performance reviews on what you’ve accomplished and be prepared to fight for your role. And don’t discuss your personal relationship issues at work. Most employers expect you to keep your personal affairs from affecting your work unless it’s something like illness or death in the family.
The employer I just left had a history of screwing people over like this. The moment you’d mention anything about mental health, anxiety, depression, etc, her (the owner’s) horns would come out. I was warned not to say a word about “mental health” while working there or she’d turn on me, too. Just to say – yes, you should take your PIP seriously, be quantifiable and hold yourself accountable, but also keep in mind that there are people in this world who just don’t like these topics and don’t want people on their team who think ‘mental health’ is something that they should worry about. At least in my case, she is a big believer in “suck it up and get it done” and if you can’t, in her eyes, you’re not worth her time. Next time, protect yourself, remember that less information is always more, and that employers may treat mental health issues like physical health issues – meaning, they’ll want documentation etc. if you want to modify your job over it.
This isn’t the end of the world, you have some great advice here, and you sound like you’re more than capable of seeing this through and coming out of the other side OK. Best of luck!!
Bust your ass, meeting the goals of the PIP if they’re achievable. If not, it’s likely the groundwork for termination. If you believe this the case, start looking NOW.
Don’t break your lease. It seems like your independence is important to you. I think you should stop eating out for now. Food is way cheaper made at home. And would getting a bike work for your situation. Those car payments are a lot!
Your car payment is more than what your housing should have been. It’s also higher than mine and I make a tad bit less than 10x your pay. I always tell my nephew you can be a millionaire on a min wage salary but you need to make your money work rather than dumping it into things that don’t love you back. He drives a car 24 years newer than mine.
Also pip is very bad so if you want to be able to rent ever again, I’d start looking for a backup job now
This whole ‘severe anxiety’ excuse is out of control. If you have severe anxiety, see a psychiatrist, get a diagnosis, and you’ll be able to get accommodations at work. We all have anxiety. Look at it this way: I hire you to mow the grass, 8 hours later the grass is still not cut, and you explain you didn’t do much because you have anxiety about your boyfriend. I’d fire you too.
Doesn’t seem like you leave much room at all for this new apt even at the higher pay rate.
Start looking for another job pronto and NEVER be honest with a supervisor or boss.
You need a new job.
I’m quite curious how a potential promotion turned into potential unemployment.
You are going to get fired. A PIP is just a step towards that. I would immediately start looking for a new job. Leave as soon as you find a job if you can find one before you get fired.
Your expenses exceed your income by $364 monthly, get a side job ASAP so you aren’t falling deep into debt and find a new main job that pays significantly more. You should try to find a roommate if possible and be saving something every month, not losing. Good luck, you’ll find something.
Start looking for a new job, period. 17 dollars an hour is slave wages. Start looking for a new job.
Your car insurance of $250 seems a bit higher than I would expect (I’m paying $100). Have you shopped around with different insurance companies?
Your savings of only $30 per month is way too low. You should be cutting everything possible to get that up (e.g. eating out).
As others have mentioned, definitely start looking for another job. You may even find one that pays more than you were making!
PIP = paid interview period
You’re 95 percent going to get let go