Should You Take A Low Ball Salary Offer?

In basic economics, we all learned about the law of supply and demand.  We have seen how powerful this can be over the past several years in the real estate market as supply in many cities has grown, and demand has dwindled.  Consequently, you may be seeing some of the greatest real estate deals we have seen in decades around the country. The same may be true about the labor market. With unemployment still higher than normal and a limited number of better paying jobs, one of the questions we often hear is should I accept a job offer for a lower salary?

This can be an extremely challenging question to answer, and why you need to think about your household like a business when it comes to your finances.  Since most people tend to make very emotional choices around their personal finances, having a Private CFO® by your side could make all the difference in making the best choice to grow the wealth of your family.

The obvious piece of the puzzle is that without having consistent revenue, you will tap into savings or retirement money prematurely because there simply isn’t enough revenue to cover expenses.  You may have a severance for a period of time such as a year or may be collecting unemployment, but these revenue sources won’t continue to carry your expenses over the long haul.  That can only be replaced by consistent income from employment.

The first piece I would consider is to judge every opportunity not by salary, but by something called the Total Economic Package.  This formula will allow you to look at the total dollars that would come in from an offer vs. just the salary. Remember, that a total dollar offer should consider items such as how much of the cost of benefits does your employer pay, what kind of match may go into your retirement plan, and things like stock options or restricted stock unites. Since so many wage earners can only focus on how salary affects their household, it is very important compare future job offers on the total economic package.

The second piece to consider is your value in the market place as the length of time you are unemployed increases. I believe that while you may have tremendous skills and experience in your resume, being out of work for over a year can really hurt you if the goal is to hold out for a higher salary. Remember that you can always take a job for lower pay and set your expectations with your employer about what both of you need to bring to the table to increase your income.  You can also continue to look while you are currently employed.

The last piece of this is to set expectations for yourself, especially if you were a six figure salaried wage earners. As both large and small corporations tighten their belt, it is likely you will take a pay cut below where your wages used to be. Only you can determine what truly is a low ball offer, but with the law of supply and demand I would be a bigger fan of getting revenue on your books even if at a current discount from yesterday’s price.  If you were successful in growing your income in the past, times will be good again and you can do it in the future.

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Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®
Co-CEO and Founder oXYGen Financial, Inc.


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About the author  ⁄ Ted Jenkin @ Your Smart Money Moves

Ted Jenkin @ Your Smart Money Moves


My friends and family all think I’m a workaholic, but I say I’m just a guy that loves to help people do better in life.

My mother is still the only one that calls me by my real name Theodore Michael, my wife calls me Teddy, but for the rest of you it is just plain old Ted.

Ever since I was a little kid, I always loved money and being an entrepreneur. In fact, I still have cassette tapes of me talking to my grandmother at the age of five and my mother tells me all the time how much I played with money as a kid...

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Ted Jenkin is a frequent guest columnist for the Wall Street Journal and Headline News Weekend Express. He is the co-CEO of oXYGen Financial. You can follow him on LinkedIn @ www.linkedin.com/in/theceoadvisor or on Twitter @tedjenkin.

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  • Avatar
    September 10, 2010

    I would say it’s OK to take a lower salary offer if you feel like a) it’s going to be a stepping stone to a brighter career path and b) you think you’re going to be happier in this position and it will be more fulfilling as long as you won’t be bitter because of the lack of money. Need to set your mindset.

  • Avatar
    September 22, 2010


    Mindset is the key word here. You just need to set clear expectations on what kind of money you will make in your own head as we aren’t in the bull economy we were a few years back.


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