Would You Rather?
Posted by Gail | Filed under Goals, Money Management
Have you seen the kids playing the game, Would You Rather? It kind of goes like this:
“Would you rather eat dog pooh or be stepped on by an elephant?”
Some of the stuff they come up with is really funny. Some of it is just weird. But whenever I listen to them playing this game, the Would You Rather gets stuck in my head and I find myself pondering a bunch of different things.
Here’s one for you today: Would you rather take a 10% cut in pay or watch the company lay off 10% of its employees? How about if you were likely to be in the 10% to get the pink slip?
In today’s economy the one thing you can count on is that someone is going to draw the short straw. If you would rather float than sink, you might want to join in a round of the Would You Rather game.
Would you rather have that hefty car payment on a snappy new car or own your early-model outright?
Would you rather have a snappy new purse to go with your outfit or be able to buy another week’s groceries for your family?
Would you rather knock a year off your amortization or take that vacation to the sunny south?
I’m not judging your answers. You’re the person for that job. But playing the Would You Rather Game can help to set things in perspective.
You can use a model like Stephen Covey’s matrix in his book First Things First to help you decide where your priorities lie.
First, grab a piece a paper, make a big box and then divide the big box into four equal smaller boxes by putting a vertical and horizontal line down the middle.
- Label the top right hand box “Important and Urgent”
- Label the top left hand box “Important and Not Urgent”
- Label the bottom right hand box “Not Important and Urgent”
- Label the bottom left hand box “Not Important and Not Urgent”
Now write the things you must do with your money into the various boxes based on your priorities. Paying the mortgage would be Important and Urgent. If you don’t pay that sucker on time, thems gonna take your house away. Ditto making the minimum payments on your debt and having enough money for food.
Saving for a vacation may fall under Important and Not Urgent. These are the things you really want to do or accomplish. But they aren’t make-it-or-break-it costs you must deal with in the here and now. Satisfying the things in this quadrant means managing the next two really carefully.
Your satellite bill, cell phone bill, and gym membership all fall under the category Not Important and Urgent. You’ve made the commitment to spend the money, so you must keep your commitment or risk losing your good credit name. But these are prime areas where cutting back could leave you more room for your top left quadrant.
Buying new shoes, unless they are your only pair or specific in purpose, would fall into the Not Important and Not Urgent category. So would magazine subscriptions, another drill or buying something at your sister-in-law’s home shopping party.
You might find it a healthy exercise to analyze how you’re currently using your money based on these four quadrants. Are you really achieving what you want? Or would you rather being doing something else with your money?
March 5, 2010 at 8:20 am
Oh this debate [the 10 percenter] could get ugly!
These sorts of “negotiations” have tended to go badly where I work. It’s never just 10%. It’s 10% this quarter, 10% two quarters later, 10% the quarter after…
To give you an idea, as of a year ago, we had 11 employees in my division (Director all the way down to an Admin and a Coop student). Today, we have 6 and 2 coop students. The workload is the same (and it was a tough workload to manage a year ago) and morale has dropped through the floor. Word has come through that we’re going to be cut in half again in the next few months. And this is in a public sector department that apparently hasn’t been “shedding jobs”.
So after all this, I would say “refuse the 10% cut and offer to be one of the 10% laid off”. Use the severance to move abroad to start our own business. We’ve wanted to go for a while, but have resisted because of a) a great job here, and b) having to start over anew abroad. When the first one gets taken of, the second one becomes far more manageable.
March 5, 2010 at 8:23 am
In the would you rather section, I’d take the 10% layoff route. I know there would be a chance I’m one of the 10% but I think my work performance speaks for itself, and I think I stand a good chance of surviving the layoffs. On the flip side I could easily sallow a 10% pay decrease, so if my work performance wasn’t as good as it is I’d be siding more to that side.
regards,
Jason
March 5, 2010 at 8:40 am
I agree with Kate. In many workplaces, take a 10% pay cut is just the start and with executive compensation going through the roof, it’s usually pretty hypocritical. Some companies just use it to take advantage of the fear created by the recession. Stick to Gail’s advice – pay down debt fast and build that emergency fund! I’m building mine exactly for this reason – I could be unemployed in 15 months and I want to make sure I have a year’s worth of expenses covered if indeed that happens. If it doesn’t, well, there’s always the next emergency
March 5, 2010 at 8:59 am
Given that I am in the 10% that would be laid off, I would support the 10% reduction. I would also support the 10% reduction if it meant saving the company. *However* there are a few things that I do not like about the business world that would have to change, including gigantic bonuses for top officials of failing companies.
March 5, 2010 at 9:04 am
As it often happens though, what you say you’d rather and what you actually do, aren’t the same. For instance I *used to* say that I would rather be debt free than have nice clothes and shoes. In actual fact I would often put a new pair of shoes on my credit card intending to pay it later. Hence choosing to increase my debt so that I could have nice shoes.
So it is really not until you actually look at your options and conciously decide which you want and then follow through, that you can get the things you want. Thats why I think it was such an important move for me to cut up my credit cards. It wasn’t until I was limited to how much I had coming in that I truly realized the stupid choices I was making and began making better ones.
March 5, 2010 at 9:39 am
Great post! I play this game in my head a lot. Comparing what I want to buy/spend to a month of groceries or a mortgage payment to decide if it matters as much as food or getting out of debt earlier.
To answer the work question, (timely one as my husband just got his pink slip for a month from now), I would chose the 10% reduction in pay for everyone so that no jobs were lost. Let’s ride it through together.
As it is, we are in the 10% to get let go, so he has been diligently applying for various positions (he just found out Monday) and has a couple of interviews today — so fingers crossed!
Good luck to everyone who is going through the same thing.
March 5, 2010 at 9:42 am
My husband is always taking jobs at 85% of his income –note: that’s a 15% pay reduction. It is a union thing with tradespeople, an attempt to keep their workers working, and undercut the non-union companies so they can get a contract. He can usually negotiate in things like travel (non-taxable), gas and a company vehicle, so it doesn’t hurt quite so much. And in a trade where nothing is certain, keeping steady work is definitely a good choice. And, never knowing what your income will be from week to week, month to month, helps to keep your spending in check. And when he works at 100%, it truly does feel like a bonus that we can put aside.
March 5, 2010 at 9:43 am
The 10% equation works like this….guys n gals we want you to take a 10% cut in pay to keep everybody on board
We will have meetings to keep us all updated
Once they get that then its gee we need to layoff a few people to keep inline with our suppliers and contracts and remain competitive.
There is always more to the story.
Then in a few weeks the owner and his wife disappear to some exotic place
And do this even with more frequency.
I know of this in several companies.
The owners sucked the workers in with this 10% s*** and have done more travelling with spouses than ever before!!!
Bet its not all to drum up “world connections” either!!
But the workers are to blame fo everything.
Nero fiddles while Rome burns
March 5, 2010 at 9:49 am
Great exercise to do. I am happy to report I struggled to think of anything we do that could go in the Not Important & Not Urgent box. I guess that’s a very good sign.
I think there’s also a lot to be gained from going back through your Important & Urgent section and reviewing the items listed. Yes groceries belong on this list, but can you reduce your spending though better planning, shopping sales, using up leftovers? Yes paying your mortgage belongs here, but are you living in a much larger house than you need? Is downsizing sensible? Can you rent out a room? How about renting gardening or garage space to someone in an apartment? Just because an item falls into the Important and Urgent category doesn’t mean it doesn’t need to be examined carefully. Nothing on the list should be above scrutiny.
It would also be interesting to see which items change categories over time. Kids sports fees are important to us now, but won’t be on any list in 10yrs when the last one leaves home. Highspeed internet is important at the moment because I work from home, but if my next job requires me to be in the office then the extra cost for high speed becomes unimportant.
March 5, 2010 at 10:14 am
@ John – You sound so bitter! That’s how capitalism works. Owners take the initial risk, and bask in the rewards while exploiting the workers. Owning your own business is not easy nor for the faint of heart but is not without perks either.
@ Jason – I’m with you. My work ethic and skills should be judged on their own merits.
March 5, 2010 at 10:14 am
The “Would you rather?” is great for putting things into perspective quickly. Would you rather buy the one cup of coffee or put the money into the grocery budget? Sometimes though it’s Would you rather buy the coffee to celebrate your wedding anniversary and renew the romantic ties with your spouse or put the money on the grocery budget.
As for the 10% reduction, it’s usually only the first step in giving up a lot more “for the good of the company”. Ha! The management uses fear to take and take. It’s different if the company is loyal to it’s employees like at Stanfield’s in Truro NS. They are a family company that makes warm undergarments. They asked their employees to take a 4 day week instead of 5 so that they wouldn’t have to lay anyone off. They promised they would go back to a 5 day week when the economy improved and they did. If you don’t trust your management, then I would say as soon as they ask for a pay cut, it’s time to get another job.
March 5, 2010 at 10:29 am
Just over a year ago I was in the 10% let go area. There was no discussion, cuts were done and I was gone. I had been there 5 years and it was a huge shock. I am back working in the same profession but for a diferent company. Money is comparable and I work closer to home and the work environment is better. I thought my old company was wonderful but you don’t know any different.
Sometimes forced change is a good thing.
Unless you are paid a huge wage that is much higher than the average person in the area, I would take the pay cut.
Regarding the important, unimportant, urgent and non-urgent squares I don’t have much in the urgent/important categories. Making sure my debt is getting paid down and paid on time is the only important things I have. I will never be a Princess and I am working on making sure my boys never become Princes. LOL
March 5, 2010 at 10:35 am
I would take the 10% reduction in pay if it meant that I received 10% of my time back. Then I would utilize that time to dust off my resume and check and see if there are any better jobs out there, or if I’m happy where I am (I have a pretty plum job frankly) just enjoy sleeping in, leaving early… whatever it may be.
And that is knowing that I would NEVER be laid off — I work for a firm where the owner is “absentee” and I run the plant in his absence, which are more and more frequent. But I can see the economic changes, and a job in hand, is still worth something.
But I did a priority exercise recently (from Gail’s book DFF) and my bf and I have been talking about returning to Vegas for several years now — but the funny thing is, it didn’t make my financial goal list at all, let alone be a priority.
It just wasn’t that important as one of the things I’d rather do.
I’d rather make sure I have an emergency fund,
I’d rather get out of RSP debt first.
I’d rather save for perhaps *not* having to work after I leave this job and enjoying a minimalistic but happy retirment.
I’m actually going to *gulp* cancel my fancy rogers cable perks… no more pausing live tv, good bye NFL network, so long BBC Canada….
Hello walks, hello writing, hello radio…. oh sure, hello CTV, City and Global….
March 5, 2010 at 10:37 am
I should confess that I am giving myself 1 month to say goodbye (waiting for the nicer weather so I can go through tv withdrawl easier)….
March 5, 2010 at 10:53 am
I would rather pay less than 7% on my car loan so Im switching banks Id rather 10% be laid off I do my job well and in my field there is 10% that could be let go and I bet productivity would increase there would be an urgency to get your work done and theres nothing wrong with that. I have enough sinyority that I know mine wouldnt get cut.
I definatly agree with John weve all heard the huge companies that were laying off employees and still receiving HUGE bonus’ COMMON whats less 1M a year??? mabye you would have to not take your jet out to the next town over for your business????
Same with the PM its called Video confrence.. mabye use it once a month and use that money put it towards health care…. it makes me embarrased to be a Canadian sometimes… foolish spending and its not even their money
ONE day
March 5, 2010 at 11:04 am
I agree with Kat. If I were faced with the cut in wages I would take the wage cut and start looking for a new job. I am always handing out resumes eventhough I have a steady job. You never know what opportunities you could be missing by not checking.
March 5, 2010 at 11:23 am
I had a friend in exactly this situation in the tech meltdown in 2002. All employees were asked for a 10% cut. The company executives took the cut too. In the end it all worked out – people who were unhappy with the cut left the company and weren’t replaced (no need for layoffs). Those that stayed had it pay off. Within a year the company was back on track – those employees were rewarded with sizeable increases.
Now it’s a bit like they have two “classes” of employees. Those that stayed through the tough times have stock plans and options. Newer hires were hired at market rates and there is quite a difference between the “pre-meltdown” and “post-meltdown” salaries.
Her company rewarded their loyalty. She has no intention of leaving, she loves it there more than she ever did.
March 5, 2010 at 11:47 am
The 10% thing can work in the public sector, but I’d be wary in the private sector.
The main thing I wanted to share relates to the “Would you rather” game.
The REAL cost of an item is not the money, but instead all the things that you could do with the money.
The wedding doesn’t cost $20k, it costs a significant downpayment on a house, a car or a college education.
March 5, 2010 at 12:23 pm
@Jason, don’t ever believe that your work performance will be what saves you from a layoff. It can still happen. Do you cost more than your peers? Do your peers have a better relationship with your management? Have you ever inadvertently stepped on a customers toes? Are you too low/high on the totem pole? The process of layoffs is not black and white, the standard motto in my (former) company was “Whatever they do, it will be the wrong choice”
March 5, 2010 at 12:49 pm
I’d rather eat dog poo.
March 5, 2010 at 1:15 pm
Last summer our company (not-for-profit) told us to take 2 days unpaid to help with the economic downturn and all salaries (including the Executive Team) were frozen at current levels for the following fiscal year. I had no problems and felt that if that was what it took to keep our staff, I was okay with it. A few people have left since then, I think we got off pretty easy – especially since still received our bonuses as promised for performance in the previous fiscal. We’ve been told that if/when we meet our budget projections at the end of the fiscal we will be reimbursed the 2-day forced holiday and the pay freeze will be lifted AND will still get our bonuses for this year. Keeping fingers crossed … but not holding my breath. LOL
March 5, 2010 at 1:17 pm
@Geoff
Take it easy no need to be so judgemental but since you did..
Are you bitter if you know know what goes on?
Or naive to have closed eyes?
You must have lived a sheltered employment environment to comment that its a perk of business to operate like that and a right
Most of these owners go out with their pockets lined at the expense of the little person
They have VERY little risk.
But remember Geoff to be nice to the person falling off the ladder or coming down when you are going up or at the top..you might be next!!
You must be an arch Capitalist
And Yes I have run a business for many years.Thanks
A mild dose of Socialism is better than a harsh does of your Capitalism that you so proudly expouse
March 5, 2010 at 1:30 pm
“Would you rather” can be terribly silly, but is always an enlightening and educational game, even when it’s the kid’s version. Sometimes the gut responses are terrific clues into the personality of the players (including oneself).
My other favourite brainstorming recreation is the “what if” game. As kids we used to say “What if you married a man named Funkle, what would you name your kids?” or “What if a long lost relative left you his fortune but you had to move to Siberia to get it?” (As an adult I could equate that with being offered a big promotion if I would re-locate)
or the best game EVER…. “What if you won the lottery tomorrow? what is the first thing you would do? (quit your job/leave your spouse/go skydiving?) Who would you share it with? (parents, siblings,close friends and charities? Or no-one?) and where would you live? (close to family, somewhere warm, NYC?)” That last one is good because it helps prioritize what I find important RIGHT NOW. And the excercise usually gets me back in contact with my most cherished friends and family, gets me thinking about volunteering for my favourite charity, and puts me on track to reaching my millionaire priorities without waiting for the unlikely winning set of numbers. If these things are important to you if you won the lottery, there is nothing wrong with making movements in that direction now.
I love the “What if” game and the “Would you rather game” … gets the juices flowing!
March 5, 2010 at 1:33 pm
The 10% also applies to prices, like oil. Remember when it was $0.70 per L and then it jumped because of hurricanes? Really, we’ve never had hurricanes before? That was just their excuse for seeing how much we would pay for oil and it appears that you can raise the price 100% and no one will revolt.
March 5, 2010 at 1:45 pm
I would rather give up 10% of my pay if it saved some of my coworkers from being laid off. But only if I worked 10% less time; I don’t know how happy I’d be if I was asked to lose 10% pay and work 100% of the time.
Some of those who would potentially be laid off may need their jobs more than I do and might be financially and emotionally devastated if they were let go. Not everyone can find another job right away, especially if they’ve worked at the same place for a long time and find the prospect of looking for a new job daunting.
I, on the other hand, have moved around a fair bit to advance my career and if I wasn’t happy with a 10% pay cut I would make the choice to look for another job.
March 5, 2010 at 2:19 pm
Wow, there are some bitter comments out there. It is amazing how one bad apple sets the tone. There are many companies where there are pay cuts, and or layoffs to try to save the company, and the owners are not raking in the profits. Amazingly enough, some people lower on the totem pole have been earning too much money for the job that they do. Many people are not very productive, and yes you could probably wipe out half of some departments and still get the same amount of work done. I know that all situations are not the same, some people are doing a tremendous amount of work and then are asked to do more, but I don’t think that has been the norm in the good years that we were having. People got used to having it really good, for not a whole lot of effort. Luckily in a recession sometimes you can purge those people. Keep the cream, and then reward them when times change. If you think the owners are the ones raking in the cash why don’t you do it yourself? Quit your griping and actually do something about it. Be a business owner and tell us your success story from an exotic locale when you make it big.
March 5, 2010 at 3:03 pm
This blog today reminds me that I need to update my resume. No expected problems in the future, but you never know. I’m in a position of being a productive employee but lower in seniority to some very unproductive, higher-paid people. But if layoffs happen, I’m pretty sure I’m gone. Not a foresightful way to run an organization! I guess that was off-topic… I would rather drive a crappy old car then make payments on a debt-burden any day. However, I would rather spend $100 a month on “dates” with my spouse than put that money on my line of credit debt. You have to live a little bit.
I agree with, Lisa, about the tone. It usually works to just ignore the trolls (ie, people who comment in an argumentative and confrontational fashion – often characterized by personal attacks on other commenters), as they tend to get bored and go elsewhere when their comments are not responded to.
@Geoff, I appreciate and often look for your comments on Gail’s blog because they are thoughtful and practical and add something to the discussion.
Great blog as usual, Gail!
March 5, 2010 at 3:14 pm
I have owned a business for many years
@Lisa your quote..”many people are not productive”
Wow in your place?
Are you always productive?
I know everyday i have not always been 100% productive but then I am not perfect either.
And I have unfortunately found to have to collect from many owners of businesses, pillars of the community, that while many are good there are quite a few that aren’t so good at paying bills
Having been in the business of installing necessary and mandatory safety devices its just amazing how these owners don’t want to do it or defer it or will try to lie or cover it up
True not all are that way but way more than some here care to know about..till their loved one gets injured or its them who has the issue then they’d be up in arms.
March 5, 2010 at 3:30 pm
@Kat, if you get one of the newer ‘digtal’ antennas, you’ll likely get a few good clear channels on TV. We had a basic set of rabbit ears, that got us 2 clear channels, then we upgraded to a $4 digital antenna, and the difference is huge to us – 6 clear channels. That little surplus store gadget saved us getting cable, which would have cost us at least 75X more over a year. Plus, when we move, we can take it with us at no extra cost.
If it was my current job asking for a 10% pay cut, I’d rather walk, since I am not in a job I like, and they do not give me enough hours.
March 5, 2010 at 3:40 pm
I would take the 10% reduction in pay. Not because I necessarily want to help my co-workers, but because I want to help myself! Very selfish, I know, but it’s true… In my profession people don’t get fired. It takes one heck of a lot to get ‘kicked out’ of the military, primarily because you are under contract, and if you have done something bad enough to warrent this action, it can take upwards of a year or more. But we are severely undermanned and I can tell you that it is physically impossible for one person to do the job of 4. I know because I’ve had to do it.
So, when you’re voting to have 10% of your workforce fired, just keep in mind who is going to have to do their work. Management will expect everyone to buck up and do the extra work for no extra pay. Which is better? Ultimately it turns into the question of would you rather the added stress and hours at work just to keep the same pay, or tighten your belt for a little while until it all sorts itself out.
March 5, 2010 at 3:47 pm
@Sharon Thank you — I’ll keep that in mind. I’ll be going from the deluxe version of 100++ channels… so I think going from that to 6 might be a little too challenging. But maybe I will find that I don’t miss it too much
I hope to still get PBS though…love watching Nova.
March 5, 2010 at 9:57 pm
The pay cut vs. layoffs question is very contextual. We’ve had layoffs at the company I work for. At the time I was very upset; it was my first layoff experience, and half of my team was laid off, leaving me with more stress and responsibility. But with more experience and perspective, I can see that the people laid off (at least the ones I knew) were underperformers. Sometimes pruning the workforce can be a good thing long-term. Now we’re hiring again, and the spots that were taken up by dead weight can now go to more dynamic people.
That said, the fact that our CEO’s bonus would have been more than enough to pay the salaries of those he laid off did not go unnoticed. I was never much of a company loyalist, but I’m even more determined now that I won’t make personal sacrifices for an organization that clearly does not value its employees. If they asked me to take a paycut, given that I’m in a position to go a year or more without a job if necessary, I would (politely) quit.
March 6, 2010 at 9:33 am
I would take the 10% reduction in pay. Not because I necessarily want to help my co-workers, but because I want to help myself! Very selfish, I know, but it’s true… In my profession people don’t get fired. — says Sophie…
The fact is, we have to look out for ourselves, and do the best decision for US… And if we, as employees are looking out for number 1, why do so many people resent the fact that so are their employers?
At my place of work, we were told that if everyone started turning off their lights (when they’re not in the room) and their computers at night, we could save an employee’s salary — oh sure, people started doing that, but then half turned around and bought themselves refrigerators and cappucino makers for their “offices” because they felt they ‘deserved’ the convenience and extravagance; screw the idea of saving someone’s salary.
And people that whine over lay-offs and a smaller vacation bonus etc, should just live the life of a tradesperson (non-self-employed)… you don’t get paid sick days, you don’t necessarily get to choose your ‘vacation’ and you live day by day, week to week and month to month. I am not complaining about it, it sure does teach us to budget, but the salaried people who know what they’re making every year, and still can’t make ends meet or build a savings plan for the ‘just in case’ are just simply spoiled and think their entitled to their steady lives — grow up! You can’t take ANYTHING in this world for granted.
March 6, 2010 at 5:24 pm
Moi – thanks for the funny in between the serious!!
March 6, 2010 at 9:48 pm
@ Tlily – thanks! I try.
@ John – I’m sorry you thought I was being judgmental. I just thought that your initial posting indicated you were very bitter about your employment experiences, which your subsequent postings confirmed. We obviously think very differently and have had different experiences which have shaped our outlooks.
March 7, 2010 at 11:27 am
No problem at all Geoff!!
I have been out in the trenches for many years in my own business installing under several licenced trade dictums and working for employers doing the same.
Going in and out of modestly put…hundreds of places..you see quite a bit that way, not just 4 walls,floor and ceiling or 1 or 2 workplace(s)
I just didn’t want people to only obtain one side of the equation
PS I respect our agree to disagree
March 7, 2010 at 12:54 pm
I would take a 10% cut if it means helping some of my co-workers to keep their jobs (especially those with families) as I can afford it now – but, it really speaks to where you are in life when these situations arise. Many years ago, my ex-company started having some financial issues, morale started to tank and ppl were getting worried that one day they would arrive at the office locked out. I decided to ask my boss directly, “should I look for another job”. I got no answer (which was for me the answer “to hit the road”). I had to look after my own interests (had a mtge to pay) and not wait around thinking my job was safe. The company survived but I couldn’t take the chance at the time that I may end up unemployed and scrambling for work competing with my co-workers for the same job! I started at my current company on a 3-mth contract. Fast forward – it’s been 15 yrs now. Thankfully, they operate on a pretty lean skeleton so we haven’t seen any “thinning of the herd” – although they do have the ability now to simply hire on contract as it is an employer’s market.
June 19, 2011 at 2:03 pm
I would rather get a firm grip on my finances, and be tight, than having no idea what my spending is like.
August 7, 2011 at 5:20 pm
If I was playing the Would You Rather game, I would rather be disciplined and save up money.