• Seek better opportunities. Believe it or not, many people actually don't start looking for another job when they undergo pay and benefit cuts. Perhaps it's out of loyalty, perhaps it's out of a hope that their current employer will do better, or perhaps it's because they take one look at 9 percent unemployment rates and conclude there's no hope of finding something else. Whatever the reason, you should look. An employer cutting salaries today could be cutting jobs tomorrow. Also, whatever your employer might say, pay cuts are ultimately open ended. Your employer can promise to reestablish your original pay rate, but who's to say it actually will?
  
• Look for replacement income. If you have a marketable skill, consider finding weekend or evening work that would allow you to drive home some more income. Obviously, working extra hours is not an ideal situation, but it might be necessary for the short term. If you do this work on a contract or freelance basis, make sure to cover your bases in terms of Federal and state income taxes. Your tax rate on self-employed income will be higher, and you might need to pay on a quarterly basis. But the flip-side is that you will also have some additional deductions. Consider involving a certified public accountant that can help you from a tax-planning perspective.
  
• Slash recurring expenses. Start to get crafty when it comes to utility, food, transportation and other regular outlays. Do you need all those cable channels? Can you ratchet down your Internet service to something with lower-bandwidth? Have you explored bundling utilities? Are you clipping coupons? The old saying that if you take care of your pennies your dollars will take care of themselves is very true. Grab your recent receipts, start building a budget, and look where you can cut.
  
• Nuke your revolving debt. If you have credit cards, you need to focus all your attention on eliminating that kind of debt, and guarding against any future run-ups in that kind of revolving debt. At the same time, unless you are in trouble with your mortgage, car payments or student loans, leave those alone. Those forms of non-revolving debt are some of the cheapest money you can borrow.
  
• Lastly, remember that your salary does not equate to your worth as an individual. Americans are a career- and success-driven people, but don't permit your resume or your salary to define your value as a person. Instead, focus on the ways that you can not only survive, but thrive despite any cuts to your income.

If you are looking to buy or refinance your home and want to speak with a local Minnesota mortgage professional.  Please call Jamie Larkin at 651-484-1474 for a free consultation.