When a business is struggling, it has to make big changes to keep operating. As opposed to laying off employees, the company may choose to administer pay cuts either to a couple of departments or across the board to all employees.

You don’t have to accept a pay cut. However, refusing it may leave you out of a job. Depending on the job market (which is not that promising at the time of this article), it may be better to take the pay cut rather than put yourself at risk of long-term unemployment.

Evaluate the extent of the pay cut. Your boss may tell you the amount of the annual salary cut, not necessarily the weekly or monthly pay cut. So, you’ll have to calculate to see how much lower your new pay will be versus what you’re using to being paid. Just divide your annual salary by 12 to get your monthly pay, 24 or 25 to get bi-weekly pay, or 52 to get your weekly pay.

Find out how long the pay cut will last. You may not be able to get a concrete answer, but you need to know if the company foresees being able to raise wages again in the near or distant future.

You’ll also need to know when the pay cut becomes effective. That way, you know how soon you’ll have to make the necessary adjustments to accommodate the lower income.

Will you be able to pay your bills out of the pay cut? Perhaps the most important consideration is whether you’ll still be able to maintain your current lifestyle with the new, lower pay. If you can’t afford all your bills with the new salary, can you cut out some expenses so you can cover everything with your new pay? Don’t forget to factor in your spouse or partner’s income.

Find out if the pay cut affects your benefits. Don’t assume the pay cut will only affect your take home salary. Your health, retirement, and vacation benefits may also be part of the company’s cost-cutting efforts. Be sure you know how these will be affected, if at all, especially if your work hours are reduced.

Is there room for negotiating? There may be some wiggle room with your pay cut, just ask your boss. For example, you may be able to get additional vacation time, the ability to work from home, or other company perks.

Make sure it’s not just you. Find out how many employees are affected by the pay cut. Is it just you or your department or does it apply to the entire company? Your boss can’t give you specific salary information for other employees, but he or she can let you know the extent of the changes. If you suspect discrimination, consider speaking with someone in human resources.

If you decide to take the pay cut, realize that you’ll probably have to make some changes to your monthly spending. Review your budget as soon as possible to decide which things you’ll need to cut to make the new income manageable.

Once the pay cut becomes effective, work to fit your expenses within your income. Avoid pulling money from savings or relying on your credit card to make ends meet. These tactics aren’t sustainable in the long-term and will probably make things worse when you run out of money and room on your credit cards.

Don’t mistake the pay cut for job security. Accepting a pay cut down doesn’t necessarily mean you’re not at risk for being laid off in the future, especially if the company’s financials don’t improve. It’s even more reason to keep your resume up to date and to work hard at putting money in an emergency fund.