Have you ever taken a job without negotiating a higher salary or failed to ask for a raise when you knew you deserved one? Have you ever failed to raise your rates because you were worried what your clients would think, or underbid a job because you wanted your client to like you? If you answered yes to any of these questions, you may be an underearner. “Underearning” is the pattern of earning below your potential, of consistently not making enough money. It creates stress and resentment and it affects the quality of your life. And over your lifetime, it can cost you hundreds of thousands of dollars.
Many women identify with the struggle of not earning enough money, let alone achieving their earning potential. And while it is true that gender discrimination is alive and well, sometimes women themselves are the culprits, struggling to ask for what they hope they are worth.
When I first started my practice as a financial recovery counselor and money coach, I expected to encounter behaviors such as compulsive spending, debt overload, and financial conflicts in relationships. And while these are definitely big issues, I also saw that many women were undermining their financial security by consistently not earning enough money. These were not women being victimized by outside forces. Instead, they were victims of internal forces. I kept encountering situations where the beliefs of some women were getting in the way of their making more money.
Not making enough money dramatically affects women and the lives they can lead. It affects what they can and can’t do, now and in the future. It is imperative that women understand why they undersell themselves and gain the practical tools to earn more money. The good news is that I firmly believe it is possible to make more money—it is possible to earn at one’s potential!
Fighting Perfectionism
The most common ways that women underearn is that they fail to ask for a raise or negotiate their initial salary. Self-employed women struggle to set their initial fees at a competitive rate and commonly don’t raise their rates often enough or high enough. Part of the dilemma is that many women are waiting to be “perfect” before they ask for more money. Patricia Smith, in her book Each of Us, How Every Woman Can Earn More Money In Corporate America (1998), discusses a fascinating study that documents how men and women react differently to a job posting and the decision to go for an interview. Women feel they need to have mastered one hundred percent of the skills and knowledge required before they will attempt a job interview. But what about men? Men will attempt an interview even if they only possess forty percent of the skills and knowledge listed in the job posting!
