Make More Money!

Originally published in the Seattle Woman Magazine, January 2006
by Mikelann Valterra, MA

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 100 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 40 percent of the skills and knowledge listed in the job posting!

Even if women override their internal need for perfection and attempt the interview anyway, they will actually spend time in the interview telling their potential boss things like “I know you wanted five years experience, but to be honest, I only have three.” Or “Just to be clear, I know you wanted advanced Excel skills, and my skills are really intermediate.” Men would never think this necessary, or even appropriate. So you might ask yourself: Are you waiting until you have more experience, the next credential, more clients, a new service to offer, a certain skill you need to master? In essence, are you waiting to be perfect? Because if you are waiting to be perfect before you ask for a higher salary or raise your rates, you will be waiting a long time indeed. Practice telling yourself this: “I’m good enough right now to make more money.” Stop the waiting.

The Good Girl Syndrome

Women are very relational. This is a wonderful thing. But we must ask ourselves, is our desire for relationships interfering with our ability to take care of ourselves financially? When you fall prey to the “Good Girl Syndrome,” you want everyone to like you and you don’t want to make anyone mad. Sound familiar? Many of us struggle with this, both inside and outside the workplace. But if you are overly concerned with your boss’s feelings or the ramifications of asking for a raise, you will hold yourself back. The fear of “rocking the boat” keeps many women from asking for their true worth. Here is another great question to ask yourself: “Am I willing to inconvenience the people around me?” Asking for a raise or raising your fees might not be convenient for everyone in your business life. Are you willing to inconvenience someone to make more money? Are you willing to put yourself first? Trying to be a “good girl” has kept many women from making the kind of money they deserve to make.

Noble Poverty

Some women believe, often subconsciously, that good people don’t make a lot of money. And if they did ask for more money, they fear they would be thought of as greedy. These beliefs stem from the notion that it’s better to be “good and poor” than “rich and evil.” While it sounds extreme, many women have a conflicted relationship with money and spend a lot of energy declaring that money is not the most important thing in their lives. While this is true, it’s time some of us elevated the status of money in our beliefs. How many of us have conflicted feelings about the wealthy? Many people believe that the wealthy are greedy, insensitive and feel superior to other people. There are several problems with this belief; one being that it makes it highly unlikely you will ever have a lot of money yourself. Why would you allow yourself to be seen as greedy, insensitive or superior?

Our subconscious beliefs have a tremendous impact on our ability to consistently stay focused on our earning power. A wonderful exercise for people who struggle with noble poverty is to begin looking for positive examples of wealth. What do you value? If you value early childhood education, for example, search out the wealthy who donate in this arena. Identifying positive role models around wealth can do wonders for changing how we feel about the possibility of wealth in our own lives.

The Cost of Not Asking

Linda Babcock, an economics professor at Carnegie Mellon University, set out to quantify the cost of women not asking for what they need. What is the actual cost of not negotiating? In her fascinating book, Women Don’t Ask, Negotiation and the Gender Divide (2003), she details the impact of negotiating a salary one single time. Pretend that an equally qualified man and woman receive job offers of $25,000. The man negotiates his salary up to $30,000, and the woman quietly accepts the $25,000. That’s it. Now let’s say that neither of them ever negotiates again. They get 3 percent identical raises every year throughout their careers. By the time they are 60 years old, the gap in their annual salary is more than $15,000. (She is now earning $76,870 and he is earning $92,243.) The startling fact is that he has been earning extra money all along, from that original one-time negotiation. So 38 years later, he has earned $361,171 more than she has over the course of both careers!

Does this difference shock you? Remember, it derived from a one-time negotiation! Seeing and realizing this difference can give you the incentive to start taking care of yourself financially. But be mindful that another thing that stops women from negotiating on their own behalf is what experts call the “fairness gene.” Women have a sense of fairness, which makes them think everything in life should be fair. I wish everything were fair, too. In a fair world, you would work very hard, be noticed by your boss and be given a raise and a thank you. But in the real world, you must toot your own horn and ask for what you need. Remember, you get what you demand, not necessarily what you deserve.

The Self-employed Challenge

Self-employed women face an especially difficult task here. They must actively tell people how much they are “worth” on a daily basis. There is no one who sets their rates for them or tells them what to do and what to charge. Therefore, they must believe in their gut that they are worth making good money in order to state their fees comfortably. If these women set their original fees too low, they will face a continuous struggle to get them up to market rate. Women in private practice, be they lawyers, therapists, or other independent professionals, must raise their rates regularly, and by enough money each time so as to not fall behind in their earning power.

Doing the Research

There are two phases to asking for more money, and the first phase is doing the research. Would you ever buy a car without looking at what similar cars were going for? Probably not. So take some time in front of your computer and do a little research. Start by visiting www.salary.com, and play around with job descriptions that match or overlap what you do. For other sites, go to Google and type in “salary survey.” Within an hour you will be shocked at how much you know. The goal is to earn at least the current market rate for your position, and ideally higher. What did you find? A lot of women get in touch with their anger in this phase because they realize they are indeed underpaid. This anger can be great fuel for getting up the gumption to ask for more money. (And yes, it is acceptable to bring printouts of your research to a meeting with your boss!)

If you are self-employed, research is still imperative. Surf your competitors’ Web sites. Some will have their rates listed. Many will not. But this is a great function of networking. Many colleagues will share their hourly or package rates with you when you ask them privately. It is imperative to know what your competitors are charging!

After you’ve done your research, spend some time thinking about what you’ve done for your employer or clients. Have you made them money or saved them any money in the last year? Have you streamlined any processes, or contributed some great ideas that they acted upon? Remember, now is the time to toot your own horn. What is so fabulous about you?

Asking for More

If it’s been 18 months to two years since you’ve had a merit-based raise, or raised your fees, it’s time to ask for more money. After you’ve done your research, set up a meeting with your boss to “discuss your compensation.” This is where you tell them what you want and make your case. There are three questions you have to answer for yourself first. 1) What do I want? What exactly am I going to ask for? A 10 percent raise? More vacation time? 2) Why do I deserve it? Can I make my case as to why I deserve more money? 3) What is my bottom line? This last question is critical. What do you need to make to be compensated at the level you need and deserve? At what point are you willing to walk away, or make a private decision that it is time to start looking for a new job if your employer can’t meet your bottom line?

Remember, negotiation does not always work. We don’t always get what we ask for. (If we knew we’d get what we wanted, it would be so much easier to ask.) But if you start asking for what you need on a consistent basis, you will win enough of the time to make a major difference in your finances. I encourage people to consider it a success if they step up and ask for what they need and want. The result will be what it will be. But by putting yourself out there and asking, you are taking care of yourself and putting your needs front and center.

If you are self-employed, send a letter to your clients telling them you are going to be raising your rates. Don’t apologize. Thank them for their patronage and assume they will continue to do business with you. And remember, if you do lose some clients, you are creating room for new higher-paying clients to come your way!

Getting in Touch With Resentment

Years ago, I was asked to lead an all-day seminar in a far corner of the state. When asked “How much do you charge?” I was unsure, and told them I would get back to them the next day. I called my mentor, Karen McCall, and asked for her advice. I wanted her to give me a number. I wanted her to tell me what to do. But she wouldn’t do it. Instead, she said, “Mikelann, what do you need to charge them in order to not resent doing the work?” This single question sent me into deep thought. At the time, I had a full practice, a small baby and a husband I really liked (I still do!). Leading the seminar would have meant I was out of my office all day, and away from my family. As I meditated on this, I decided what I would have to charge in order to not resent doing the work. I called the seminar organizer back and gave her a number that was double my “resentment number.” She didn’t even balk!

Many women currently are earning below their resentment number and are feeling badly about it. They resent working with certain clients that don’t pay them enough. They resent working for an employer who undervalues them and underpays them. This resentment can build day after day, and can lead to depression. So ask yourself, “What do I have to earn in order to not resent doing this work?” If you really meditate on this, you will arrive at the right number. While this can be a difficult exercise, particularly if you are earning below your resentment number, it is far better to ask this question now than five years from now. It is time to get in touch with your resentment and take action. It is time to ask for more.

I believe it is possible for many women to make more money. It is time to step up and ask, putting our needs front and center. The cost of not taking care of ourselves is too high! Stop waiting until you are perfect to advocate for your needs. You are good enough right now to make more money. And while we may desire to not rock the boat, there comes a time when we have to put ourselves first. Abundance is within reach!

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