Are You Charging Enough?
Updated: Jul 16, 2019
At my SIMPLY MONEY seminar, I was talking about how women are generally not making enough money to take care of themselves. A woman quickly raised her hand and said she felt bad charging her clients. She was working with mostly individuals and she didn’t want to charge them too much money. I won’t go into too many details, but this woman offers an incredible and very valuable service. She has every right to charge high rates and not feel bad about it. I then asked her if she had enough saved in her emergency savings account, if she was contributing to her IRA or had enough saved for a down payment. The purpose of these questions was not to make her feel bad but to make sure she was taking care of herself first. One way to do this was to charge more for her services.
A recent study of 25 to 68 year-old females by Harris Interactive for Prudential Financial said that maintaining their lifestyle when retirement is very important but few are confident that they will be able to even do so! One way to get around this is to make sure we are earning plenty to retire on. A post in Daily Worth about the Princess Problem really struck a cord with me, especially since I have two little girls. “Young men are four times more likely to negotiate their first salary than young women, resulting in $500,000 more in earnings by age 60." Let’s remedy this situation.
So what can you do given the economy is still down in the dumps and all we read about is the joblessness problem?
If you are starting a new job (I know some of you are!), be sure to ask for a little more money than you had originally planned when you are negotiating your salary. A few thousand dollars is not going to make a huge difference but at least you are starting off at a higher position. Check around your company and see if are there any open positions or promotions. Even if there aren’t now, be sure to do this every month. Set an alarm to remind yourself. Companies tend to hire from within and you want to be sure you are available for this new position.If you are self-employed and are submitting a proposal, increase your fee by at least 5-10%. Chances are you are undercharging anyhow. If the client wants to negotiate, keep your fee but throw in more services. If you charge by the hour, increase your hourly rate by at least $10. It is such a small amount but adds up after a short period of time. Be sure to raise your rates every year. Network smarter. You might have exhausted your network (i.e. Paying clients). Attend new events or call friends you haven’t connected with in a while.