Are you an underearner? The general consensus for increasings savings in financial advice circles is to rein in your spending, since the expense side of the equation is easier to manage than the income side. You can cut back your spending on cable television by 50%, but getting an equivalent 50% increase in pay is more difficult.
If you are an underearner, this might not be the case. You may have already reined in your expenses, but you’re still not making much headway, even though you’re working hard. An article in MSN Money explores this topic.
Do you have these traits?
* You talk about your life as if you’re trapped or have no choices.
* You underestimate your worth; you often give away your time, experience and skills for free.
* You crave the “comfort zone” and are controlled by fear.
* You’re vague about money, often not knowing exactly how much you make or owe or own.
* You’re “anti-wealth” and have negative attitudes about people with money, viewing them as greedy, snobs or workaholics.
I know I match the first two on the list, and maybe the fifth depending on my mood and the news cycle. Number three doesn’t make any sense to me and it should be obvious to my readers that number four doesn’t apply. I’ve got great skills and most people would consider me quite intelligent, yet I’m in a dead-end job at the moment. I’ve been trying to do something about that, but it’s been rough. I know I’m underemployed and I should have the responsibilities that go along with a job making perhaps twice what I’m earning now, but it’s been hard convincing others of that.
How about you? Have you ever been an underearner? The first piece of advice the author in the article gives is to change your mindset — and start charging more for your services. That may be a good start, but it doesn’t control the day job side of income. If you were an underearner, how did you improve your situation?
Published or updated January 30, 2006.