Under-earning as a Cause of Debt

When two members of a Debtors Anonymous support group met with me to go over my financials and see where I could cut costs, they discovered I had already trimmed expenses to the bone and there was nothing left to shave off. The conclusion was that I was under-earning and needed to find work with better pay or get additional revenue to my present income.

I realised I needed to make some drastic changes if I wanted to stop under-earning. It wasn’t easy. On one hand, I found it hard to ask for what I was worth; on the other hand, I was the only one who could change the course of my financial destiny.

I had been volunteering on a peace and reconciliation project for youth, in a war-torn part of Africa. Any funding I received for the project, I applied to the project without allotting funds for my own living expenses. That was well and good but hardly sustainable. Without getting the personal support to advance the project, I had to make the hard and painful decision to halt the project. Proposals my volunteer team and I had sent out in order to garner interest and funding fell flat.

It became pretty clear that I had to put an end to the volunteer work in order to take care of my own financial needs. The school where I had been teaching summers, in order to pay for my months in the field in Africa, had been very supportive. Now I approached them to work full-time. They didn’t hesitate to take me on and they also gave me the raise I asked for.

Most of what I earned went to pay off my debt and once I was out of debt, my income grew into a positive credit balance. Under-earning may be the reason why you are chronically in debt and is an area that may be worth exploring. It is more prevalent among women than among men. Men have traditionally garnered higher income, especially as independent business owners. Most are not afraid to communicate what value they bring to their potential customers and what they, therefore, expect to be paid for their services or products.

As employees it is likewise important to communicate the expectation of a raise whenever yearly or bi-yearly performance reviews and evaluations take place.

I watched a TED Talk, where Casey Brown started her talk by stating: “Nobody will ever pay you what you are worth”. That caught my attention. Brown explains that by insisting on getting paid according to the work or services rendered, you’ll command respect and better income. Listen to what she has to say:
Casey Brown, “Know your worth and then ask for it” (approx. 8 minutes)

Assess whether you are one of those people who habitually under-earns:
1.Estimate how much you will need to earn in order to improve your financial situation beyond paying for your basic living expenses
2.Prepare a strategy you will use to communicate this change – you can go back to Casey Brown’s talk and get some ideas
3.Practice what you will say i.e. to your superior at work – depending on the kind of work you are doing this may not be an option. In such case, you may want to look for additional work or for different work altogether. If it means upgrading your skills, then consider doing so, it will be a valuable investment.
4.If you’re self-employed, prepare a communication tool to persuade your clients to pay for your services/products because of the value you/they bring to the table.

Fear of rejection or failure may be the first stumbling block that you will need to overcome. This will require practice and support from others. The benefits of improving your financial future, however, far outweigh the perceived anxiety!

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