Are you an under-earner?

2012-08-07 07:15

If you’re always short-changing yourself, finding your finances in a mess and sabotaging your chances of success, read on.

Michelle*, a 30-year-old freelance writer from Johannesburg, is a self-confessed under-earner. Job-hopping and financial crises have been regular features in her professional life.

She’s not alone.

In a country where the unemployment rate is as much as 25%, under-earning is a reality for many, yet finances are still not discussed socially – especially when someone’s bank balance is emptier than a dry beer hall.

But under-earning is not about taking a few financial knocks – it’s about sabotaging your earning potential, consciously or not.

Michelle, despite having been part of the work force for a decade, is on a downward spiral of under-earning that has led to her crashing on a friend’s couch – with no money to her name.

‘I have very little to show for the years I’ve spent working. I usually quit jobs because I get bored quickly.

Even though I know that I want financial security, I can never commit to something that will guarantee it.

Somehow I find a way to sabotage any progress. When I have the freedom I desire, I don’t have the discipline that would ensure I have regular income.

I’ve also burnt a couple of bridges in my time, so when I hit a point of desperation, I have to go back to those people and offer to work for free just to prove that I am serious this time around.

When I was younger, people had more patience, but now, my mom is refusing to pay for my credit cards and I’m currently squatting at a friend’s place.

This isn’t who I thought I would be at 30. Even though I want a better life, I always find myself messing up when it comes to my finances,’ says Michelle.

The psychology of under-earning
Michelle’s case is one of many different variations of under-earning.

For a New York businessman only known as Andrew, under-earning manifested in his lack of interest in any of his projects when they became even moderately successful.

Eventually, broke and living in a rat-infested apartment, he recognised that he needed help.

While Debtors Anonymous already existed, his problem wasn’t just about debt, so Under-earners Anonymous was founded.

Accurately applied, under-earning is most certainly a symptom of other problems, says Jaqueline Sonik, a Joburg-based psychologist.

‘Undervaluing yourself is a core trait generally present in individuals who under-earn.

Additional characteristics may include co-dependency, as well as being self-saboteurs, with chronic under-earners often standing in their own way.’

Jaqueline says that under-earning isn’t necessarily a bad thing, but constantly doing it can be detrimental.

‘It’s not necessarily a bad idea to take a position at a lower salary than you deserve in order to secure employment or obtain entry into a chosen career path or learning opportunity.

However, when under-earning is based on a negative relationship with yourself and/or money, you leave yourself not only financially, but also emotionally and spiritually poorer.’

Fear of taking risks can also be a cause for under-earning. ‘It is often safer to under-earn, as it does not require risk.

When we undervalue ourselves, we are grateful for whatever we have and receive, which is not a bad trait.

However, when we have proved our worth and value and we are afraid we may not be able to maintain this success, it is easier to accept less than ask for more and have to continue to perform,’ says Jaqueline.

It’s not about the money
One of the main lessons of Under-earners Anonymous is that it isn’t just about money.

While money is the most obvious and visible consequence, under-earning is about underselling and undervaluing your capabilities and competencies.

So while some people’s bank accounts are comfortably sitting on a few zeroes, they may still undervalue themselves, which makes them vulnerable to under-earner tenden-cies.

This is the case for Nicholas Foster, a 40-year-old banker who says that his under-earning is not about not earning enough money. ‘I make a good living and have always been firm about not getting under-paid.

Despite making more money than most of my friends, I often find myself somewhat broke. I splurge on things I don’t need and I’m always the friend who is willing to pick up the bill, even if it sets me back by R20 000 in one night.

While I feel secure in my professional life, I always overcompensate in my personal life and that need to prove myself makes me relate to some of the symptoms.

I’ve also repeatedly done work for friends and acquaintances who don’t pay me. I don’t need the money, but that’s not really the point, is it?’ he says.

Liesl Vogt, a psychologist from Johannesburg, warns that under-earning can lead to problems in other areas of your life.

‘You can be an under-earner in various ways, for instance giving more than you ask for in relationships, or allowing others ahead of you instead of putting yourself forward when you need to.

It affects people occupationally, educationally and socially – it impacts on all levels of functioning,’ she says.

Liesl adds that people’s view of money can also affect whether or not they view themselves as under-earners.

‘If you don’t see money as a motivator in your life, then it’s very unlikely that you would even label yourself as an under-earner.’

Crunch control
Under-earning in all its forms is linked to the deeper issues of self-confidence, self-esteem and self-respect – which needs to be healthy and intact to function optimally in life and live, rather than merely exist, says Liesl.

‘Take a long, hard look at yourself and understand your motivations for putting up with your situation. Often therapy, counselling or coaching can be helpful if friends or family are unable to help you look at yourself and your situation objectively,’ she says.

Jaqueline also suggests working on your feelings of self-worth. ‘Trust that you are worth more. Build your self-esteem and develop negotiating skills.

Re-view your relationship with money, understanding the value you attach to it, as well as how you manage it.

A healthy relationship with money means not only believing in your ability and what you deserve, but also successfully managing the money you do have.’

* Name has been changed.

» Check your worth

If you identify with this checklist, you could be on the road to under-earning.

» Not using your time effectively to work towards your goals and wasting time on things you know won’t amount to anything. This includes procrastination and missing important deadlines.

» Undervaluing and under-pricing your work and time come at a high price. This includes not asking for promotions that you deserve, because you don’t want to appear as though you’re asking for too much.

» Losing track of invoices, not keeping records of the work you’ve done, not following up on profitable opportunities and often being unsure of exactly how much you will be getting paid, are signs that you are undervaluing yourself.

» Constantly seeking approval even after you’ve demonstrated your competence. It can stop you from focusing on how you can move forward and can also lead to your skills being taken for granted, since you’ll take on more than you can handle in order to get approval.

How to deal with under-earning
1. Look at your beliefs about money. Identify what your issues are surrounding your finances. You can only tackle your problem once you know what’s causing it.

2. Research your peers’ salaries. Find out what people in similar positions earn. Compare it with your income an

d ask yourself honestly why your earnings are less.

3. Spend money to earn more. Look into investing in a business consultant to help you build your business and price your services.

4. Value your time. This will not only help you use your time effectively, but also help you plan better.

5. Develop a solid action plan. It should include addressing your under-earning by identifying your financial goals and taking steps to achieve them.

6. Meet with a financial planner. Since you have a history of not handling your finances or understanding the psychology behind money, seek help from a professional until you are able to handle it yourself.

7. Read. One of the best books about under-earning is Barbara Stanny’s Overcoming Underearning: A Five-Step Plan to A Richer Life (HarperBusiness).

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