Are you an underearner? You may be surprised.
An underearner is someone who earns less than she needs or wants despite her efforts to do otherwise. A six-figure salary doesn’t exclude you. It’s a widespread condition affecting millions of Americans, especially women.
I was a chronic underearner most of my life. As the daughter of the “R” in H&R Block, between my father, and then my husband, there was always lots of money. I didn’t care about making it; I just wanted to spend it. Until my wake-up call, when I found out my husband was a compulsive gambler who lost huge sums of my money. After our divorce, he left the country, leaving me with gigantic tax bills I couldn’t pay, and my father refused to loan me the money.
That’s when I knew I had to get smart about money—making it and managing it. As a journalist, I started interviewing financially successful women to find out how they did it, and if I could do it, too. From those interviews, I not only discovered five steps to earning more money, but I started making six-figures before I finished writing my book, Secrets of Six Figure Women.
If you consistently follow these five steps you will not only become richer but—and this may be even more important—you’ll likely have greater peace of mind and feel more empowered in every aspect of your life.
1. Tell the Truth
Begin by admitting what’s not working in your life and analyzing why. There’s tremendous power in telling the truth. Clarity alone often generates change. Until you stop denying or diminishing your difficulties, you can’t possibly do anything differently. Your first peek at the truth may evoke temporary panic. Situations can rapidly improve once you take off the blindfold.
2. Make a Decision
Nothing will happen until you make a conscious, committed decision that your financial success is a pressing priority. A decision is not the same as a want or a goal. While a goal denotes the desired destination, a decision implies the determination to reach it. The beauty of this step? You don’t need a plan all figured out. All you have to do is decide what you want and do what comes next. Decisions are like magnets. They attract opportunities.
3. Stretch Yourself
Those opportunities, however, always lie just outside your comfort zone. Success can only be achieved by stretching beyond what feels comfortable to what may seem impossible. The stretch looks like this: feel the fear, endure the discomfort, observe the resistance, and go for it anyway. Keep in mind: the discomfort is short-lived, but the rewards are life-changing.
4. Create Community
The people you hang out with radically affect your ability to succeed or not. Underearners tend to operate in isolation or gravitate to pessimists, worrywarts, and negative folks who want to hold them back. High-earners, however, surround themselves with people who cheer them on and inspire them to aim higher. How do you find a supportive community? Join organizations where you’ll meet the kind of people you want to be, not who you’ve been.
5. Respect and Appreciate Money
Overcoming underearning isn’t limited to pocketing a fatter paycheck, but to achieving financial independence. Financial independence does not come from what you earn. It comes from what you do with what you make.
There are four rules for respecting money:
• Spend less (only buy what you can easily afford)
• Save more (pay yourself first)
• Invest wisely (put money in assets that grow in value over time)
• Give generously (use your money to make a difference)
No matter how sizable your salary, unless you adhere to the first three rules, you’ll find that money will exacerbate your stress rather than enhance your well-being.
The whole point of Overcoming Underearning® is not just to earn a good living, but ultimately to live a good life and help others do the same.
Barbara Stanny is the author of five books, including Overcoming Underearning®: A Five-Step Plan to a Richer Life, Secrets of Six-Figure Women: Surprising Strategies to Up Your Earnings, Change Your Life, and Prince Charming Isn’t Coming: How Women Get Smart About Money.
© 2012 Omega Institute for Holistic Studies