When you make more income, either from a promotion at work or from your business, do you have negative feelings of guilt or shame?
Earning more money can feel gross. It should just be exciting! But so often, being “rich” is associated with greed and many of us feel unworthy of being “wealthy”.
Everyone's definition of rich and wealthy looks different. But what does being rich mean to you? What about being wealthy?
While everyone from all walks of life can struggle with negative emotions when it comes to earning more money, women in particular struggle with this. It can impact how many promotions you receive at work, or how much revenue your business is bringing in.
If you’re worried about the promotion putting you in a new tax bracket, you may self-sabatosh, despite being the best fit for the position.
Or if you’re an entrepreneur, you may subconsciously under value your services because you’re afraid of a massive tax bill. Alternatively, you may feel guilty about charging people for a service that you’re passionate about and feelings of guilt creep up when it comes time for you to scale your business.
Whatever the reasons may be, know that millions of other people have dealt with the same thoughts and feelings. But ask yourself this question: Should I really let feelings of guilt or fear hold me back from reaching a new level of income?
The answer is no!
Your hard work deserves to be acknowledged with that promotion and subsequent raise. Your expertise and the intangible value you provide clients should be recognized and compensated.
Your mindset and cultural pressure are two of the most impactful factors you need to work with in order to stop feeling guilty and start feeling confident about increasing your income.
However, there are practical steps you can take to remove those negative thoughts and emotions, as well.
Personally, I’ve had a rollercoaster of a journey towards feeling confident about pricing my services. My first job started me off around minimum wage and from there I consistently increased my hourly rate and/or salary every six to 9 months or so for over a decade - with the exception of strategic internships. Throughout my time navigating through first jobs, salaried positions, freelancing and service-based business ownership, I often felt guilt about asking for any money.
However, I then learned the power of calculating the intangible value you bring to the table. If you’re in a corporate position, are you just accomplishing your required tasks or are you a support to the team or even the company’s clients? If you’re a business owner, how much value does your product or service provide, on top of delivering what’s promised?
After being underpaid for years, I finally had a change in my perspective. Here are 4 main thought processes:
By charging more, I am able to provide a better service to my clients. This goes for salaried positions, as well. When my salary was too low, I was side hustling and my priorities were split. When I chose to work with a single company that paid me more, I was able to make their project my primary focus.
The industry average is X amount per hour. Due to my experience and the added value I provide, I should be charging above the industry average.
When I make more money, I’m less likely to work side hustles, which can be a detriment to my mental health. It also takes away time from things outside of work that are important. By charging more, I’m benefitting myself, my family, my friends and the general public through my donations and community involvement.
Making more money is the opposite of selfish or greedy. Every dollar I make has a predetermined job, so I know even before it shows up in my bank account that it will be used in a positive way that aligns with my goals and values.
Once it truly sunk in that making more money would be beneficial both to me and people around the world due to what I do with that money, I’ve been guilt free about pricing for about 8 months now, as of February 2022.
So, what practical steps can you take to help remove shame or guilt around your income? There are 3 you can do this week.
Step 1: Money Mindset Check-In
Ask yourself the following questions…
If I made more money, what would I do with it?
If I made more money, how would my family (or pets, friends, etc.) benefit from it?
If I made more money, who and what would benefit from it?
If I made more money, how would my future self benefit from it?
This first step allows you to see how much good you could potentially do by making more money. Instead of passing up the promotion, burning out from underpaid freelance work, or struggling to generate company revenue due to underpriced services, you and those around you will benefit from your increased income.
Step 2: Create a 1, 3 and 5 Year Plan
If you had 2x the salary or income that you currently have, what would you like to change?
Common examples include: paying off debt, an annual vacation, contributing consistently to your favorite charity, aggressively investing towards retirement, etc.
Now, figure out which goals can be accomplished in one year, what goals can be accomplished in 3 years and what you’d like to accomplish in 5 years.
These goals can apply to your personal life, business growth or both.
Here is a free workbook to help you with this task!
Step 3: Estimate Your Taxes
Since a higher tax bill is a common fear that holds many back from achieving higher salaries or revenue, let’s clear that mental block up right now. Due to seeing severe consequences handed out to some people close to me due to taxes, this obstacle was one of the hardest to overcome and it’s something I need to check-in on regularly since there are childhood memories involved.
The primary step I take to combat it is to remove a certain percentage of every dollar earned to set it aside for taxes. When employed, I prefer to have all taxes taken out so I’ll owe little to nothing for the year. If that approach isn’t for you, make sure you estimate what your taxes will be paid and remove that amount from your paycheck.
So, if you’re a salaried employee, check the tax brackets and remember that there are deductions to consider so you’re not necessarily going to have an extra 5%+ removed from your new paychecks.
As a business owner, you should calculate taxes into your rates. For example, if you’d like to profit $50 an hour, make sure that your hourly rate is $50 + Sales Tax (if applicable) + Federal + State + Social Security + Medicare.
It’s also important to separate your cash into multiple accounts the moment it comes in.
Don’t pay yourself first and the tax account later. That will set you up for failure. Instead, set tax money aside automatically, so that you have year round peace of mind, even when it comes time to pay taxes!
If you want to learn how to quickly reset your money mindset so that you can be open to earning more income, check out my free guide on 3 money mindset exercises.
For any professionals or entrepreneurs that want to learn how to feel confident about their increasing income and/or money management,book a free mini-coaching call with Miranda now!