Are You Earning Too Little?

Underearners can overcome their low incomes by making some big life changes.

Personal finance author Barbara Stanny realized she was earning too little money when she interviewed women bringing home six figures or more for one of her books. “Of the first 15, three of them were writers. It was such an empowering thing for me to see. There were people doing what I was doing, but they were making more,” she recalls. She committed to follow their lead, and before she finished her book, she had started earning six figures herself.

Earning too little money, which Stanny defines as earning less than you need or desire, despite efforts to do otherwise, is a problem so common that Stanny started giving workshops on the topic. Eventually, it became the subject of her next book, “Overcoming Underearning.” Others have also tackled the issue:Underearners Anonymous, a support group based on a 12-step program, is dedicated to helping people who find themselves trapped in a low-income cycle. And Bari Tessler Linden, a popular financial therapist, addresses the topic in her work, too.

Tom Anderson, a freelance writer based in New York, wrote about visiting an Underearners Anonymous meeting for the financial website LearnVest earlier this year. “The median age was mid-40s, and it was a pretty diverse bunch of people from all different socioeconomic backgrounds,” he told U.S. News. The session focused on improving time management skills, goal setting and being more career focused, he says. After the meeting, he says, “I did adjust my own expectations for my finances and what revenue targets I wanted to hit.”

Anderson says he would recommend the experience to anyone who is comfortable with the spiritual side of 12-step programs and who is not doing a good job of valuing their time, which often has a negative impact on earning power. (Underearners Anonymous did not respond to requests for comment.)

Financial therapist Linden says in order to overcome her own struggle with underearning (in her 20s, she worked in hospice and as a counselor, and she couldn’t afford organic food), she had to first learn to value herself better. “I had to do a lot of work on cultivating my value and what this means to me,” she says. She also had to learn that it was OK to want to earn more money.

“I thought if I did good work, money would just appear. But it also did not feel spiritual to me to strive for money,” she says. Still, she knew she had to find a way to earn more. So she took on extra overnight shifts at hospice, but was still stuck earning less than $2,000 a month. She took on a second job, and eventually earned enough for some small indulgences, like chocolate. Then, she learned about bookkeeping, took on clients and started earning more money.

Today, she’s built an online business based around her financial therapy and coaching work that allows her to earn a six-figure income. “It’s about the numbers, but of course it’s also about having a deeply meaningful and joyful life, giving amazing work to the world and having a great lifestyle. And we all define that in our own ways,” she says.

As for Stanny, she says her own underearning struggles grew out of larger money issues. She recalls her father, one of the founders of H&R Block (HRB), teaching her little about smart money management. “The only thing my father ever told me was, ‘Don’t worry,'” she says. Later, her husband, a compulsive gambler, created a new set of financial problems for her. She finally decided she had to learn how to manage (and make) her own money.

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