Written by Petunia, February 08, 2010

This is one of those "Why didn't I think of that?" moments for me. What a great idea! I'm going to do that today. Thank you.

Written by Rachael Brooke, February 08, 2010

Absolutely dead on, advice! Somehow I seem to start the year out in the "I want to afford this, so I'd better earn that" mindset and revert back to the old habit of "Gee, I can only afford this because I only earn that". Thanks for the reminder to change my earning perspective!

- Rachael Brooke

Written by ctreit, February 08, 2010

It goes without saying that it is easier to cut back on one's spending than it is to increase one's earnings. But you shed a very interesting light on breaking out of that traditional mindset. It could be a tremendous motivator to put the horse back in front of the cart. Great post!

Written by Monette Satterfield, February 08, 2010

You can only cut expenses so much. Eventually you have to look at the other side of the equation and increase revenues. It applies to businesses as well as individuals. Great point to make!

Written by anita, February 08, 2010

Just because you want more "stuff" or need to pay off debt or save more doesn't mean you deserve a raise or a better-paying job.
The way to earn a raise is to show initiative at work, make an effort to get along well with all colleagues, meet deadlines and stay on budget at work, and attend workshops to improve your skills. Works well for me and in the meantime I lived within my budget.
It's important to have dreams but this column needs a reality check. Hard work makes dreams come true, not unrealistic expectations about a $15,000 pay raise.

Written by MP Dunleavey, February 08, 2010

Thanks for all the great comments! It's always inspiring to take a fresh approach to an old dilemma.

Anita--We totally agree that any pay raise require initiative. But you wrote: "Just because you want more "stuff" or need to pay off debt or save more doesn't mean you deserve a raise or a better-paying job." It's not about deserving, it's about figuring out how much money your goals require.

Written by Amanda Steinberg (DailyWorth founder), February 08, 2010

To add to MP's point, Anita, I really don't think this column needs a reality check. Women under-earn -- it's been proven in countless studies. Earning is not a direct reflection of what you deserve, it's simply a matter of what you've been able to negotiate. We often negotiate based on some less-than reality of what we think we need rather than pushing the limits of what we can negotiate for (maximizing what the market will pay). I've proven countless times as an entrepreneur to earning twice, triple what I had gotten in a previous job or contract simply because I asked for it. It's not unrealistic to create a huge pay jump -- you just have to learn how to be perceived as offering that level of value and ask for it. There's a lot of money out there if you can figure out how to position yourself to access it. It's thinking that you can't earn more than keeps women under-earning and struggling.

Written by JK, February 08, 2010

This was the best email yet. In my opinion, we spend so much time on figuring out how we can cut back, when we should be focusing on how to grow our income. I would periodically focus on this topic.

Written by Kenia, February 08, 2010

I have a close friend who worked at my company, and she worked VERY hard, got all her work done well, AND came in on the weekends to pick up the slack due to being short staffed in her group. On average, people are promoted to a Level II by the time they have reached their third year anniversary at the company. She was above average, and the third year came an went. Why? She never spoke up. Obviously, you want to work hard to deliver high quality results to the best of your ability( and, well, it's just the ethical thing to do!), but working hard by itself isn't enough. You have to look out for yourself and ASK for more. Asking is part of selling yourself. You can work hard - but then it might go unnoticed until you bring it up in negotiations for a pay raise, and point out all the incredible work you've done (i.e. hard work & accomplishments = leverage in negotiations). Also, a $15,000 raise isn't unrealistic. It really depends on the industry, type of work, and the time-line in which ANY person (male or female) can realistically achieve that type of income growth. If you expect to get $15,000 more with only one raise, maybe that's unrealistic (like I said, it depends on the industry and type of work). But you can create a PLAN (work hard, work smart, and sell yourself) to maximize what the market will pay, and that would be a VERY realistic goal to reach within a few years.

Written by MP Dunleavey, February 08, 2010

Thanks, Kenia. Your friend's story is such a poignant example. We all want to be recognized--yet many of us feel, "Well, I'm doing the work, why do I have to advertise it? I don't want to be one of those bragging brown-nosers," etc.

But you're right: You have to call positive attention to yourself. I think this is equally true when you're self-employed, possibly more so. People pay more when they see something of great value.

Written by jeannene, February 08, 2010

This author is right on! I love the point of view looking from the desired result rather than the "here and now".

That being said, it is hard not to get into the mindset that one's income is "fixed" when working for an employer and not on a commission basis. It reminds me of an article on money I read awhile back that said " Men tend to think of money as a stream. It is an endless source and constantly changing hands. Women tend to think of money as a puddle. Finite. They focus on the scarcity instead of the possibility." While I am not sure about the men v.s. women analogy I do like the idea of the stream!

Written by Grad Student, February 20, 2010

Am I the only one who doesn't understand how 10% of Karen's $60,000 salary got calculated as $500 and not $600 ("Karen knows she should be saving 10% toward retirement (+$200 = $500)")? It may just be a typo, but if it's not, I would really like to understand because I am not far from graduation and needing to determine my own reverse budget (and hopefully fortunate enough to quickly find a position for which I can negotiate a salary to match). Thanks!

Written by Mikelann Valterra, March 02, 2010

In my money coaching practice, I call this exercise creating an "earnings plan", and the author is right. We get very stuck thinking only about our current expenses and current income. But what do we want our lives to look like? Looking at it from this perspective often gives us incentive to negotiate, for example. Sometimes it's incentive to be more visible in the workplace so we can continue to move ahead. If your career strategy is "I'll work really hard and wait to be noticed", well... as we all know, life isn't fair and you may not get noticed. So yes, creating a "reverse budget" or "earnings plan" can give us the incentive to be more visible in our careers and stand up for ourselves at the negotiating table.

Written by Hope, March 20, 2010

After whittling my budget Down to bare bones, and still comming up short, I felt like I would be stuck in low wealth forever. Writing down the kind of budget I'd like to have (with savings, debt payment and all), was an eye opener. Now I don't just say, I need to earn more money. I say, I need to earn X amount in order to pay my bills, save, and have some breathing room. This was a fabulous article. Thanks for sharing it!