I was talking about the topic of my new workbook  Emotional Pricing~ How to Feel Great Charging What You’re Really Worth, and a colleague said to me, “I don’t know about all of that. I don’t feel right charging a ton of money—what about people who truly need help but can’t afford a lot?”

First of all, isn’t it interesting that she immediately assumed that charging what you’re really worth is a “ton of money”. Hmmm. You can bet that it will be hard for her to charge enough money because she assumes that it is just too much!

But here is the real issue: the fear that people who need you can’t afford you. So let me be clear about something: If you want to make more money, you need to work with a target audience who can afford to pay what you need. There simply isn’t any other way to say it, or do it.

I am very passionate about my work and I want to help the world as well, so I make sure I charge my full fee and make great money. Otherwise, I have no time and I feel resentful. (If people are not paying you enough money, it takes a lot of clients to pay the bills….) If I didn’t make enough money, I would eventually have to close my business and take a full-time position somewhere. And before I got to that point, I would experience a lot of deprivation and frustration with how little money I was earning. I doubt I would be in the best frame of mind to really do my best work. Being under financial stress is incredibly draining.

So I charge my full fee. Then, to “give back,” I do a certain amount of pro bono work that I feel really helps the world. I donate some of my time to causes I feel strongly about.

Years ago I heard the “Rule of the Three Fs.” Do your work for your full fee, do it for free, or flee. The point of the Rule of the Three Fs? Don’t discount! So, one way to feel like you are giving back is to do just that: give back. Charge your full fee and decide to donate a certain percentage of your time to a cause that could benefit from your work. It is a much cleaner way of doing business.

Doing a certain amount of pro bono work on the side can be very satisfying. Many powerful business women become strong pillars in their respective communities because they give back some of their time to causes and charities that are personally important to them. For example, I will occasionally do free seminars for organizations in my area that service disadvantaged women. Some of these women are domestic abuse survivors, or have lived their entire lives far below the poverty line. I care about these women, and know full well they can’t afford my fee, so I will do seminars a couple of times a year on how to ask for a raise, how to negotiate or how to raise your fees. I will talk with them about the pattern of underearning and discuss ways to stop underselling themselves.

These women are not my “target market” – they simply can’t afford me. But rather than discount myself or offer a sliding scale, I’ve found other ways to “give back.”

So stop with all the bartering, sliding scales and discounts. Charge your full fee. (Your “full fee” may still not be high enough. You may need to raise yours fees. But that is a different subject.) You’ll make more money with fewer clients if they pay you enough. Then use some of your time to truly give back to the world.

If setting or raising your fees feels difficult and you long to make more AND feel good about what you charge, then check out the rate-setting toolkit at www.ratesettingtoolkit.com.  I created this toolkit for all women who do great work and deserve to make more money! Check it out. It will help you earn more with ease.

When you undersell yourself— setting your fees too low and not raising them appropriately, that is underearning. When you habitually don’t ask for what you need and want, that is underearning. When you ignore opportunities or don’t market yourself consistently, that is underearning. The list goes on. And now more than ever, it is important to look at your part in this.

The truth is that women who have a clean relationship with money are not as affected by outside factors such as the economy. Are they still affected? Yes, they can be. But women who fall into the pattern of underselling themselves and their services are far more affected when outside factors strike.

Earning your worth is part of a personal growth process that all women must go through. This process should not be suspended when outside forces hit! It is about valuing yourself and knowing that your work is worth good money. Outside forces come and go, but the process of earning your worth should never stop. Don’t let outside forces keep you down! Even now, in the midst of so much confusion, you should still be focused on not underselling yourself.

If you take a moment to separate out how you are being affected by the economy vs. how you personally feel about charging people money, you will see that they are two different things. So if you are concerned with the economy but devoted to earning your worth, here are some ideas about pricing:

Price Adjustment
Instead of telling your clients you are raising your fees, consider calling it a “price adjustment”. You should raise your fees by at least 5% every year simple to not fall behind! It’s called inflation. And simply raising them 5% doesn’t honor that fact that you are becoming more experienced. But if you simply can’t imagine raising your fees right now, consider a simple 5% price adjustment. For example, you could say, “In light of the economy I have decided to only implement a five percent price adjustment.” This way you won’t fall behind.

Value Added Route
Go the “value added” route. Instead of discounting your services (I know some of you are tempted!) can you hold firm on your fees and find something of value to entice new clients? For example, can you include an eBook or a tips report? Can you give them a one-time only extra 30 minutes? Make sure that if you do give something away, you let them know it loud and clear so they don’t take it for granted. On the invoice you should list the full value of what you did and then say “no charge”. Make sure people appreciate you.

Hold Your Ground
Hold firm. Don’t back down from your fees. If now is not the time to raise them, so be it. Can you simply stand your ground and make good use of any extra down time you have? Over the last three months I have used extra time to update my bio on my website, finish writing a new workbook and start working with a new marketing consultant. I’ve been doing a lot of writing! I did pair back some expenses and then I held my ground on my fees. After three months of slower work, the phone started ringing more, partly because of all the marketing I did in my down time! (And as I’ve shared with you before, I start each day with a gratitude practice. It keeps me sane!)

Keep the faith that it IS possible to earn what you are really worth.  Take heart and don’t give up! Know that you do deserve to earn good money. This is a process. Commit to working on your relationship to money and it will pay dividends long into the future. In the meantime, I vote that you hold your ground.

In the mean time, please consider joining me this Wednesday  night (March 4th) at the Women’s Earning Institute in the Ballard neighborhood of Seattle. I am putting on an evening seminar on how to conquer underearning, even in this economy. I’ll go from 6:30 to 9pm. It is a pretty intense evening and women really rave about. We will:

* Identify the five hidden forms of underearning (and how they may be costing you money!)
* Explore the concept of “noble poverty”—is it holding you back?
* The impact of the “money fog” on our earning ability
* How women under price themselves and what to do about it
* Two powerful negotiation strategies that conquer the “good girl syndrome” and bring you more money

It’s only $59. http://www.womenearning.com/an-evening-with-mikelann-valterra/

If you are far away, stay tuned for more teleseminars.

Money is energy. It ebbs and flows. Some of you are very frustrated right now that the “flow” feels blocked.  Perhaps it is. But if you are experiencing this, you must tell yourself that this is temporary. When our income goes down the danger is that we tell ourselves horrible things—and we feel bad about ourselves. We scare ourselves and say “I’ll never get ahead. I’ll never make enough.” Stop that!

I tell my clients that “Broke is temporary. Poor is eternal”. Everyone goes through periods of being “broke” in their lives. Like I said, money is energy. It ebbs and flows. If your cash flow is down, do NOT tell yourself that you are poor! You may temporarily have to get very creative about getting your needs met. This happens. Life happens. But feeling “poor” is a very negative state of mind. Being broke is a temporary state. (And if someone says that they’ve never been broke, I likely wouldn’t believe them.)

I’ve gone through periods of being broke. Gasp! Did the director of the Women’s Earning Institute just cop to being broke at times? Sure. My family has dealt with unemployment and other unexpected life curve balls. I’ve had to temporarily get very creative about getting our needs met. But I also tell myself, “This is a temporary state of being. I am an abundant person.”

Remember this: Money—having it or lacking it—cannot change the essence of who you are. You are wonderful. You are a divine child of the universe. Money is a lovely tool. And we do want more of it to make our lives easier. But money is our servant. We are not the servant of money.

I sometimes think that part of why some people fear money is because they fear it will somehow change them. But money does not have this power. You have this power. If you are a strong, ethical, generous person, you will be this whether you have a lot of “flow” in your life right now or not! The amount of money in your life has nothing to do with who you are. (A line from the movie The Matrix is running through my head: “The Matrix cannot tell you who you are!”)

So, it is okay to admit you are “broke” right now, if this is the current truth. This will pass. How do you communicate this to others while still focusing on the positive and getting your needs met? Try this: “I’d love to go on our yearly Las Vegas trip, but my cash flow is down right now. How else can we have a lot of fun for less money? I really want to get together.” This is living in integrity with money. It is honest. And when you are honest, it allows others to be honest too.

Lastly, now is the time to start a gratitude practice. Make a list of all the things you are grateful for. Spend time on this list. When you focus on all the good things in your life, you feel better. And money flows easier when we feel good about ourselves, so stay focused on all the amazing goodness that is in your life.

A good friend of mine lies in bed every night going through all the things she is grateful for. She often falls asleep somewhere in the middle. She credits this practice with helping her get through a temporarily difficult financial time in her life. She stays focused on the positive.

So remember—being broke is temporary.  Be mindful of what you tell yourself. You are an abundant person. Remember that.

Planning and goal setting helps me guide my life. I’ve been reading and following Edwene Gaines’ work—she is a great prosperity teacher in the Unity church—which is part of the New Thought movement that I follow. (Edwene wrote The Four Spiritual Laws of Prosperity.) One of the laws of prosperity is learning how to set goals. Edwene says that being specific is crucial. (You can substitute the words “the universe” for God.) She writes

If you want to start effective goal-setting, where you are clearly conveying to God (the Universe) what it is that you want, then you’ve got to first get it clear in your own mind. After all, if you don’t even know what you want, how can you ask God to send it to you? Can you imagine calling up a clothing catalog company and telling the person who wants to take your order, “Just send me something you think I’d like”? It wouldn’t work at all.

Well, in the world of running your own business, the sky is the limit. What do you want to ask for? What are your specific goals? A couple of years ago my objective was to be more visible professionally. Well, that’s nice. It’s actually a great business objective, but not much of a goal. So one of my goals was to start writing a newsletter. I wanted lots of people to read me. I thought about it for a long time with no action. Then I realized it still wasn’t specific enough. There was no time line, for one thing. So I revised it to: My goal is to write a monthly newsletter by August 1st that I send to 1,000 people. I then wrote this down where I looked at it every day. It was still a bit overwhelming. So I started breaking it down.

Breaking a goal down into manageable steps is key. It is so satisfying to cross items off your to-do list! The first thing I did was block out one hour each week to work on the project. Then during that hour I started brainstorming topics, looked at newsletter templates and looked for an editor. I also realized I didn’t have 1000 people in my database! But as I kept looking at my goal, ideas kept coming to me. I did do a lot of speaking, but up until then, I had not collected many names. So I started collecting email addresses. I was so fixated on my goal that at one point I accepted a speaking engagement just so I could get to 1,000 names on my list! This is the power of goals.

It’s likely that you’ve read the end result of that goal. Now I put out a monthly newsletter as well as a blog. I wanted readers and I wanted to share my ideas. I’m glad I didn’t ask the universe to send me “whatever”.

Part of the “gift” of being in business for yourself is that you have control over your work life—and control over the money you earn. Yes, yes. I know it doesn’t always feel that way! Self-employed women can earn less than their salaried counter-parts as we struggle with pricing ourselves right and being visible enough to land customers. But when you look at lists of wealthy women in the United States, you will see a large percentage went into their own business. Oh, the possibility! And what did they all do? Set goals!

Simply put, setting goals is key to earning more money. After all, being self-employed means you are the captain of your own ship. So where, exactly, are you steering your ship? Are you even steering? Or are you simply drifting about, happy that you are not sinking? (Are you pre-occupied with taking on water?) Goal setting is about setting a direction. You may not end up exactly where you thought, but you’ll land someplace really cool if you set the course and actively steer.

Over the years I’ve learned that goal- setting is not an event, but a process. For example, I have a spiral notebook that I carry with me everywhere. The front cover always says “work journal” with the date on it. I use this for to-do lists, ideas, note-taking etc. Not every page is important. But there IS gold in there at times. (Countless times I’ve written down a great idea and then forgotten about it. Later I go back and see it and think, “Wow, what a great idea I had!”) It takes me about six months to fill a notebook. I then put an end date on the cover and file it. I have about 15 of these now in my file cabinet. They are the true history of my business.

Why am I sharing this with you? On the very first page of each notebook I write down my current goals—both personal and professional. I make them “SMART”. (I’ll blog about that later.) Everyday, before I check my email, I open to the first page and read my current goals. I read them three times. Then I go about my day. Whenever I start a new spiral notebook, the first thing I do is re-write the goals into the first page, often changing them, dropping some I’ve accomplished and writing new ones. This makes it a living, breathing process.

 What can you do to make goal setting a process and not an event?

Susan walked into my office and flung herself in my chair. “I think it’s time to simplify. Yep, it’s got to be back to basics for me.” At 46, Susan was a successful psychotherapist who enjoyed her work, but was tired of feeling financially stressed out. She had come to me for typical reasons—credit card debt, underearning, and a pervasive feeling of being in a money fog. We had spent time looking at where her personal money went and started a proactive planning process about how she WANTED to spend her money. Big questions were coming up for her.

I asked her, “What does it mean to simplify? And do you want to simplify your life?” Big questions. One of the things we had discussed was the difference between “voluntary simplicity” and “noble poverty”.

Voluntary simplicity is the conscious choice to lead a simpler life. If you simplify your lifestyle, you may need less money for some things and your life may be less complicated. On the surface, Susan was really drawn to the idea. It sounded more spiritual to her. And she said that in the past she had felt guilty for wanting more money.

But I told her that those feelings of guilt were more likely indicative of being caught up in noble poverty, not a conscious choice to simplify. When people are caught up in noble poverty, they generally have an unconscious belief that money is bad, or really good people shouldn’t want a lot of money. And noble poverty often get’s confused with anti-materialism.

One way you can tell if someone is wrapped up in noble poverty is if they wear their frugality as a badge of honor. (“Look at me! See how little I can get by with!”)

Susan was starting to tap into a lot of good things she could do with money—better self care for herself was at the top of the list. She counseled her clients to take better care of themselves but often felt like she didn’t have the money to nourish herself the way she wanted to.

Susan also really wanted to give money to some great causes, as well as her church. Personally, I think that giving away money in a conscious manner is very important to keep the flow of money moving in your life. Consciousness is key, though.

I also pointed out that voluntary simplicity was not the same thing as suppressing one’s income. Just because someone simplifies her life is no reason to make less money. True, simplifying may take some financial pressure off. Susan had decided, for example, to take a less expensive vacation. (At first she was going to cancel her vacation due to cost, but she had a real need to take time away. We found a way to satisfy this need with less money.)

And there are many wonderful uses of money. Buying local is more expensive then going to Wal-Mart. We do want to give to good causes. And making enough money helps secure our retirement.

Susan did decide to simplify parts of her life, though in a very conscious way. She made sure she identified what she really needed. She decided to spend less on some things so she could spend more in other areas she really cared about. But as she became more conscious about money, she decided that she did want to earn more. She raised her rates (which were under her colleagues rates), tightened her cancellation policy and focused on a new specialty.

In the end, she lowered some of her expenses and raised her income. Wow. She felt freer. She gave more money away and she saved more money.

One day Susan said, “Before, I was “simplifying” my life out of fear. Truthfully, I was just depriving myself. I guess there really is nothing noble about being poor…. Now, I feel so free that I could burst!”

Get conscious about your money. It’s your life and you have many options. But I agree with Susan—there is nothing noble about poverty. If you decide to simplify your life, do it carefully and thoughtfully. Think about what you really need. And don’t assume you can’t raise your income also.

So here is to earning what you’re really worth AND spending your money consciously.

The bottom line is that this is costing me a lot of money. So what is to be done? First of all, as soon as the weather forecasters started forecasting, I sent a proactive email to all my clients scheduled this week with a snow back-up plan. I offered to convert their appointments to the phone. Several took me up on it right away, as this is also a busy time of year. (Yes, not all of you can do your work via phone, I know. You can’t mail in your haircuts….) For my part, I took all my client files home with me on Tuesday in case I was at home the rest of the week.

Yesterday, I worked at home on the phone and “saw” many clients. It was quite nice, actually.

But there are some clients that I simply have to see in person. Two of those clients are cancelling today and will be re-scheduled for January. This one is truly no one’s fault. Many of my clients are self-employed and they “get it”. They don’t lightly cancel on me. (I have a clear cancellation policy in place that I do enforce, so generally speaking, my clients are very respectful.) But if neither of us can leave our house, well….

Why am I not super stressed out? (Okay, this is stressing me out somewhat.) Because at the end of every month, I add up my total business revenue (the total amount that was paid to me that month) and I tuck away 5% of it into a separate saving account. This is not my tax savings account. That is different (and a higher percentage!) This is simply my “five percent fund”—my business safety net account. A safety net account is used when there is an interruption in income, regardless of the reason. That is it’s only purpose. Maybe you pull from it to go on vacation (no clients that week!) Or maybe you pull from it when it snows and many of your clients cancel.

Sigh. At least it is very beautiful here. But I do confess that I’m one of those awful snow drivers you don’t want out on the roads.

There is a lot of fear in the air. Taking the time to actively plan before the year starts off helps us feel like we are in control. Don’t get caught in being reactive. Take the time to plan!

Periodic Expenses
Before I got too far, I made a list of my business “periodic expenses”. This is something I have my clients do. I have some business expenses that don’t pop up every single month, so if I don’t list them out, they can feel very “unexpected” when they do come up. For me, this is things like travel expenses, annual membership expenses and computer upgrades. Take the time to think about your irregular periodic expenses. (Periodic expenses are one reason why business owners underestimate the cost of business—they don’t come every month.)

Needs and Wants
Next, I spent time thinking about what my business needed and wanted this year. For example, I WANT to go to a couple of expensive trainings. And I want to renew an expensive membership I have, though I could let it go. I need to upgrade my computer. I need a new office chair. I want to hire a particular marketing consultant. I simply listed out my business “needs” and “wants”. Some of these things were on my periodic expenses list. Some came up for me as I simply thought about what I really wanted and needed in my business. What do you need and want for your business this year?

Expenses
Then I started working on my expenses for 2009. (I use a special planning tool that is a program that runs in Excel. I use it with many of my clients—be it personal or business finances we are looking at.) I simply went through my spending plan and put down what each category would cost me—rent times 12 months. Phone times 12 months etc. I put in all my “periodic expenses” like travel and computer upgrades.  I put in a lot of my needs and wants. Most important—I put in my salary! Wouldn’t it be great if I could increase it this year? This process will help me figure that out.

Big Picture
In the end, I sat back and looked at what my 2009 income plan was for my business and what my 2009 expense plan was for my business. Guess what—it didn’t work. Sigh. But that’s okay. The first time through feels a little bit like a skeleton plan. It gives me something to work on and think about. There are some decisions I need to make and seeing this laid out before me really has me thinking hard….

Tomorrow I’m taking my entire plan to a coffee shop to keep thinking. I’ve got to get this plan into balance! It makes no sense to start off the year with a plan that is out of balance.  Having a plan helps banish free floating anxiety! (Call me if you need help creating your own income and spending plan. 206-634-0861. Or see link to my private work.) I wish you abundance as you plan your next year.  Remember, you can be in control of your life and business.