Overcoming Underearning - Recognizing the Problem and Taking the First Steps Towards A Solution

Underearning is a process of not really making enough to support oneself wisely and comfortably. It is usually rooted in a combination of poor information about how money actually works in the real world, limiting beliefs and attitudes about money, and a set of financially destructive habits related to organization and money management.

Many underearners start to naturally move out of this cycle and toward higher earning but are unable to complete the process. They never make the full transition from underearner to comfortable earners and seem to struggle with these money issues most of their lives despite genuine effort to change. The reason for this is that most underearners either do not know that they are underearners or they do not know what the process of leaving underearning behind actually looks like.

If you ask, many underearners will tell you that they are doing just fine - that they are making enough money to get by and take care of themselves. These same underearners will also readily tell you that they have had bad luck, unexpected expenses, and personal crisis that have thrown them financially off track and have caused stress. Usually these setbacks happen on a fairly regular basis. It seems that they start to get ahead and then something happens and they fall behind again.

For some this may be an economic reality related to skills, education, and cultural opportunities. For many however it is something much different:

1. They were not doing fine in the first place- they were underearning and
2. They confuse progress with setbacks when overcoming underearning and either give up altogether or retard their progress with unnecessary effort and worry.

Underearners need to get in the habit of acknowledging that they need to earn more than they think they do. Part of the cycle of crisis and defeat that underearners experience is created by the fact that many expenses seem unexpected when they in fact should be expected. If there is not extra money on hand for health emergencies, equipment failures, vacations, and time spent being out of a job, then there is not really enough money. None of these things are fun, but all of these things are facts of life in our times and we need to plan and earn for them.

Although most underearners know this on some level, they often ignore it because they feel powerless and overwhelmed. This is particularly true when those "unexpected" expenses do come up that they simply did not have the cash to deal with before; even if they had planned on them. One tool for breaking the cycle of underearning is to realize that those discouraging expenses may not be a sign of failure; instead they may be a call to action and a significant opportunity for change.

The most common sign of progress in overcoming underearning is in fact the unexpected expense. Something good will happen, either a better job or reduced daily expenses and it will seem as if things are really going to change financially, and then spending seems to suddenly increase. The underearner on their way to higher earning seems to lose all progress and confidence in the face of expenses and/or debts that are once again increasing. Huge progress is available to the underearner who does not fall into this trap and instead uses the setback as a tool for exploring their underlying relationship to money.

For most underearners overspending is not the issue, not earning enough to pay for life's normal setbacks is the issue. Paradoxically, the first key to breaking the earnings barrier actually is not to try to earn more but to change how you respond when you spend more. How you emotionally respond to spending to clean up old debts, obligations and needs can help you to change the way you think about money and the options you have for earning it.

Most underearners go through a period on their road to wealth where they have to clean up the old effects of not having had enough ready cash on a consistent basis in the past. The irony of the universe is that this usually happens about the time that the underearner is suddenly starting to earn more, and or encounter more professional opportunities. An example of this is when you get a bonus at work and then suddenly your car breaks down and you spend everything extra on getting it fixed. It is a process that can be very discouraging