Financial Independence For Women 10 – What is Your Hourly Rate?

Chapter 10 – Week 5.

“Money is a guarantee that we can have what we want in the future.”

– Aristotle.


Welcome back! Did you have fun playing the game “What If?” What did you discover? If you were too serious about the game, you missed the point. The point was for you to start enjoying yourself as you consider new possibilities in the process of Taking Control of Your Money.

Right now I want you to take a deep breath and then let it go with a sigh. Try it and see how it feels. If it feels good to you, then I want you to do it again. Try it even a few more times. Now shake your hands over your head and let your arms dance around a little. Twirl your wrists and shake out your arms. You want to keep things loose in this process of taking control of your money. If you catch yourself getting too serious (you’ll know it if your mind and body feel tight), I suggest you repeat the breathing and shaking exercises

Although we are doing serious work here and taking adult responsibility for managing our money, we cannot neglect that part of us that is often referred to as our “inner child.” Our inner child wants to play with money and enjoy it. She wants to feel that she is being recognized, cared for and appreciated. Neglecting her will harm us in the long run. What I mean here is that we might become rich because we were saving our money all of the time – but if we ignored that part of us that wanted to have some fun with money – she will take revenge on us in the end.

We’ve all heard the stories about those people, who were saving their money all the time and living a miserly life, and in the end someone stole their money or they lost it. This is what I am talking about.

There is a woman I know named Sally who knew the importance of having fun with money no matter how small the amount. Although Sally did not have much money, she realized that she needed to have some fun and play with a small part of what she did have.

Sally decided that she was going to play with 10 cents every week. She then thought about what she liked that was worth 10 cents. Her choice: chewing gum with a joke inside!

Every week Sally would go to the store and spend her 10 cents on chewing gum and enjoy the joke of the week. She was literally “blowing” the 10 cents just to give herself the feeling that she was enjoying her money and at the same time, taking control of her money. As a result, Sally was able to enjoy life a little more, she developed a healthier relationship with money, and her financial situation improved. The important point is to ALWAYS have some money that you spend completely for your own fun – where you give yourself permission to just “blow” it.

For those of you who may be thinking that you don’t have money to do this – especially after doing all the calculations you have in the previous weeks and cutting down your Nice to Have list – the suggestion to blow your money might sound like a contradiction. I hope though that Sally’s story demonstrated to you that you could do this with whatever amount you have … even with 10 cents!

Of course if you can afford a bit more than that, then do that. But in order to truly know how much you can spend just for the fun of it – for the sake of your inner child – you need to make sure that you do all of the exercises from the previous weeks. Otherwise you will be “blowing” your money unconsciously and without awareness of what is right for you. This of course will not help you to become financially independent.

I shared Sally’s story so you can see how making decisions (that look small) can actually have a huge impact on your relationship with money and in effect, change the face of your financial future.

What is Your Hourly Rate?

This week we are going to cover an issue that can be very sensitive for women: Your hourly rate.

Women all over the world are working at lower hourly rates than men. In the United States, on average a woman makes 80 cents to a man’s dollar. In the United Kingdom, a September 2009 report on the BBC revealed that on average, a woman’s starting salary in the financial sector was 37 percent less than a man’s – and a woman’s performance bonus was up to 80 percent less than a man’s bonus. “The starting salary gap carries on through their careers,” says Trevor Phillips, chairman of the Equality and Human Rights Commission in the United Kingdom. “[For their pay] the women are doing the same job as the men and bearing the same level of responsibility,” he says.

In their book, Women Don’t Ask: Negotiation and the Gender Divide, authors Linda Babcock and Sara Laschever say that one of the main reasons why women are working at lower salaries than men is that when it comes to negotiating a salary or getting a raise, “Women don’t ask.”

As we mentioned in Chapter 4, Babcock and Laschever estimate that a woman’s unwillingness to negotiate her salary at a first job can end up costing her an estimated $500,000 in lifetime earnings, and according to Robin Pinkley and Gregory Northcraft in their book Get Paid What You’re Worth, a woman who actively negotiates her salary over the course of her career could potentially earn $1 million more than if she just settled for what her boss offered!

At this point in the book, I think it’s clear that, as women, we need to start putting more value on our time and ourselves. Our inherent habit of placing everyone else before ourselves is putting us at a distinct financial disadvantage. Our habit of saying “yes” to giving our time to others without calculating the cost of that decision is hurting us. Taking ourselves for granted, “swallowing” insulting offers, and sitting in fear when it comes to asking for what we want – is sabotaging our dreams and keeping us from stepping into our potential.

Think about it: Why would someone give up their hard-earned money on someone who doesn’t value their time or themselves? If you don’t value yourself or what you are doing, why would anybody else?


Unfortunately most women are not willing to state out loud that they are great at what they are doing. Along the same line, women do not dare to put a high price on their services. I’ve encountered so many cases of women losing a possible assignment just because they were selling themselves short.

For example, just a few months ago we were looking for a PR person to do a specific job. It was a clearly defined job and we were looking for a superstar person to do it. We sent a message to all of our LinkedIn contacts asking them whether they knew a person that might fit this position.

More than 80 people responded to our message, either saying they thought they were the right person or that they knew someone who could be the right one. I want to tell you that it was amazing to see the difference between the way women presented themselves and how men presented themselves.

Here is one of the responses we got from an all-women public relations company: “It’s nice to hear you are already interviewing people. In this stage I can only say that we aren’t superstars … What we stand for in nutshell? We’re flexible, creative, we work relatively fast and we keep up our end of the bargain. Moreover, our prices are very reasonable. Love to hear from you …”

 I thought to myself, WHY IN THE WORLD would I even contact you for this job? I’m looking for a superstar and you are telling me that you are not one! If you don’t value yourself as one, why would I pay you anything? On top of this, nothing that you wrote is attractive to me. Obviously I want you to be flexible and creative – that’s what the work is all about isn’t it? You said that you work relatively fast – what is that? I want the job to be done yesterday! And about you keeping your end of the bargain, isn’t that a given when we work together? You said that your prices are reasonable. I didn’t ask you at this stage about your prices. If this is your starting point, where will you end up in the negotiation?

 As you can see nothing in this email was attractive for me to even want to contact them.

If this sounds a bit like some of the proposals that you send, you better quickly change them. The sad thing is that most women are actually proud to be described the way the women above described themselves. They think it is the “right” way of doing business and they don’t realize how undermining it is to their own self-esteem and their chances to actually get the assignment.

Another example I want to share is an experience we had with a graphic designer. She did all the right things in the beginning to get steady work with us. She offered to design a one-time free promotional postcard for us – and then if we liked it, we would pay her. We liked it! Her worked was so good that we offered to hire her for five more assignments (even though her price was higher than another graphic designer we had been working with).

We communicated this to her. Instead of being happy that she got the rate that she asked for – she said she would give us a discount. I thought, WHY??? We already said we like you! We already said that your work is GREAT. Why lower your rate?

That’s how women do it. We have a need to be liked and a fear of losing a job because our price is too high. Even when people are willing to pay us more, we are willing to work for less.

Here is the newsflash – People pay for value. The higher the value you give people, the higher they will pay. If you show people that you will give them the value that they need (or even more), they will pay you any price you quote. If you doubt your own value, that’s how it will look on your paycheck.

Self-Employed Women.

I know many self-employed women who find it extremely difficult to charge their worth in their business. Over and over I see women whose rates are entirely too low. On top of this, they often are agreeing to “swap” their services. I think that swapping and bartering are okay, only if you have enough money to cover your expenses in the first place.

It is not okay to be swapping your services if you cannot afford to pay your rent! As Suze Orman says, “Money first, barter second.”

The other thing I see happening with self-employed women is that they are often trying to fit the needs of their client and therefore agreeing to the terms of the client instead of themselves. This is the antithesis of taking control of your money and a recipe for powerlessness!

My message to all of you who are self-employed is: please don’t sell yourself short. There is no reason you should discount yourself. There are reasons that you started your own business. One was probably to express yourself through your business, and another was probably to be your own boss. So, look at what you are charging your clients and ask yourself: Am I being a good boss to myself? Be honest here. It’s okay if the answer you came up with was “no.” We are about to change this.

Let’s get started.

Exercise One – Calculate Your Current Hourly Rate.

Turn to a fresh page in your notebook and write “Current Hourly Rate” across the top. Use this page to do the following:

  1. Write down your monthly salary/income. Do not include passive income that comes from resources you don’t have to work for such as dividends or returns on investments.

  2. Divide your monthly salary/income by the number of hours you work on average per month (include your commuting time).

  3. The number you came up with in step 2 is your current hourly Fill in:
    My Current Hourly Rate is ……………………..

Self-Employed Women.

Most women who are self-employed have determined their hourly rate according to what is common in the market, and not according to the value they put on their time. If this is the way you have determined your rate, here is another way to do it.

Answer these questions:

  • How much do you want to earn in the next 12 months – e.g., $80,000, $120,000, $300,000, other?
  • How many paid hours do you work per week – e.g., 15, 20, 30, other? “Paid hours’ means how many hours do you ACTUALLY get paid for (this doesn’t include preparation and administrative work that you don’t get paid for)?
  • How many weeks do you work per year – e.g., 35, 40, 45, other?

Your hourly fee should be: …………………….

Your Desired Income : Weeks Per Year x Paid Hours Per Week.

For example -Say you want to earn $120,000 in the next 12 months, and you work 15 paid hours per week for 40 weeks a year.

The calculation would look like this:

$120,000 : 40 wks per yr x 15 paid hrs per wk  =  $600                 

$120,000 : $600 = $200

In this case you would need to charge $200 per hour.

Exercise Two – How You Feel About Your Hourly Rate.

Turn to a new page in your notebook and write “My Worth” across the top. Write down your answers to the following questions:

  1. Is your hourly rate smaller or greater than you expected?

  2. How do you feel about your hourly rate? In other words, how does your hourly rate make you feel?

  3. Are you being paid your worth?

  4. If your hourly rate is less than you feel you are worth, write in large red numerals the figure you believe you should be paid per hour.

Write down 20 reasons why you are worth that figure.

Exercise Three – Defining The Perfect Work For You.

Turn to a new page in your notebook and write “The Perfect Work For Me” across the top.

I want to mention here that one of the elements to create success is to do what you are passionate about. In other words, do what you love. When people do what they love, they normally excel in it and they get paid much more. Think about it: We always pay experts more than amateurs, and we pay more for excellent work than just for good work. So finding what is it that you are good at, or finding what is your dream work is important for raising your hourly rate. Maybe one of the reasons that you don’t have the right hourly rate today is because you are not in the right job or profession.

The following exercise was designed to help you start defining and visualizing what could be your perfect, dream work. What would you be doing? Who would you be working with? What kind of environment would you be working in (home, office, nature, downtown etc.)? How would your day look? How would you feel when you are working? How much do you get paid?

Do the following – Write one paragraph describing your perfect work scenario and how you would be paid for doing that perfect work.

Exercise Four – Ways to Increase Your Income.

Turn to a new page in your notebook and write “Ways to Increase My Income” across the top. Divide the page into three columns:

  1. Short Term (1–6 months)
  2. Medium Term (6 months–3 years)
  3. Long Term (3+ years). Proceed with the following:

In the short-term column (1-6 months), make a list of ideas for how you can increase your income in the next one to six Include actual figures with your ideas to set real numbers as targets for your mind to focus on.

In the medium-term column (6 months-3 years), make a list of ideas for how you can increase your income in the next six months to three years. Include actual figures with your ideas to set real numbers as targets for your mind to focus on.

In the long-term column (3+ years), make a list of ideas for how you can increase your income in the next three or more Include actual figures with your ideas to set real numbers as targets for your mind to focus on.

Have a look at your list of ideas for the first 1-6 Choose three ideas that you could implement and write down the actions that you need to take in order to manifest those ideas. From here, commit yourself to doing three actions from this list. Once you’ve done those three actions make sure to congratulate yourself and celebrate! Then take another three actions.

Once you build the habit, you will be able to keep going like this. Remember, small steps can make a huge difference in your life.


Homework – Take Control of Your Money.

The Value of Your Time.

Look through your expense list from Week 3 and pick two items from your “Must Haves” list and two items from your “Nice to Haves” list. Write down the value of each item. From here, calculate the time you’ll need to work to obtain each item.

When you are finished with the calculations, ask yourself if you would rather have the item or the time. For example, if you picked a weekly massage from your “Nice to Haves” list and the cost of this is $150/ week, and your hourly rate is $100/hour, the cost of the massage would equal 1.5 hours of your time.

Ask yourself, would you rather have the massage or the time? Continue this for each item you picked.

Re-Evaluating “Must Haves”.

With the information you gathered in the first homework exercise, write down what you learned about yourself in relation to your “Must Haves” and “Nice to Haves.” For example, you may have noticed that some of your “Must Haves” are not necessarily must haves. Take a few minutes to write down your discoveries.

Waste Time on a Weekday.

Go and do something that you never typically do (because you don’t have the time). I’m not talking about doing something constructive that you’ve been putting off or couldn’t find the time for. I’m talking about doing something just to do something. For example, take a train ride just for the fun of it, or sit in the park and just watch people going by. Pick something like this, then relax and allow yourself to feel how valuable time is.

Ask for a Raise/Raise Your Rates.

In Chapter 4 we discussed how to ask for a raise. Now it’s time to use your courage and have this conversation with your boss or with your clients. While in Chapter 4 you may have read the ideas and thought, “Wow, these are good ideas that I should use one day.” Now is the time for you to actually do it!

For The Week.

By now you are seeing the connection between your time and money. You also are seeing that one of the major ways we sabotage our efforts toward achieving financial independence is our unwillingness to ask for what we want. Now that you are becoming more aware of your patterns in this area, you have the power to take the action steps to change this. Remember, awareness is the first step to change.

Understanding why you are stuck in this pattern is the second step (I hope this book has enlightened you to this). The third step is re- conditioning. This means it’s time to do something that is atypical of your usual behavior. You guessed it: Ask for a raise. And if you are self-employed this means: raise your rates. (See Homework assignment number 4.)

By the time we meet up next week, I hope that you will have followed through on Homework assignment number 4. I want to also remind you that next week is the last week of our course. We will be reviewing what you have learned up to this point and preparing you for your next steps.

Please celebrate yourself in a special way this week.

… and I’ll see you next week!

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