Today, we're talking about salary problems. Why? Because there's an ugly truth about women and their salaries. We take home less money than men who perform the exact same jobs. This means that even if a man and a woman have the same degree, the same professional experience, and the same level of competence, there would still be a difference in their earnings.
Let’s think about that for a moment: the same exact background, but different pay. The research on this is definitely side-eye worthy – for every one dollar a man makes, a woman only makes 80 cents.
Are you underpaid? If so, are you pressing full steam ahead to rectify the situation and increase your salary? Or are you guilty of making salary mistakes that actually sabotage your long-term income potential?
5 common salary problems for women
Most of these salary problems fall into 5 categories, but by learning what these problems are, you can make the necessary changes to fix them and get paid what you deserve too!
1. Not having a compensation strategy
A compensation strategy is a plan that spells out your long-term salary expectations. These expectations are based on skill level and experience, the industry standard for people in similar positions, and unique value. To do this, calculate your worth, including taxes, and create a plan to get you to that dollar amount.
It would be great to have a compensation strategy before you start your first job. That's because your initial salary creates the baseline for everything else you’ll be paid in your lifetime.
But sadly, this is something most women simply don’t know they should do. Many of us—especially those fresh out of college and excited just to have a job—don’t take the time to think strategically about how much we get paid. This ends up being one of the most costly salary problems women face.
If you don’t already have a compensation strategy, start now. Take out a pen and paper and think about where you are now. Then, think about where you actually should be and where you want to be in the future.
Once you’ve done the math, create a plan to get there – whether that’s by asking for a raise, looking for a new job, or starting a side hustle.
2. Assuming you’ll be paid for your contributions
It sounds so simple, right? Do a good job at work, and you’ll eventually get paid for it. However, this isn’t always the case. Sure, there are times when doing your job well can mean a few extra coins.
But 9 times out of 10, managers aren’t sitting around waiting to hand over wads of cash every time you accomplish a new goal.
Don't sit around waiting to be paid for your contributions. Instead, be an active participant in your salary progression. If you expect to be recognized financially for what you do at work, you’ll need to make sure your boss (and anyone else involved in the money decisions) is well aware of that.
Beef up your annual self-evaluation to kick this salary problem out the door! Schedule a stand-alone meeting to talk about your achievements. Either way, you need to make sure you create a platform to show your boss all you’ve accomplished throughout the year.
3. Being uncomfortable talking about money
Many women have pushed the subject of money to an “off-limits” space, unable to discuss things like current salary, future money goals, and earning potential with even their closest friends. So, to bring up the subject to their boss can be the cause of a lot of anxiety.
Although this salary problem can be tough, it’s time to move past the uneasiness that comes with talking about money. Especially if you actually want to earn more. The saying, “A closed mouth won’t get fed,” couldn’t be more true in this situation.
Although the most important conversations are usually the most uncomfortable ones, it’s definitely in your best interest to push past your fear and have them anyway.
4. Making emotional decisions
Making any decision when you’re in your feelings is a bad idea. Emotions like anxiety, anger, nervousness, and fear can sabotage your efforts to get the raise you want when you’re not able to keep them in check.
Being so nervous that you accept the first low-ball offer you get or so angry that you yell at your boss when talking about how much you deserve a higher salary will essentially ruin any chance of a positive outcome.
Your goal should be to remain calm and collected throughout the entire process – leaving the way you feel out of the equation. When it comes to making decisions on salary, focus on your research and the facts.
5. Being afraid to walk away
Even if you successfully do all the things we've talked about so far, the final decision on whether you ultimately get that raise or not is out of your control.
Instead of getting hung up on this fact, you should have a contingency plan and exit strategy if things don’t work the way you would like.
Do you know what’s worse than realizing you’re being underpaid? Realizing you’re underpaid, asking for what you deserve, and then staying put even if nothing changes.
This fear of change is what holds many women back in forging a new career path for themselves.
Combat salary problems by taking action!
If any of these mistakes are ones you’ve made in the past (or are still making), don’t beat yourself up about it. Now that you know what salary problems to avoid, focus on how you’ll do better going forward. Take action by making a financial plan and ensuring your current salary is aligned with those goals.
Increasing your income means you can save more money, invest more towards retirement, and do all those other fun things you've wanted to do, like travel more.
Need some help learning how to increase your income or even find a higher-paying job? Enroll in our FREE financial courses and worksheets to set yourself up for financial success!