Are you charging what your skills are worth? Or are you settling for crumbs that reveal your insecurities instead? That’s an important distinction to make, because how you do money is how you do everything. If your rates are too low, they’re compromising more than the health of your business. They’re having a negative impact on your clients — and on every other area of your life.

Undercharging is one of those topics that I see come up literally every week when it comes to pricing. It scares the crap out of most people from both ends of the discussion. Some are scared they are undercharging already, whereas others have no idea if they are or not, and some are just throwing out prices into the client pond and hoping for a catch. All of these scenarios are dangerous because undercharging is intrinsically linked to our value mindset and our innermost thoughts and perceptions of how we see ourselves.

So why do we undercharge in the first place?

Undercharging is common, especially in the creative space. There are so many lies and things we tell ourselves when it comes to our value that really throw us off track, and sometimes that leads to undercharging. So let’s look at some of the lies we tell ourselves…

“If I charge less than my competition, I’ll win the job.”

Yep, this one is a biggie straight off the bat. It seems logical, right? If I am the cheaper option, the client will choose my service or want to work with me. This is something that literally every creative you know has struggled with. But here’s the thing. If the client is choosing you over your competition because you are the cheaper option, that leads me to believe that the client values cheap work over quality, that they would rather save a buck than invest in quality work. And that, my creative friend, is a client you DO NOT WANT.

“The skills I have are common, they aren’t worth more.”

I get it, we often think that because something is easy or can be done by ourselves that everyone can do it. But I am telling you right now, the only reason that you can’t see your magic is it’s not for you, it’s for everyone else. Think about it this way. There are others around you that you would turn to who are better at doing things than you are. For me, I suck at baking cakes, so I’m more than willing to pay big bucks for good cake. But to her, she finds it easy to do, but that doesn’t mean she’s going to charge less, right? And nor should you!

“Everyone is going to think I am selfish for charging high.”

If I’m charging high, people are going think I’m money hungry, greedy, and selfish. Sound familiar? You aren’t alone in thinking this, it’s a really common thought of those who are scared of charging their worth. But if you think about things that are expensive, more often than not, you look at them as valuable, and more of a status symbol to be attained or earned. When people upgrade from what they have, they more often than not are looking for something of higher value, and are more accepting of a higher price tag.

“I’m not skilled enough or have enough experience to charge any more than I do now”

Hello limiting beliefs! Good to see you are here at the party (but, like, not really). I like to think that as I work, as I experience new jobs and challenges, and subsequently solve them, I am increasing in value and becoming more skilled, therefore I should be charging more. Now I want to make it abundantly clear, your prices should definitely factor in the experience level you show. But ask yourself this, if you found out that someone with less experience was charging more than you, would that effect the way you are charging now?

“I’m just going to charge what I would be comfortable paying myself.”

If you’re plucking numbers out of thin air, only charging the costs you would be comfortable paying, then you are almost certainly going to be undercharging. And what’s more, there is a really good chance that you haven’t calculated your numbers for your own unique situation, that you aren’t considering your expenses and run the risk of operating at a loss. It’s a bad place to be and we need to get out of that spot asap!

So how do we stop undercharging?

It’s sometimes easier said than done, right? If we know better, we should do better. But sometimes it feels like a bad cycle that we are stuck in and can’t get out of. We charge low, get jobs from clients who value low, then feel bad when we need to charge more to put food on the table. So let’s look at how we can change this.

Start looking at the kind of clients you are attracting.

Are they worthwhile clients? Do they have a value mindset or a cheaper-is-better mindset. Because convincing them is going to be one hard task, you’re probably better looking for new clients who actually value what you do and are willing to pay. Look at what you are great at and start looking around, there are literally thousands of new clients that you could be pitching to and potentially winning the hearts of. And the sooner you get a client who is willing to pay double (or more) than an existing client, the sooner you can say bye to that cheap client because you’ve made that money up and then some!

Learn to be stronger with saying no

It feels gross right? Saying no to a client can feel like you are being selfish and nasty. But you’re not btw, you’re just setting a boundary that is important to you, that you won’t work for less than a fair slice of the pie. If a client says can you do it for less, the instinct is “the client is always right, I should drop my price” But I want you to change something for me. Next time this happens, I want you to reply with “sure, but we will need to reduce the deliverables to accomodate this lower budget”. It will show them you are the professional, that you are valuing your skills and time and they should too!

Empower each other to charge better when you see it

So the other day I was chatting with a fellow designer and she said she saw someone who was undercharging and was shocked it happened. I’m talking charging mere hundreds for what was easily a couple of thousands worth of a job. “What do I do? I need to help this person see they are undercharging!” And that’s exactly what we should all be doing. If we see someone like this, rather than grabbing them and shaking them till their dinner falls out, take a beat and start asking questions. “Hey, I saw you did a job for $xx. I hope you don’t mind me asking but this is something I would have quoted at $xxx, I’m curious how you came to your quote? Promise I’m only wanting to help you see that you are way more valuable than that!”

Sometimes it can feel like there is only one way to charge, and the clients you have now are the ones you are stuck with for the long haul. Which is sometimes good, sometimes bad. So be sure to check in and see if you should be raising your rates from time so you can make sure you aren’t undercharging for the incredible value you serve.