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Day 2 How Your Earnings Determine Your Lifestyle

 

LEARN IT

Yesterday, we got an overview of your finances and determined your top financial priority. Today we’ll discuss the one factor that will influence your wealth more than anything else: your income.

Yes, it’s taboo to ask someone how much they make. But when it comes to your own income, this is something you should think about regularly—not just when you get a raise or switch jobs. For various reasons, when it comes to their finances, women tend to focus less on their earnings and more on spending carefully. But boosting your income is the easiest way to increase your wealth—so you can provide for yourself, enjoy your life and reach all your goals.

RESOURCES: YOUR EARNINGS

Two Main Reasons to Plan for the Future:

  • On average, women live longer than men, making it important for them to have a nest egg that will support them long after they retire. Sadly, statistics show that elderly women are more than twice as likely to be poor as elderly men.
  • Women also need to focus on their earnings more than men because women are consistently paid less than equally qualified men for the same work. While this gender gap is closing among the youngest wage earners, it still exists—but hopefully not for you after you take this course.

Your Income

You probably already know that you don’t take home your full salary. Part of your earnings is immediately siphoned off to pay your taxes. While we all love to gripe about taxes, they do pay for essential services: clean water and air, trash pickup, healthcare in our old age, public schooling that saves us from paying private school tuition and much more. Some of that money will eventually be repaid to you in Social Security after you retire. So, the first big chunk of your salary will go to pay for those things—likely in the range of a quarter or more of your salary, though for the those with low incomes, it can be as little as 10%.

The remaining money is entirely yours and in your control. With every saving and spending decision, you choose what kind of life and lifestyle you will have. If you want to upgrade your lifestyle, then you have to make more money. If you’re happy to spend less time working or are committed to pursuing your passion in a low-paying field, then you’ll need to scale back your lifestyle expectations.

The Money Center can help you keep track of your after-tax income. As money arrives in your bank account, it shows up in the Income part of the Smart Budget and shows you how much more you expect to earn this month. This is especially helpful if you have an irregular income, as you can see if you’ve reached your earning goal for the month, if you need to pick up another freelance project or if a check hasn’t come in. It also shows you how your income has been trending over the past few months.

In Step 2, you’ll take a quiz that will reveal your dream lifestyle, and then we’ll give you tips on getting an income that will support it.

 

GET INVOLVED

  • http://pulse.yahoo.com/_TCZ5JVOBTUFVT574RXICL6SD5M Nancy Muller

    You bet. In my work history, the most obvious differences slapped my face in the food service industry, particularly back of the house, from dishwasher to head chef. The boys made more.  

  • http://pulse.yahoo.com/_TCZ5JVOBTUFVT574RXICL6SD5M Nancy Muller

    You bet. In my work history, the most obvious differences slapped my face in the food service industry, particularly back of the house, from dishwasher to head chef. The boys made more.  

  • Lara Stewart

    It absolutely exists, but, some of the reasons for it are complex. To address inequality in wages, we need to address inequality in the social sphere, too.

    Women are more likely than men to drop out of work to care for young children. They are more likely to be the ones to take a few hours off to take the kids to appointments and soccer games. And, if the relationship doesn’t work out, they are the ones most likely to have physical custody of the kids. All of this can take a toll on your career.

    Women need to start requiring equality in their personal lives to achieve it in the professional sphere, as well.

  • Lara Stewart

    It absolutely exists, but, some of the reasons for it are complex. To address inequality in wages, we need to address inequality in the social sphere, too.

    Women are more likely than men to drop out of work to care for young children. They are more likely to be the ones to take a few hours off to take the kids to appointments and soccer games. And, if the relationship doesn’t work out, they are the ones most likely to have physical custody of the kids. All of this can take a toll on your career.

    Women need to start requiring equality in their personal lives to achieve it in the professional sphere, as well.

  • Lara Stewart

    It absolutely exists, but, some of the reasons for it are complex. To address inequality in wages, we need to address inequality in the social sphere, too.

    Women are more likely than men to drop out of work to care for young children. They are more likely to be the ones to take a few hours off to take the kids to appointments and soccer games. And, if the relationship doesn’t work out, they are the ones most likely to have physical custody of the kids. All of this can take a toll on your career.

    Women need to start requiring equality in their personal lives to achieve it in the professional sphere, as well.

  • Lara Stewart

    It absolutely exists, but, some of the reasons for it are complex. To address inequality in wages, we need to address inequality in the social sphere, too.

    Women are more likely than men to drop out of work to care for young children. They are more likely to be the ones to take a few hours off to take the kids to appointments and soccer games. And, if the relationship doesn’t work out, they are the ones most likely to have physical custody of the kids. All of this can take a toll on your career.

    Women need to start requiring equality in their personal lives to achieve it in the professional sphere, as well.

  • http://www.facebook.com/AshleyVictoriaBurton Ashley Burton

    It is hard for me to say as I work with SO many woman and I try not to discuss wages with others.

  • Manq

    Of course it exists. But the women’s rights movement and subsequent two-income households have led to worse problems including skyrocketing home prices in suburbs with good schools.

    http://www.amazon.com/The-Two-Income-Trap-Middle-Class/dp/0465090826

  • Living Technicolour

    I’m not a woman.

  • Blackbirdgallery

    Yes it does! Because it can. There are many jobs out there that do not have a clear framework for defining the appropriate salary for any given job. Our culture also a has centuries of stereotyping to overcome both in education of women so that they reach for professions that are male-dominated and in the actual workforce that has gotten comfortable with the stereotypes of the past. 

  • http://www.facebook.com/profile.php?id=100000811538449 Dorothy Walters

    It is the end of the day. I want to start tomorrow.
    Dorothy Walters

  • Anonymous

    Yes. There is a gender gap. I was hired on, full time, about 8 months after one of my guy friends from school. Same degree, same major and approximately the same amount of time as a temporary employee at the company. Because we’re friends, I now know they hired me on at 5% lower salary than they hired him on at. 8 months after they hired him full time I was hired full time. At that point he was making over 15% more than they offered me. Since I have been hired, I have not procured a raise despite good performance review marks. Aside from the monetary gap, my boss still has trouble making eye contact when he’s talking to me. I thought it might just be in my head until he pulled four of us into his office for a meeting on a job he told me I was heading up. He talked directly to my friend for the whole of the 20 min. meeting only breaking eye contact twice to glance at the rest of us! I guess if I had trouble just talking with a girl, they would be much less useful and I should pay them less, or I could go back to middle school and learn how to talk to girls.

  • Tabitha

    Yes! Simply because women do not know how to open their mouths, be confident, and ask for a substantial raise when they deserve it.

  • Cicely

    Yes, the gender gap does exist because of an outdated preconceived notion that the man is the breadwinner. We are way past this and the only President that has even acknowledged it and did something about it is Barack Obama (kudos to him, he did something right). The unevolved mindset of mankind needs to change otherwise we are doomed to repeat the past instead of evolve to a more brighter and equal future.

  • http://profile.yahoo.com/FKOTGRS5I2KM7EHNJCZQYW7ZTY Samantha A

    Honestly, the gender gap has affected our workforce for years, but its also evidence that going to college and broadening your education can give you a better salary. Depending on how many years in college and the degree plan.