Author Topic: How do I get past feeling guilty for charging more than I'm worth?  (Read 9093 times)

Spondulix

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I take on side work as a contractor where I bid on projects I'm interested in. Some of my clients are corporations or companies that I know have large budgets and are in it for the money; I have no guilt at charging what I think they're willing to pay (and I know they're still profiting off my work). One client pays me for a full-day even when I only work a few hours (which is like earning triple rate), and I'm like, f'yeah!

The problem I have is with indie clients and projects... the ones where someone is paying out of their own pocket, doing it for passion/art/creative fulfillment, a meaningful social cause, education purposes, etc. I'm not compromising my base rate, but I'm not charging double or triple when I could at times, or doing extra duties just for the sake of billing hours to clients who wouldn't care. I definitely find these projects fulfilling personally because I feel like I'm helping support their art or cause (most of the time the work I'm doing is pretty meaningless). But at the same time, I'm starting to get more clients who don't know the difference and are just coming in expecting to pay more. I don't know why I'm having trouble coming to terms with the fact that I should just take the money... that my guilt is costing me, not them.

I've talked to a couple colleagues about this, and they think I'm nuts. At the end of the day, it is about business, which I know! One colleague said, "if you don't charge it, someone else will." That still doesn't make it right to me, though.

MDM

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #1 on: May 21, 2015, 10:37:36 PM »
How does one define what one's time is worth?

A reasonable operative definition is "whatever rate people will pay to keep one working for as many hours as desired."

If you accept that, then if people are paying you aren't overcharging....

Ricky

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #2 on: May 21, 2015, 10:45:34 PM »
Isn't this analogous to taking a lower paying job to do what you love (only charging base rate), except doing what you love is also high paying (potential of billing more hours/higher rate)? It doesn't sound like you should feel guilty either way, but continue doing whatever helps you sleep best!

You have no one to answer to but yourself, so getting our opinions is pretty useless :)

Spondulix

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #3 on: May 21, 2015, 10:53:16 PM »
Isn't this analogous to taking a lower paying job to do what you love (only charging base rate), except doing what you love is also high paying (potential of billing more hours/higher rate)? It doesn't sound like you should feel guilty either way, but continue doing whatever helps you sleep best!

You have no one to answer to but yourself, so getting our opinions is pretty useless :)
Yeah, exactly - it's pretty amazing that I could get paid well to do something that I enjoy. But somehow I just keep coming back to the fact that I'm taking their extra money and not offering anything in return. I seriously wouldn't be doing anything different (for double the cost) except pocketing their money... and that feels incredibly selfish (in a bad way) somehow. In theory I could take the extra money and donate it to some cause... but why would I give to one cause when I'm just taking from another?

I'm trying to break this down cause I'm sure it's affecting other financial areas of my life, too. I was recently at the grocery store and saw like 75% off on something, but I couldn't bring myself to take all of it (cause it was more than I needed). I wanted to leave one or two so that someone else could get a good deal, too. But that's costing me money!!

vagon

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #4 on: May 21, 2015, 11:02:16 PM »
Hire someone less competent and charge them out for less, while still making a profit.
You already feel obligated to your customers, but this will:
  • Also make you feel obligated to your employees by having a successful consulting business to keep them employed
  • Free your time up to work for discounts/pro-bono to help these struggling people if you so choose
« Last Edit: May 21, 2015, 11:09:07 PM by vagon »

Knapptyme

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #5 on: May 21, 2015, 11:19:29 PM »
This is largely the reason I do not tutor while I'm still employed as a teacher. Even though I could bank some serious cash off of some poor (actually rich) kid's incompetence in math (or lack of work ethic), I try to help during regular business hours (the school day) and leave it at that. When I retire, I might tutor on the side.

I also refer students to other better students. This, however, caused a weird juxtaposition of philosophies in consecutive years. One student decided to tutor one of my other students for half the cost of a teacher to tutor them ($25/hour). Both of them thought this was a deal and were happy about the results. The very next year, an even better student decided that he couldn't stomach tutoring for money even though he plans on becoming a teacher (???). So, he helped freely during his study halls or lunch (within reason) and left it at that. I find that both of them embody what I believe to some extent.

markbrynn

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #6 on: May 22, 2015, 03:00:12 AM »
I've had some experience with what you're talking about and this is my philosophy: Don't be greedy and don't be dishonest. If you're charging a fair rate (whatever that is, but let's say clients are happy to pay it) to do a job, then don't worry. If you're charging by the hour and then keep billing hours when the job is already finished, that sounds dishonest to me. If you're in an office setting and you must do "face time" that's a bit different, but the general idea is that you should be comfortable to explain yourself to someone without feeling like you have done something wrong.

If you're a very efficient worker, you should try to switch from hourly rates to getting paid a fixed sum for completing a task. Then you need have no shame. Charge high, complete the task, collect the money. It's not always that easy (many companies and people remain focused on hours worked), but it helps to reduce the allure of padding your hours.

Regarding working with indie clients, that's a bit of a different story. That comes down to your values. I relate it to the big box store vs. mom and pop shop situation.
If you steal from Walmart or the corner shop (lie about your hours worked, in your case) then it's stealing either way.
If you choose to shop at the corner shop instead of Walmart even though the prices are a bit higher (charge indie clients less, in your case) because you want to support the corner shop, then that's a personal philosophy for "making the world a better place."


Rural

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #7 on: May 22, 2015, 04:06:29 AM »
I have a similar problem: I've had a "friend" rate for my side hustle for years, rarely used. But I have had two friends need projects recently, one a close enough friend that I wouldn't let her pay at all (she snuck a generous gift certificate to the massage place I love but won't pay for into my mailbox, so that was a win all around.).


The other, slightly more distant friend, I find myself resenting because her job is a pain in the ass (read: OMG does she ever need my help), and she's "only" paying the friend rate. I think I've decided to tell her this and tell her I don't want her to pay me. I think I'll resent it less as a favor to a needy friend than as wildly underpaid work, she'll be grateful, and she'll be less likely to come back and bug me about it/ want changes later.


So, for me, I'm only going to take discounted work if I'm willing to do it for free. Would something like that work for you? (I'm going to take steps to be sure I get fewer requests of this sort by asking the person who referred her to quit bringing up my name.)


In your case, if you choose one or two very deserving cases to do pro bono a year, would you feel better about charging normal rates otherwise?

BlueHouse

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #8 on: May 22, 2015, 05:23:16 AM »
Buy a giant house that is bigger than you need and way more expensive. Then suddenly you'll stop feeling overpaid and start feeling like you need to raise your rates just to keep even.   It seems to work for most people.
Jk

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #9 on: May 22, 2015, 07:31:09 AM »
I struggled with this as a very young consultant. What worked for me was to provide additional value to my clients above and beyond the service they hired me to do. Maybe it's adding a few extra hours of labor, maybe it's using slightly better materials, maybe it's just taking your time with a project and doing an extra-high-quality job.

I worked for a political reporting firm for a while getting my usual rate, but I believed in what they were doing, so I would sometimes work a few extra hours on supplemental projects where they needed help, but couldn't budget for it. At the time I did it out of the kindness of my heart, but it led to more work because they felt they were getting good value.

For other clients, when I delivered my final product, I would include a page of "future projects" listing some ideas for improving their business or technology. This helped me - it led to more work - but it also helped them to expand their business faster. Some projects didn't make sense for me to deliver, but I had a client come back years later to thank me for an idea that made him millions.

These kinds of "win win" relationships are what the new economy is all about. If you add value, you'll feel good about it and your business will grow.

epipenguin

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #10 on: May 22, 2015, 03:07:08 PM »
Do you estimate/quote out what it costs to do the job? I would have thought it would be fairly easily to say to all clients that you quote based on a full day of work. And then you can discount a few hours to the "good guys" if you manage to finish early. Then make sure you go out and enjoy the rest of your afternoon on those jobs where you are not going to charge them for a full day - that way, you're getting some unexpected time off that you can use to make life enjoyable, and the "good-guy" client is getting a discount. Win-win and no guilt needed. For all the average clients, charge the full day.

Syonyk

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #11 on: May 22, 2015, 03:16:57 PM »
Offer a discount for prompt payment.

I usually invoice net 30, with a discount applied for payment within 15 days.

okits

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #12 on: May 23, 2015, 04:39:00 PM »
For the organizations that could legitimately be considered charity or making the world a better place, you could donate some money back or find other ways to help their cause (publicity, using your network to help them find competent and fair-charging consultants for other work they need, volunteer your time in a way unrelated to your job.) For any cases like this work as efficiently as possible and err on the side of under-billing.  You protect your market rate but know they're getting good value.

Allie

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #13 on: May 23, 2015, 05:31:25 PM »
This may or may not be a helpful answer for your particular skill set, but I charge a reasonably high rate for all services that create a billable work product for my clients (which I imagine would be the same as charging for work that creates monetary value for your clients) or for which I assume liability by using my license/credentials regardless of who the client is.  I can quote this rate as my going rate for all clients regardless of who they are or what exactly they want me to do.  However, when working with agencies that are doing work I really believe in, I will spend unbilled time helping them in other ways, through consultations, training, etc. as a volunteer.

My husband doesn't have constraints regarding working with friends and family like I do and is happy to do work for a "friends and family" rate or barter. 

Ricky

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #14 on: May 23, 2015, 08:08:19 PM »
This is largely the reason I do not tutor while I'm still employed as a teacher. Even though I could bank some serious cash off of some poor (actually rich) kid's incompetence in math (or lack of work ethic), I try to help during regular business hours (the school day) and leave it at that. When I retire, I might tutor on the side.

I also refer students to other better students. This, however, caused a weird juxtaposition of philosophies in consecutive years. One student decided to tutor one of my other students for half the cost of a teacher to tutor them ($25/hour). Both of them thought this was a deal and were happy about the results. The very next year, an even better student decided that he couldn't stomach tutoring for money even though he plans on becoming a teacher (???). So, he helped freely during his study halls or lunch (within reason) and left it at that. I find that both of them embody what I believe to some extent.

I'm glad you don't do that, because that sounds borderline unethical? A bit like bait and switch: "Oh, you came to get a quality education? For that, you need to contact me after hours".

Logic_Lady

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #15 on: May 24, 2015, 05:01:20 PM »
This is largely the reason I do not tutor while I'm still employed as a teacher. Even though I could bank some serious cash off of some poor (actually rich) kid's incompetence in math (or lack of work ethic), I try to help during regular business hours (the school day) and leave it at that. When I retire, I might tutor on the side.

I also refer students to other better students. This, however, caused a weird juxtaposition of philosophies in consecutive years. One student decided to tutor one of my other students for half the cost of a teacher to tutor them ($25/hour). Both of them thought this was a deal and were happy about the results. The very next year, an even better student decided that he couldn't stomach tutoring for money even though he plans on becoming a teacher (???). So, he helped freely during his study halls or lunch (within reason) and left it at that. I find that both of them embody what I believe to some extent.

I'm glad you don't do that, because that sounds borderline unethical? A bit like bait and switch: "Oh, you came to get a quality education? For that, you need to contact me after hours".

I don't think it's an ethical issue as long as the teacher isn't tutoring students from their own school.

Also, it doesn't make sense to expect a class with a couple dozen students to provide the same level of instruction as one on one tutoring. I work for a company that runs test prep classes (for adults) and students in the class can purchase one on one tutoring as well. I wouldn't ever compromise my instruction in the class to make students buy tutoring. But in a class with a set curriculum I can't spend several hours reviewing a concept because one student is struggling with it. 

Unless we taxpayers are willing to fund individual teachers for every student, public schools can't provide the same level of education as individual tutoring.

Psychstache

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #16 on: May 24, 2015, 06:12:01 PM »
This is largely the reason I do not tutor while I'm still employed as a teacher. Even though I could bank some serious cash off of some poor (actually rich) kid's incompetence in math (or lack of work ethic), I try to help during regular business hours (the school day) and leave it at that. When I retire, I might tutor on the side.

I also refer students to other better students. This, however, caused a weird juxtaposition of philosophies in consecutive years. One student decided to tutor one of my other students for half the cost of a teacher to tutor them ($25/hour). Both of them thought this was a deal and were happy about the results. The very next year, an even better student decided that he couldn't stomach tutoring for money even though he plans on becoming a teacher (???). So, he helped freely during his study halls or lunch (within reason) and left it at that. I find that both of them embody what I believe to some extent.

I'm glad you don't do that, because that sounds borderline unethical? A bit like bait and switch: "Oh, you came to get a quality education? For that, you need to contact me after hours".

I don't think it's an ethical issue as long as the teacher isn't tutoring students from their own school.

Also, it doesn't make sense to expect a class with a couple dozen students to provide the same level of instruction as one on one tutoring. I work for a company that runs test prep classes (for adults) and students in the class can purchase one on one tutoring as well. I wouldn't ever compromise my instruction in the class to make students buy tutoring. But in a class with a set curriculum I can't spend several hours reviewing a concept because one student is struggling with it. 

Unless we taxpayers are willing to fund individual teachers for every student, public schools can't provide the same level of education as individual tutoring.
Teachers offering outside tutoring for pay to kids at their school is a common practice.

The public school system is there to offer a floor of services. Sone people are not satisfied by the floor and choose to pay more to excel beyond that. I don't see an issue.

Knapptyme

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #17 on: May 24, 2015, 09:16:07 PM »
This is largely the reason I do not tutor while I'm still employed as a teacher. Even though I could bank some serious cash off of some poor (actually rich) kid's incompetence in math (or lack of work ethic), I try to help during regular business hours (the school day) and leave it at that. When I retire, I might tutor on the side.

I also refer students to other better students. This, however, caused a weird juxtaposition of philosophies in consecutive years. One student decided to tutor one of my other students for half the cost of a teacher to tutor them ($25/hour). Both of them thought this was a deal and were happy about the results. The very next year, an even better student decided that he couldn't stomach tutoring for money even though he plans on becoming a teacher (???). So, he helped freely during his study halls or lunch (within reason) and left it at that. I find that both of them embody what I believe to some extent.

I'm glad you don't do that, because that sounds borderline unethical? A bit like bait and switch: "Oh, you came to get a quality education? For that, you need to contact me after hours".

I don't think it's an ethical issue as long as the teacher isn't tutoring students from their own school.

Also, it doesn't make sense to expect a class with a couple dozen students to provide the same level of instruction as one on one tutoring. I work for a company that runs test prep classes (for adults) and students in the class can purchase one on one tutoring as well. I wouldn't ever compromise my instruction in the class to make students buy tutoring. But in a class with a set curriculum I can't spend several hours reviewing a concept because one student is struggling with it. 

Unless we taxpayers are willing to fund individual teachers for every student, public schools can't provide the same level of education as individual tutoring.
Teachers offering outside tutoring for pay to kids at their school is a common practice.

The public school system is there to offer a floor of services. Sone people are not satisfied by the floor and choose to pay more to excel beyond that. I don't see an issue.

Note: it is not allowed to tutor one's own students at my school, so there's no direct bait and switch.

In relation to this thread, whether it be common practice or not, I felt it reasonable to mention tutoring as a similar issue. The fact that some people have an opinion enough to comment on this common practice is, I think, reason enough to see an issue could/does exist.

As most of us on here aim for RE, I add this tidbit. I will likely be a teacher for life, just not one that necessarily gets paid to do so. I am an advocate for learning.

Spondulix

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #18 on: May 25, 2015, 02:07:47 AM »
I've had some experience with what you're talking about and this is my philosophy: Don't be greedy and don't be dishonest. If you're charging a fair rate (whatever that is, but let's say clients are happy to pay it) to do a job, then don't worry. If you're charging by the hour and then keep billing hours when the job is already finished, that sounds dishonest to me.
Great advice. I should clarify - the client who pays me a full-day it's cause that's their policy. I asked early if I could do half day pay when I only work a couple hours, and they said they were fine with the full-day rate - they do it with everyone. It's not how I would run a business, but it does keep people happy!

I struggled with this as a very young consultant. What worked for me was to provide additional value to my clients above and beyond the service they hired me to do. Maybe it's adding a few extra hours of labor, maybe it's using slightly better materials, maybe it's just taking your time with a project and doing an extra-high-quality job.

For other clients, when I delivered my final product, I would include a page of "future projects" listing some ideas for improving their business or technology. This helped me - it led to more work - but it also helped them to expand their business faster. Some projects didn't make sense for me to deliver, but I had a client come back years later to thank me for an idea that made him millions.

These kinds of "win win" relationships are what the new economy is all about. If you add value, you'll feel good about it and your business will grow.
This is very helpful, also. It actually just made me think of something - there is equipment that I can't afford now but would love to have. It would definitely help add value to future projects. I would have no problem charging more knowing that the money would go towards that.

Part of the struggle for me also is that my rates are getting close to people with more experience than me, who do the job better, have won major awards... I'm thinking about value just in terms of me - but really, there's other ways to offer value.

Allie

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #19 on: May 25, 2015, 11:03:08 AM »
Part of the struggle for me also is that my rates are getting close to people with more experience than me, who do the job better, have won major awards... I'm thinking about value just in terms of me - but really, there's other ways to offer value.

If this is the case, and you work in an industry where the work is known, then you should probably step back and reconsider your question.  The market guides rates and "value" is determined by the client.  If you are being offered money on par with these more experienced people it is likely because you are providing, in the clients' eyes, work that is approaching what can be provided by these people.  Don't undervalue what you produce.  It's easy to do when you do the work every day and it feels routine.  Honestly, it shocks me that I get paid for what I do, but I have to accept it adds value to others in a way I can't appreciate.

Spondulix

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #20 on: May 26, 2015, 01:54:51 PM »
If this is the case, and you work in an industry where the work is known, then you should probably step back and reconsider your question.  The market guides rates and "value" is determined by the client.  If you are being offered money on par with these more experienced people it is likely because you are providing, in the clients' eyes, work that is approaching what can be provided by these people.  Don't undervalue what you produce.  It's easy to do when you do the work every day and it feels routine.  Honestly, it shocks me that I get paid for what I do, but I have to accept it adds value to others in a way I can't appreciate.
Thanks Allie - this is great advice. :)

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #21 on: May 26, 2015, 02:43:37 PM »
Quote
How do I get past feeling guilty for charging more than I'm worth?

If they're paying your rates (and continuing to do so--i.e. repeat customers), than you aren't charging more than you're worth.  They clearly think it's worth it, and indicate that by continuing to hire you.  So you need to get over thinking you aren't worth it, because you are.  :)
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Freedom2016

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #22 on: May 27, 2015, 02:29:26 PM »
If this is the case, and you work in an industry where the work is known, then you should probably step back and reconsider your question.  The market guides rates and "value" is determined by the client.  If you are being offered money on par with these more experienced people it is likely because you are providing, in the clients' eyes, work that is approaching what can be provided by these people.  Don't undervalue what you produce.  It's easy to do when you do the work every day and it feels routine.  Honestly, it shocks me that I get paid for what I do, but I have to accept it adds value to others in a way I can't appreciate.
Thanks Allie - this is great advice. :)

I like Allie's comment too. You might consider developing specific rates for specific types of clients. I.e. in my firm we have "rack rates" which are our highest billing tier - this is for corporate clients. We then have discounted rates for international organizations, and a deeper discount for non-profit organizations. Each discounted rate is based on what the market will bear in each of these sectors. On occasion something lands on our plate that seems so worthwhile, but the org has no money, that we'll do it pro bono.


Bob W

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #23 on: May 28, 2015, 12:40:20 PM »
You're worth it dude!   You are totally worth it.    You are so worth it. 

DeltaBond

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #24 on: May 31, 2015, 02:16:12 PM »
My husband did a lot of contractor work, and got paid quite a bit, and he explained that one can price each service as if you only did that service, how much would you need to charge for it to earn a living?  That really put it all into perspective for me... even those cleaning houses for $25/hr!!!

marcela

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #25 on: June 01, 2015, 10:25:30 AM »
Set your normal base rate and then if you are working with a registered 501(c)3 non profit, offer them a discount on the regular price. It comes out to the same thing as having a special nonprofit price, but you can take the invoice to show a charitable donation which can help you out come tax-time.

BlueHouse

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #26 on: June 18, 2015, 01:01:25 PM »
If this is the case, and you work in an industry where the work is known, then you should probably step back and reconsider your question.  The market guides rates and "value" is determined by the client.  If you are being offered money on par with these more experienced people it is likely because you are providing, in the clients' eyes, work that is approaching what can be provided by these people.  Don't undervalue what you produce.  It's easy to do when you do the work every day and it feels routine.  Honestly, it shocks me that I get paid for what I do, but I have to accept it adds value to others in a way I can't appreciate.
Thanks Allie - this is great advice. :)

I like Allie's comment too. You might consider developing specific rates for specific types of clients. I.e. in my firm we have "rack rates" which are our highest billing tier - this is for corporate clients. We then have discounted rates for international organizations, and a deeper discount for non-profit organizations. Each discounted rate is based on what the market will bear in each of these sectors. On occasion something lands on our plate that seems so worthwhile, but the org has no money, that we'll do it pro bono.
Be careful with billing people different rates for the same work.  If you have a US government customer, they can demand to see your last 3 client rates and they have the right to the lowest price.  Many places get around this requirement by creating different "packages" of product/services.  For instance, product X might cost $1000, but if you buy 1 product X and 2 years of maintenance, then you can get product X for a cheaper price.  Lots of ways to do what you want, just know the consequences before you do it. 

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Re: How do I get past feeling guilty for charging more than I'm worth?
« Reply #27 on: June 18, 2015, 01:40:52 PM »
Part of the struggle for me also is that my rates are getting close to people with more experience than me, who do the job better, have won major awards... I'm thinking about value just in terms of me - but really, there's other ways to offer value.

  Don't undervalue what you produce.  It's easy to do when you do the work every day and it feels routine.  Honestly, it shocks me that I get paid for what I do, but I have to accept it adds value to others in a way I can't appreciate.

This. right here.  I feel (felt) the same way as you did. But like the above quote said, it's because after 15 years of doing custom work, it felt routine!  Hell, anybody can do this, right!?

I just couldn't wrap my head around why people would want to pay me so much.  But if people feel you are worth it, and you provide a great product, and even better service, then damn it, you are worth it. 

Knowing what you are worth, and charging what you are worth will also help weed out a lot of clients that you may want to avoid, like the ones that suck all of your time up for very little profit.

Jon