Don't charge less. You will end up giving the product away...lose money. That is not what a business is about. We, women particularly, tend to under rate ourselves and our work. How long does it take you to make a cake? I don't mean just the decorating.
How long does it take to bake the cake, from the moment you start pulling ingredients out of the pantry until it is cooling and you are washing the bowls and pans? Never mind going to the store to buy the ingredients. And how much time does it take for you to make the fillings, buttercream, fill icing bags, all of that?
I did a cake last week at home for a friend that took 25 hours to make, after I counted how long it took to make the modeling chocolate, then all of the figures I made of modeling chocolate, made the ganache, made the buttercream, baked the six layers for the three tiers, and all from scratch. Then assembling the cake, strawberry shortcake on the bottom and chocolate with chocolate mousse filling and ganache on the top two tiers. Then I decorated it. The only part not made from scratch was the fondant since I prefer Satin Ice. I caught a break on rolling the fondant since I had the bakery sheeter at home to roll it out. I only charged a nominal fee since the guy is a friend who has had a rough time of it lately but there is no way I could make a living if I charged lower than $5 per serving once our bakery gets open next month. I charged way less than that for this cake but it is the last time, I will not make that mistake again. In fact, the restaurant three doors down from our new bakery charges $6 and $7 per serving of dessert. I am seriously considering charging more, like $6/serving to start or a minimum flat rate for any cake, extra decorating elements and labor costing more.
We are almost done with the construction of our bakery and in front built a fancy cafe where people can come in for coffee and dessert. The local area is wealthy. If they can afford multimillion dollar houses, they can afford $6 or more per serving of a custom cake. If you go to Charm City Cakes website you'll see that their minimum is $1,000.
I know it is tough out there for some folks but 90% are still working in most of the country and if we start backing down on price while our costs continue to rise, we only hurt ourselves. If you have a really good product, you should get paid a fair market price. Let the few clients who would complain drift away. The ones who can afford it will come. Believe in yourself and continue to make a better product each time and you will succeed.