The way I see it is, if you charge super-low you attract the sort of clients that seek engineers out for price rather than ability. These are the sorts you generally don't want to work with. My mindset has always been on 'work for free' (to get a start, increase reputation) or 'charge accordingly'. I started off charging $150 per day for tracking and $150 per song for mixing. That's essentially minimum wage. It's scaled up as the quality of my work and the artists I work with scaled up as well. I spend about 8 to 10 hours a day analyzing music/researching gear/practicing techniques so it's only fair that the time investment returns in some form.
Don't feel bad about charging what you are worth. A lot of your income will sink back into improving your tools anyway and the artists need to understand that it's better all around when that happens. It's a cascading effect, you start with free plug-ins, charge fairly modest/little, as you save up you get a UAD card or Waves classics bundle or something and as those increase your workflow you charge more accordingly in order to compensate for your improved workflow and the costs of the bundles. As you go from there and start to buy a Distressor or two, the range of tones you pull improves greatly, you get better sounds, the bands pay more as you have to cover the cost of the outboard. It's a natural progressive process.