Do you have “Bag Lady" syndrome? Here are four steps to overcome it.

Carolyn Humphrey, Empowered Financial Strategies

Have you heard of Bag Lady Syndrome?

Do you or the women in your life have it? According to the 2013 Women, Money and Power Survey by Allianz [1], there is a good chance you or the ladies in your circle do. Allianz Life surveyed 2213 women between the ages of 25 and 75. They spoke to women that were single, married, divorced or living with a partner. They spoke to women with and without kids and with women of different income and influence levels. This survey led them to 6 Insights on women. We will discuss two in this article, Bag Lady Syndrome and the fact that women are underserved by the financial industry.

Allianz found that the second most common fear women have is to lose all of their money and even become homeless. This fear is only second to losing a spouse. This was not just women in lower income levels, 27% of higher income-earners and 46% of Women of Influence have this fear. Overall, 49% of women fear ending up broke and homeless.

Additionally, they found that virtually all groups of women feel alienated (their word), by the financial industry. They cited that 62% of women did not have a financial professional and that over 69% of those who do, do not see them as a go-to source for information. I wish I could say that much has changed in the last 10 years but according to a 2021 article by Tiffany Boiman and Ali Khawar of the Department of Labor, women 65 years or older are 43% more likely than men to live on an income below the poverty level and that 65% of the elderly poor are women [2].

If you have this fear, what have you done about it? The first thing you can do, if you have not already is to take action.

Step 1: First ask yourself where this fear comes from. We all have a ‘money story’ that comes from past events. If a parent took a big risk and made a huge profit from it, does that give you a higher risk tolerance? If you experienced a different income level and lifestyle after a divorce does that make you more fearful? Starting to build an understanding is key and working with a financial professional that can give you honest feedback can be huge.

Step 2: Look at your situation and spending. When we have a fear, it can cause us to stick our heads in the sand and ignore it. Also, many women take care of themselves last and I find that in conversation with many clients, it is so imprinted in their brain to do so; that they almost feel powerless to put themselves first. You need to stop ignoring your fear, review and right size your spending. If you are not prioritizing your financial health, it is time to start.

Step 3: Find help and give yourself a break. You don’t need to do this yourself. Find a financial advisor who can help educate but also coach you so that you can forgive yourself for past financial decisions and to help you see where you currently are. Interview prospective advisors, look for one who will put your priorities first and one who will take the time to help you learn and to help coach along the way.

Step 4: Be brave to look for risks and ask for solutions. Most women I speak to in my practice have a fear that a long term care situation in their family would devastate them financially. For any risk like this, bring it up, discuss it and look for ways to minimize the risk. Again, having a good financial advisor in your corner will help here.

If you share this fear, it’s time to take control. It is never too late and today is better than tomorrow.