Yet time and time again women, who by all standards have done well in their careers and have invested wisely, come through our doors worrying that they will wind up homeless and carrying around their possessions in shopping bags, otherwise known as the “Bag Lady Syndrome”. Poverty for these women is not likely but that doesn’t stop them from being worried about ending up penniless. In the attached 2013, Allianz Women, Money, and Power Study, many women with income of $200,000 or more, said they “often” or “sometimes” fear losing all their money and becoming homeless.
Women relate to money differently than most men do. They are continually balancing the joy of having money with the fear of not having enough. This fear is based in different cultural realities. In my experience, most men often believe (rightly or wrongly) that they can always earn a living. If the job doesn’t work out they can get another one. If they aren’t making enough money, they’ll work harder. On the other hand, many women often think about money from a place of scarcity. Hence they have the “bag lady syndrome” and not without good reason.
While job opportunities in most industries are better for women than ever before, our society hasn’t yet reached full equality in the workplace. To succeed, many women still feel the need to work harder and outperform their male counterparts while not shaking up the status quo. To compound the issue women, on average, can live longer and spend more on healthcare as they age. They are often in a caretaker role for both children and parents, which can restrict the time they can give to their jobs, resulting in less income and time to contribute to a retirement account.
A remedy will take time. For many it requires shifting their mindset. The fear is often elevated for those who don’t have a plan—not knowing what to or when to do it. Knowing how to spend and invest money can give anyone a sense of control.
Creating a financial plan can go a long way to achieving a peace of mind. Women that work with financial advisors have often done all the important steps - budgeting, emergency accounts, investing for their future and they may likely have more than enough money but still struggle to shake the fear. Our job, as advisors is to help to put those fears into perspective and work toward every client having a healthy relationship with money.