Let’s talk about the “bag lady syndrome” making the social media rounds again. It’s a naturally occurring fear many women have of running out of money. There are many reasons why women feel this way and often manage money to their own detriment in response to the bag lady syndrome. In our practice at Aptus Financial, we take this head-on, and you can apply our financial planners’ best advice in your own life if you ever find yourself cycling through the thought pattern.
First, why-oh why-is this a uniquely women occurrence? Well, we have actually seen women run out of money. Women statistically live longer than men, and women are overwhelmingly more likely to be married to older men than the reverse. What happens when he retires and she is still working and supporting them? Who is supporting her?
Men are also risk-takers. With more than 70% of gambling — excuse me, “gaming” — apps used by men, we can see a clear delineation in risk. And in our meetings we will sometimes see the following play out anecdotally: A couple nearing retirement comes in. They are a bit short of their savings target. He says, “There’s plenty of money, we can always cut back.” She says, “Cut back where? I manage the budget, and it’s pretty tight.”
Women are worried about being a burden, especially to their kids. That fear can amplify the bag lady syndrome. It’s not just about worrying for yourself, it’s worrying for others.
How do we fix this?
The antidote to money anxiety is action.
A year ago I met with a group of women healthcare workers, mostly late-career. They were all at various levels of fear of running out of money. They said things like, “I will never get control over my money,” or “There is no way I can retire.” I asked them to try an experiment: “Instead of worrying, I want everyone to increase your savings rate by 2%. You will barely feel it. And if you do, just back down your savings by the next paycheck.”
A year later, the same group of women gathered, with some extra women this time. I asked them if they had all looked at their retirement accounts. Smiles erupted around the room. Turns out they all had. One woman said she loves it so much she looks at it every day.
I asked them to reflect on that first paycheck after the extra money came out. Did they feel it? Everyone kind of shrugged.
We moved to the next goal: opening high yield savings accounts for specific savings goals – like large car and home repairs and emergencies – or fun things they want to happen like helping adult kids, spoiling grandkids and taking vacations. Based on the enthusiastic note taking, I have no doubt those accounts have been opened already.
Bag lady syndrome as a money belief will not serve you. Jack Wooton, financial planner and professional actor, suggested that we borrow from an acting technique. “You can’t effectively ‘act’ a negative objective,” he said. And that makes sense. It’s an artificial hurdle you have to get over to get started. Instead, just figure out your motivator. Define what you are trying to do. Eliminate the hurdle.
If you’re reading this right now, finish this thought: The life I want to build is…
Then go build it incrementally. Replace anxiety with action, one (or two) savings percentages at a time.
Sarah Catherine (SC) Gutierrez is the CEO of Aptus Financial, an advice-only financial advisory firm. She holds an MPP from Harvard University and the Certified Financial Planner designation. Her firm has provided financial planning to more than 1,000 physicians and runs retirement plans, student loan programs and financial wellness programs with more than 25,000 participants. She is the author of “But First, Save10: The One Simple Money Move That Will Change Your Life.”
