Even women of means, with money in the bank and a solid understanding of investing, fear ending up broke, on the street, with all their possessions in a shopping cart.
How is that possible?
The 2013 Women, Money & Power Study, conducted by Allianz, uncovered some surprising results after talking with thousands of women.
And by the way, this was no ordinary group of women. Many of those surveyed were savvy and experienced investors.
Six out of ten said they were the primary breadwinners in the family, and more than half dubbed themselves “the CFO of their household” and took active roles in handling family investments.
Almost 60% of the women polled admitted they had more earning power than ever before.
Yet, almost half said they worry about running out of money in retirement.
They confess their deepest fear is losing all of their money and becoming a “bag lady.”
According to CBS Moneywatch:
“Such concerns aren’t limited to people who are struggling financially: 27 percent of women earning more than $200,000 per year share that fear. The study found that anxiety about ending up broke are consistent across all types of women, though highest for single respondents (56 percent); it’s also a significant concern for divorced women (54 percent), widows (47 percent) and married women (43 percent).”
Clearly, when it comes to money and having confidence in their financial abilities, women have come so far, yet still have a long way to go.
We see evidence of the “bag lady” syndrome with some of our clients. Despite having a net worth numbered in the seven figures, they are often afraid to spend and worry about running out of money.
While it may be good to be frugal some of the time, it can sure get in the way of enjoying what you’ve worked so hard to accumulate!
If you suffer from “bag lady” fears, here’s some steps to take to get your financial mindset back into the comfort zone:
Do an inventory of assets and liabilities to come up with a net worth statement (or ask your financial planner to do this for you). We’ve found our women clients often have more than they realize, and once they see how solid their financial picture is, they find it easier to relax.
Come up with a realistic spending plan that shows how much you can spend each year without depleting assets prematurely. As long as you stay within those guidelines, you know you’re on the right track and have permission to enjoy some financial peace of mind.
Add luxuries like travel, shopping, family visits or whatever pushes your buttons to your budget, effectively giving yourself “permission” to spend that much each year. (And then make sure you spend it!).
Get a second opinion if you don’t have faith in your own judgment. A financial planner can be helpful in reviewing your plans, pointing out items you may have missed, and giving you feedback. In our firm, we’ve worked with hundreds of clients over the years, which gives us a pretty good handle on where you stand in relation to others, what might go wrong with your scenario, and how likely it is you’ll succeed in meeting your lifestyle and financial goals.