The Bag Lady Syndrome: The fear of dying broke and alone

Action, honesty and a commitment to your well-being are the ultimate keys to combating the Bag Lady Syndrome. Source: Getty Images.

Once upon a time, I had this old, homeless lady living in my head, rent-free. I felt somewhat ashamed about living with such a negative construct and I found a real dissonance between my resourceful self and this lady. Who was she? Why was she in my head? And what on Earth made me think that this was somehow related to me? I decided to get curious and started researching who she was.

What I discovered was gobsmacking – a great majority of women have this same lady living in their heads. Maybe, ever you! This was how my journey on The Women’s Money Project began. I decided if I was suffering from Bag Lady Syndrome then other women were too – and I could probably help move her out and into a mortgage and decent retirement (and thus get the bag lady off the streets!).

What is Bag Lady Syndrome?

There actually is no diagnosed syndrome. It’s just the name I came up with when I discovered the phenomenon. Trust me. It’s a real thing and it knows no bounds. In an Allianz study of 2200 women in 2013 a third of the women earning incomes of $200,000+ said they often feared losing their money and becoming homeless! The most recent Sensis reported 44.1% of homelessness was experienced by women with 23% of those women in the 18-24 age group. A report conducted by Anglicare found that older single women aged over 55 were eight times more likely to be homeless. Organisations like Fitted for Work and Dress for Success regularly work with women who were once successful and through no fault of their own have ended up with nothing. A case springs to mind of a war widow who was recently scammed out of her entire superannuation, savings and had her AfterPay account run up into the thousands! If it hadn’t been for kind-hearted people coming to her aid in her time of need she may well have ended up with nothing – another bag lady on the streets.

Multimillionaires Worry Too

Would you believe that even women who are multimillionaires lie awake at night in fear that they will lose everything? Forbes reported in 2014 that no matter your income, women of all varying backgrounds fear of losing money. And when you look at bankruptcy reports it would seem that millionaire women have just as much to worry about as low-income women. Quite often, the more someone has – the more risk they carry financially.

Scarcity Thinking

It really doesn’t matter how much money you have. The telltale sign is that you are afraid you might lose it. Scarcity thoughts are intertwined with the idea that you have no control over the outcomes of your life.

This ties into fearful anxiety which spans age groups and socioeconomic status. It exists at similar levels among widowed, divorced, married and never-married women. Making more money doesn’t necessarily solve the problem.

Breadwinners feel this paralysing fear. Women of influence feel it. In 2014 an American Psychological Association Survey Stress in America found that “women at all points along the financial spectrum say they lie awake at night and ruminate about finances”.

Worrying Themselves Sick

Financial worries can affect more than a good night’s sleep. Chronic stress can raise blood pressure, worsen cardiac and gastrointestinal problems, weaken immunity and cause migraines, as well as contribute to depression and irritability. A poor night’s sleep means the body can’t regenerate, which means more likely to get ill and then be unable to work. It’s a neverending cycle of ruminating and ruination.

Systemic Issues

Given the systemic issues women have to navigate, it’s really not surprising that a majority of women suffer from this “syndrome”. I’m referring to the gender pay gap, the lack of superannuation paid whilst on maternity leave, and workplace flexibility for women raising children. Then there is the reality for women who become single parents and all that entails. This particular demographic is most likely to suffer homelessness as an older woman – after a life of contribution.

Combat the Bag Lady

We need to consciously combat The Bag Lady Syndrome. I found that what I needed were some strategies to move her out of my head. I created 10 top tips to manage her and take her from bag to financially secure babe. The tips are pretty simple but don’t be deceived, they give great results.

Self Care

Two other things that can be enormously helpful. The first is to decide on a strategy you can use when you’re anxious in the middle of the night and this can be as simple as deep breathing, using a mantra or listening to some soothing music. The second thing is to start using the Emotional Freedom Technique to work on this issue


1. Take action: Take Control of Your Money – Take Control of Your Life

Taking action is the best way to feel in control of your money. Even small steps like budgeting, cutting back on spending or boosting savings can help. Begin by tracking what’s coming in, what’s going out and what your net balance is at the end of the month. Tracking your money and becoming aware of where it’s going is very powerful.

If you become anxious at just the thought of tracking your money, checking your bank balance or beginning to budget I encourage you to take some time out to actively soothe yourself using a mantra, mindfulness, EFT or Polyvagal Breathing.

2. Respect and appreciate money and it will grow

There are three subset rules here, and rules to live by!

  • Spend less: buy only what you can afford
  • Save more: pay yourself first
  • Invest wisely: put money in assets that increase in value over time

3. Educate Yourself

This is such an important step. Understanding your finances will help you better manage them. There are some excellent books available and there’s a heap of info online. Audible and podcasts also provide another great resource of information. I encourage women of all ages to meet with a certified financial advisor or planner to discuss life goals and develop a plan that takes into account what we need versus what we want.

4. Plan for Retirement

You can never be too young to get started with this. Value your future comfort as much as you value your comfort today. You need to send money to your future self. Think ahead and investigate what it might take to retire comfortably. Get advice, and make a plan.

5. Reassert Self-Reliance

Understand that the only person you need to support you is you. It is essential that you rely on yourself and what’s important to you. It’s easy to defer to someone else in money matters. But it’s all about your security, so don’t hesitate to jump in and become an active, knowing participant. Sometimes you won’t be sure what to do on your own, and that’s ok. Get advice!

6. Take Care of Yourself

Doing something simple to nurture yourself can be a huge stress reliever. It doesn’t have to be expensive. Watch the fear recede as you remind yourself of the things you enjoy in life. Get out and get fresh air, and dream big. What do you want your retirement to look like?

7. Connections Matter

Family, friends and professional networks go a long way to helping you to feel safe and in control of your world. So, prioritise your social life.

8. Character Counts

Many women underestimate the value of their character assets. These are the resources you bring to any issue. If you are creative, resourceful, trustworthy and hardworking you have assets in your back pocket that are more valuable than gold. Cultivate these assets wisely and they will serve you well financially.

9. Change Your Self Talk

Make conscious choices about what you are telling yourself. Catch yourself out and flip negative self talk to the positive. You might make notes in your phone and set a reminder such as ‘I save 10% of my salary’ or ‘I am financially abundant’ or ‘I receive everything I need when I need it’. Regular reminders reinforce a mindset of abundance which includes money.

10. Is the Fear Real ?

When you feel the fear rising, stop and ask yourself… is whatever you’re fearful about true? Is it real? How could it not be true? Choose to disbelieve. Call out your lying inner self – you are not the bag lady your mind is trying to tell you you are. Be compassionate with yourself.

The above might seem overwhelming so I suggest choosing three actions from this list to get started. For each of them create a scale from 1 – 10 where 10 is excellent and 1 is hopeless and every month come back to your scale to see how far you’ve shifted.

Get unstuck by taking action, creating a plan, staying focused and leaning on a community you trust. Action, honesty and a commitment to your well-being are the ultimate keys to combating the Bag Lady Syndrome.

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.

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