Combating the Bag Lady Syndrome - Part 3

For many women, regardless of age, marital status and socioeconomic class, Bag Lady Syndrome is real. The fear of losing everything and being left with no financial means is scary. It can become an internal battle that can cause anxiety about the future. The fear bubbles to the surface and we work hard to overcome it…for a while, at least. If the fear has been docile for a while, chances are it’s not now, given the recent pandemic and global economic recession.

Although some economists might argue that we have recovered from our latest period of economic recession, financial worries and the Bag Lady Syndrome will probably be top of mind for many months to come. Having said that, there are things you can do to put yourself in a position to weather this storm and put fears to rest, and we are covering those things in a series of Bag Lady Syndrome blogs.

This blog focuses on knowing where your money is going. Life is busy, so it’s easy to lose track of where your money is going. That makes it especially important to periodically review your bank records and credit card bills for the last several months.

That doesn’t always mean budgeting, but it does mean you know how much you are spending and where. Armed with this information, you can make course corrections to help you weather storms, like the economic one we are entering.

If you are single or you and your partner keep your finances separate, this will be relatively easy. If you and your partner have combined finances, this means taking into account all household spending. If possible, get your partner involved in this as well.

For this task, gather the bank statements and credit card bills for the last few months. Consider keeping a tally as you look at the monthly statements – how much was spent on fuel, restaurants, department stores, at the grocery store? Armed with this information, make a plan.

If you are worried about losing your job or a decrease in income, now is the time to set limits on discretionary spending and knowing how much are spending in the first place is helpful. Even if this doesn’t become a permanent change in the way you handle your finances, it can be temporary – just to get you through the next several months.

If your job and income are secure, simply knowing where your money is going is a powerful tool to counter the Bag Lady Syndrome fear.

- Juli Erhart-Graves, CFP®, Worley Erhart-Graves Financial Advisors