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Are you a woman who has overcome obstacles? Earned and saved money? Prepared for your retirement? Advanced in your career? Despite everything you have accomplished and all the hardships you have conquered, do you still worry that you will spend your retirement in abject poverty? Do you still fear that you will end up a bag lady on the streets?
If you have answered "yes" to the questions above, then you are probably suffering from the Bag Lady Syndrome.
This condition refers to the fear that one will end up homeless, destitute and alone. According to financial experts, the Bag Lady Syndrome is a common fear among women, even those who have high income and net worth. BlogHer's Maria Niles talked about the fear of being a paycheck away from homelessness during the height of the recession back in 2008. The recession has ended, but fear and uncertainty remains.
One of my financial nightmares would be homelessness. I have never come close to homelessness, and I hope I never will. But I read and hear stories of good people who have fall into that pit because of a string of bad luck, or unfortunate mistakes, or medical issues, or lack of a social support group, or some combination of the aforementioned, and I think, there but for the grace of God go I.
Here are some steps I will take to combat my fear of becoming a Bag Lady:
1. Save, save and then save some more. The earlier you start, the easier it is to accumulate a nest egg that will see you through your dotage. I will use any and all means of saving at my disposal: 401K, Roth IRA, and SEP IRA for my freelance income.
2. Invest in my career. For most people, their career is their biggest income-generation tool. I plan to invest in my career by staying on of industry trends, continuing my education and refining my skills, and maintaining a network of contacts and colleagues.
3. Buy and pay off a single family home by retirement. Housing costs generally eat up the biggest portion of a family's budget. Many people who fall into homelessness do so because they fall behind due to a financial mishap (a layoff, a medical emergency), and cannot afford the housing bills any longer. If I own my home free and clear, there are very few instances when I will lose the roof over your head.
(For more ways to escape the Bag Lady Syndrome, check out posts by Money Wise Women Blog and Simply Forties.)
I realized how important #3 is when I came upon a blog post by Funny About Money, a blogger who lives in Arizona. She recently wrote about her year of living on a $22,000 income after her teaching position was downsized. Although the year was challenging, Funny About Money had paid off her mortgage years ago. She owned her home free and clear. Therefore, she was able to get through a year of unemployment without the fear that she would be out on the streets because she couldn't meet her rent or mortgage payment.
I am hopeful that if I follow through on those three steps, my old age will be in relative comfort, not in penury. Do you have The Bag Lady Syndrome? How do you combat the fear?
Savvy Living Through Personal Finance | @WellHeeledBlog
Photo Credit: Mary Catherine | Original for BlogHer
