If you ever feel anxious about spending money on something, even when you can technically afford it, you’re far from alone. Financial fear is an overwhelming feeling that doesn’t vanish once bills are paid or paychecks hit your bank account.
For many, this underlying anxiety can also spiral out to a more extreme condition that experts call “Bag Lady Syndrome.”
It’s not a clinical diagnosis, and the term does stem from a rather outdated stereotype around unhoused women. But Bag Lady Syndrome refers to a very real fear that affects many people, regardless of gender.
Here’s what you should know about this condition, how it manifests and what you can do to address it.
Here’s what ‘Bag Lady Syndrome’ refers to.
“Bag Lady Syndrome is a fear of running out of money and ending up financially destitute,” Lindsay Bryan-Podvin, a financial therapist and licensed master social worker with Cash App, told HuffPost.
It tends to be a deep-seated anxiety around not being able to support your lifestyle as you get older. Bag Lady Syndrome is often irrational and unrelated to one’s actual financial standing.
“Even when someone is doing OK on paper, there’s this constant worry of things all falling apart,” said Bola Sokunbi, the founder of the personal finance platform Clever Girl Finance. “I’ve found that oftentimes [it’s] less about the actual money and more about fear, safety and wanting control.”
She noted that many people with this mindset maintain a tight grip on their money and feel guilty about spending, even on things they can easily afford.
“Money starts to feel stressful instead of supportive toward their goals, and emotionally it can lead to anxiety, burnout and never feeling like you have enough,” Sokunbi said.
Bag Lady Syndrome can also lead people to keep too much money in cash or avoid investing altogether, giving up on the longer-term benefits.
“Being overly conservative financially can get to the point where it becomes ‘penny-wise, pound-foolish,” Bryan-Podvin said. “For example, driving across town to get gas that is $0.05 cheaper without considering the fuel needed to get to and from the so-called ‘cheaper’ gas station.”
She noted that those with Bag Lady Syndrome might also hoard multiples or duplicates of things “just in case.” They might also struggle to “not use” an item if they spent money on it ― even if they don’t like or need to use it.
There are psychological and societal factors at play.
“Emotional consequences include anxiety, fear and helplessness,” Bryan-Podvin said. “I see a lot of hypervigilance, which looks like imagining the worst-case scenario about the future, constantly rechecking income and expenses, or looking for news that confirms their fears about financial threats.”
She also pointed to the risk of community isolation, as people with Bag Lady Syndrome often withdraw from social events that involve spending money. And rather than suggesting alternate ways to socialize, they tend to simply say ‘no’ and ultimately stop getting invited to places. Over time, these effects can compound, impacting mental health and personal relationships.
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“This isn’t just about money ― it’s about emotional security,” said Cathleen Bell, vice president of customer research and insights with National Debt Relief. “Many people carry the burden of financial trauma, whether from divorce, caregiving, job loss, growing up in a financially unstable household or even the last few years of rising cost of living for many Americans.”
That history can foster persistent anxiety in the form of Bag Lady Syndrome. As the name suggests, this condition tends to occur in women.
“It disproportionately affects women and is fueled by long-standing societal pressures, like wage inequality, caregiving responsibilities and a lack of financial education,” Bell said.
Bryan-Podvin believes the fear is often rooted in lived experience rather than irrational thinking.
“It makes sense that women are fearful of running out of money,” she said. “Women continue to fund others before themselves, such as putting money toward their children’s education rather than their own retirement. They also have a longer life expectancy and lower average lifetime earnings than their male counterparts.”
You can take steps to address and work through Bag Lady Syndrome.
If Bag Lady Syndrome sounds familiar to you, keep in mind that it’s not a permanent state of being. There are ways to address the underlying issues driving your financial fear and adopt a healthier mindset.
“The first step is to acknowledge the fear you are feeling without judging yourself for it ― or letting others judge you,” Sokunbi said. “Wanting financial security is normal. The goal isn’t to stop caring about money, give up on financial wellness or get scared of money, it’s to stop letting fear control every decision and instead do your best, assess your mistakes and keep moving forward.”
Working with a mental health professional can help you understand your fear and anxiety and figure out ways to keep it from overwhelming your day-to-day existence.
“Know that you’re not alone,” Bell said. “Many people feel this way, especially in the current economic environment and there are steps to break the cycle.”
She urged people to separate fact from fear and get a real sense of their financial picture to foster confidence, clarity and security.
“Build a budget based on real numbers ― not fear or assumptions,” Bell advised. “Develop financial self-awareness. Get familiar with what you take in and what you spend.”
With that knowledge, set realistic goals and track your progress.
“If someone’s biggest fear is that they’ll lose their job and the domino effect that takes hold is losing their housing, sit down and crunch the numbers,” Bryan-Podvin said. “How much does it cost to live each month? How many months, realistically, would it take if you were to lose a job to find a new one?”
If the answer is three to five months, she recommended building a three- to five-month emergency fund, preferably in a high-yield savings account. And if your fear is running out of money in retirement, take steps to ensure you’re contributing to retirement accounts and increasing your contributions over time.
“Conversely, use numbers to help you enjoy your life and push back against the fear of running out of money,” Bryan-Podvin advised. “Is it really true that if you have a $14 movie night with friends, it will mean you can’t retire? Probably not. Tell yourself, ‘It’s safe for me to spend this money, and important for me to have a joyful time with my friends.’”
As you practice spending money in healthy ways, you can combat the tendency toward hypervigilance and anxiety ― all while setting a solid financial foundation.
“Reframing your relationship with money from fear-based to safety-based can make a huge difference, not just financially, but emotionally,” Bryan-Podvin said.
Building a clear plan that balances future goals and your ability to live life today is a crucial step, Sokunbi echoed.
“When you know you’re saving and investing and still allowed to enjoy your life, trust in yourself starts to build. Giving yourself permission to spend intentionally is just as important as saving,” she said. “Even small steps towards your goals can equal big progress over time and help you ditch the Bag Lady Syndrome.”