What is 'bag lady syndrome'? The money fear we are still not talking about

There is a particular kind of money anxiety that can show up even when your bank account is healthy. You have savings, a steady income, investments, maybe even a home, yet some part of your brain keeps running the same bleak scenario: What if it all disappears? What if I lose my job, my savings run out, something happens to my family, and I end up with nowhere to go?

The image behind this fear is an old one, of a woman carrying everything she owns in shopping bags. It is known as "bag lady syndrome", a term that has been used since the 1970s to describe the fear of becoming financially destitute. And while it is not a medical diagnosis, it is a very real form of financial anxiety.

The phrase might sound dated, but the fear is very current. Women today are earning more, investing more, and building wealth of their own, while also living through a period of rising costs, unpredictable job markets, and constant conversations about economic uncertainty. Research published in 2025 found that women reported significantly higher financial anxiety than men across a sample of more than 96,000 people in 114 countries. Research papers and surveys claim that women are more likely than men to worry about large unexpected expenses, rising prices, and having enough money for retirement. So even when the fear is bigger than the actual financial risk, there are plenty of reasons why women may have learned to take financial security very seriously.

One of the strangest things about the bag lady syndrome is that it does not necessarily alter itself depending on how much money you have. The anxiety that they will lose their financial freedom and end up with nothing has been observed in women belonging to all age groups and income groups.

Part of the anxiety comes from the fact that women have historically had more financial vulnerability built into their lives. Career breaks for childcare or caregiving can affect lifetime earnings, savings, and retirement contributions. Women also tend to live longer, meaning their money may need to last for more years. And the world might be changing, but pay parity is still very much real, and there still exists a stark contrast between the incomes generated by men and women in most parts of the world.

There is also the emotional side of money. If you grew up hearing that money could disappear overnight, watched a parent struggle after a divorce or job loss, or were taught that being financially dependent on someone else was dangerous, having savings can become less about enjoying security and more about protecting yourself from an imagined future disaster.

The problem starts when preparing for the worst means you never feel allowed to enjoy what you have. You might keep increasing your emergency fund long after it is adequate, feel guilty about spending on something you can comfortably afford, avoid investing in the market because losing money feels unbearable, or constantly check your accounts for reassurance. Saving is sensible, but living as though bankruptcy is always around the corner can be exhausting and stressful.

And no, you cannot simply tell yourself to stop worrying and be magically fine overnight. Financial confidence often comes from knowing exactly what you have, what you need, and what would happen if your circumstances changed. A realistic emergency fund, insurance, retirement plan, and investments can give the fear some break. It can also help to separate a genuine financial risk from an anxiety spiral.

Perhaps the biggest shift is understanding that financial security is not the same as never feeling afraid. For many women, building wealth has involved creating a safety net they were never sure they would have. The goal now can be to trust that safety net enough to actually live inside it.

Lead image: Getty Images

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