Financial anxiety is a substantial barrier for many women. This anxiety often results in women neglecting their finances. Financial neglect can impede our ability to sustain ourselves, care for our families, and make our desired impact in the world. My desire to assist those struggling with financial anxiety is the primary reason I founded Maura Madden Financial Planning.
The Biology of Panic
During my middle and high school years I dreaded getting called on in class for long answers or presentations. Although I generally know the information, as soon as I was called on I froze. I would panic, my brain shut down, and I struggled to form sentences when standing in front of a group.
Recently I read “Overwhelmed: How to work, love, and play when no one has the time” by Bridget Schulte. I came across a section in which Schulte explains that when we get stressed, hormones including adrenaline and cortisol flood the bloodstream. This was an “aha!” Moment for me. I realized that my panic at speaking in school was likely a result of this sudden release of hormones.
In addition to public speaking, I have experienced other situations and topics that caused me to shut down. Ironically, I may have learned about these physical responses sooner, but Biology was a subject that brought on panic in me for many years. It took me decades to move past a series of negative experiences in biology classes but I am finally in a place where I can appreciate the subject matter without anxiety or shame.
Financial Panic
As I reflect upon this, it occurs to me that this panic induced shut down is likely the same phenomena negatively impacting so many women in regard to their finances. As a young adult, I recall the feelings of panic and desperation that would settle upon me as I balanced my checkbook and paid my bills. I was fortunate that I have always been good with numbers. Managing money was an area in which I was confident. This allowed me to recognize that my problem was simply not earning enough money to pay all of my bills.
Someone with both a fear of money and a shortage of money, however, is battling on two different fronts simultaneously. These two money related challenges play off of one another, resulting in financial anxiety. It is hard to believe that you are competent at managing your finances when you never have enough money. And, if one believes them-self bad with money, then it is an easy next step to blame their lack of money on this perceived inadequacy. If this sounds like you, then please know you are not alone. I see people everyday, particularly those socialized as women, who fear managing their money.
Why Women?
I have several theories as to why so many women feel deficient in their financial skills and knowledge. Each person is unique and our skills and abilities are not dependent upon our gender. At the same time, I do believe that the way children are socialized can have a great influence upon their development. This is why I address much of my writing to women and those who were socialized as female.
Kids are more likely to be good at or interested in something when others anticipate their success. Boys are expected to be better at numbers and facts. Boys are frequently raised with the assumption that they will be the primary breadwinner and money manager in their family. Girls, however, are often expected to be more relational. Many girls are taught at an early age to put family before professional accomplishments. The stereotype that boys are better at numbers and girls are better at communication is harming girls when it comes to their financial success.
When we look at the financial industry, it is clearly structured to appeal to analytical rather than intuitive individuals. Go to any financial website or news outlet and you will see plenty of graphs and statistics. Additionally, our capitalist society promotes finance as a competitive rather than a cooperative field. You will never turn on a financial network and see a discussion of how we can make more businesses succeed or how the growth in GDP could translate into ending hunger. Rather, you will see people predicting what stocks, currencies, etc. will rise or fall. Particularly in recent years with greater common access to trading, many people view the stock market as a sort of competition. Investing in a stock that gain value is more than just a monetary win. It is often viewed as a victory and an accomplishment.
It is easy, then, to see how individuals who value intuitive thinking and cooperative action would feel anxious when dealing within the current financial industry.
The Backstory
I described previously how lack of money can trigger feelings of panic. Some readers may be wondering “But I’m not broke anymore, why am I still having these feelings?”
I ask you to envision a person, let’s call her Anna, who struggles with finances. Anna is in her early twenties and grapples to pay her bills. In addition to the lack of money, she feels inadequate because she doesn’t understand much of the financial language or concepts. Each time she tries to pay bills, examine her budget, consider her financial accounts, etc. she becomes anxious. She white knuckles her way through and only completes the minimum necessary tasks, putting off everything else.
What happens to Anna over time? On a logistical level, her finances likely suffer. She may incur expensive overdrafts because she is not keeping a close eye on her deposits and withdrawals. She may not have a retirement account because the idea of setting one up is too intimidating. Anna may not be spending with intention because she is daunted by budgeting. It is likely she will amass consumer debt; credit cards are intentionally set up to manipulate people into accumulating debt they are unable to pay off.
On a psychological level, Anna has not gained confidence in her financial skills. As time goes on, the feeling of being “bad with money” is repeatedly reinforced. Over the years, Anna’s feelings of inadequacy are compounded by feelings of shame that she should have learned this by now. She believes everyone else has it together and she, alone, missed the boat.
Financial Solvency Does Not Banish the Fear
Let’s move forward to a time when Anna is 30, 40, or 50. She now has have enough money to live comfortably and is able to pay all her bills. Perhaps she has a higher salary, has a partner who contributes to household expenses, has received an inheritance, or has learned to live very frugally. Anna’s newfound financial stability does not take away the feelings of shame and inadequacy that were reinforced over time. Also, being able to live comfortably does not automatically remove the barriers that compound when we don’t actively manage our finances. She may still lack savings, have consumer debt, or be burdened with bad credit.
The fear of money is not just experienced by people who are young or lack financial resources. In fact, a substantial client demographic in the financial advisory industry are widowed women who left the management of the finances to their spouse. Once widowed, they have money but are completely overwhelmed and confused by how to manage it.
No matter the cause, the feelings of anxiety are real. Feeling stress, anxiety, or overwhelm when you think about your financial situation is so painful. These psychological stressors can even result in profound physiological responses. This is not about you not trying hard enough.
Unfortunately, many times feelings of anxiety arise in areas of life which we are unable to avoid. Money is one such trigger. Money plays an enormous role in our society. We cannot eliminate the need for money. Financial anxiety can result in incapacity. Yet, money problems grow when we ignore them.
So what can we do?
My vision is that more and more women will begin to understand and feel confident managing their own finances. The more accessible personal finance becomes, the less anxiety it will produce. This is certainly not an overnight fix. Many of these are changes that need to happen at the systemic level.
Nonetheless, there are also individual steps we can each take. Visit my blog again on July 6th when, in part two of this essay, I will suggest some practical steps we can all take to feel more confident and comfortable in managing our own finances.
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