Cover Story: Bag Lady Syndrome

The psychology of money for women

Waking up in the middle of the night, her heart pounding, a woman tries to calm herself down from the nightmare of having to live out of a shopping cart because Social Security disappeared and her retirement savings aren't enough to sustain her.

Who is this woman? She's your co-worker, your boss, almost any woman who wonders if she'll ever be able to quit working.

The fear comes from not being aware of our spending and earning habits, according to Mikelann Valterra, a Seattle-based financial recovery counselor and author of Why Women Earn Le$$. She believes the relationship women have with money is controlled by subconscious ideas ingrained during childhood and embedded in our culture to the point that we're not aware of them.

"You can say you want to make money, but you're constantly hamstringing yourself if you feel negative things about wealthy people," Valterra says. "Why would you let yourself become that which you despise?"

Her advice is simple but difficult to implement.

"Getting clear about where you are right now is essential," Valterra says. "Become conscious.

First identify the psychological blocks. Figure out the unconscious belief systems that are operating. They're running rampant and impacting what's going on."

Maria Marsala — a successful consultant, coach and trainer in Seattle — enjoyed financial and professional success during her years on Wall Street and wanted to achieve similar results on her own terms. While making a good living, she was falling short of her personal expectations.

"I didn't always want to identify the difficult things going on in my life," she says. "But now I don't mind putting labels on something and fixing it. When I found the label 'noble poverty,' all of my issues fell into that."

Valterra coined some terms to help those struggling with money issues:

· "Noble Poverty" — the continual practice of earning less than one needs based on the belief that there's virtue in not having money

· "Romance Myth" — the belief that women will always be taken care of, based on the classic marital bargain that if a woman creates a home, raises children and behaves properly she'll be provided for

· "Money Fog" — a form of self-induced vagueness about money, being financially unaware, characterized by "waiting for the other shoe to drop"

· "Good Girl Syndrome" — a combination of needing to feel liked while at the same time fearing making someone angry or causing displeasure ("Will they still like me if I ask for more money?")

"Cognitive abilities don't have anything to do with how you spend money," says Diane Halpern, director of the Berger Institute for Work, Family and Children. "It's based on feelings of security, how you're raised, social class and so many other things."

Valterra cites common examples, from religious sayings ("It's easier for a camel to pass though the eye of a needle than for a rich man to enter heaven") to clichés such as "Money doesn't grow on trees."

She suggests starting with three questions: Are your needs being met? Are you enjoying life? Are you saving for the future? Then look for what's missing.

Once Marsala identified noble poverty as her stumbling block, she looked to her past for clues.

"I was a junior trader ... in the late '70s and early '80s," she says. "It was hard for single women to get what they deserved, because employers had a 'You don't have a family' attitude. When I was offered a move to a different department and the salary was going to be over $100,000, I flipped out. I realized the salary was right, but hitting the $100,000 mark has been a tough one for me to get over. At 20, I was making more than my parents."

This helped her to see that, in her consulting business, she wasn't going after large clients, thereby avoiding a significant jump in earnings.

Acknowledging it takes courage and strength to do that work, Valterra encourages women to develop awareness.

"Imagine the woman you will be in 30 years," she says. "Where does she live? What kind of life does she lead? Is she happy? Commit now to taking care of her, and from the bottom of her heart she will thank you. Her future lies in your hands." ©

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