Are We Really Afraid of Becoming Bag Ladies?

In a recent riff for the New York Times Magazine inspired by Woody Allen’s movie Blue Jasmine — which was itself inspired by Tennessee Williams’ play A Streetcar Named Desire, so we’re layers within layers here, people — Lisa Schwarzbaum writes that her secret fear is that she will end up a bag lady. And the fear does not just belong to her; nay, it belongs to a generation. Or, really, a gender:

This is true of so many women I know. We can intuit Jasmine’s fate because ending up a bag lady is our darkest and clammiest fear. The possibility of falling into bag-ladydom is a terror so deep, so longstanding, so embarrassing to admit yet so matter of fact that we accept it as simply a part of being a woman.

For over 20 years, Schwarzbaum wrote film reviews for Entertainment Weekly. If she and her friends are scared of spending their retirements as penniless scavengers, surely those of us without the kind of cache necessary to appear in the Times Magazine should be terrified of our own apocalyptic end days. I surveyed a number of women — different races/ethnicities, ages, martial statuses, and locations around the world — to see whether Schwarzbaum’s terror resonated with them.

Along the way, I hoped to address a larger question, one hinted at by Schwarzbaum’s piece: Are women more scared of money than they should be?

Whether or not Schwarzbaum would be among the 70 percent of women who, according to a recent Allianz study, say that they find financial information hard to understand, she seems to be Carrie Bradshaw-ish about it. Her frequent references to Chanel jackets are reminiscent of Carrie’s realization, when she is forced to buy her apartment or lose it, that she has frittered away an entire potential down-payment. (“I spent $40,000 on shoes and I have no place to live?”) Spoiler alert: Carrie flirts a check out of her rich ex-boyfriend, but, seized by the unfamiliar grip of self-respect, tears it up. She then turns to her friend Charlotte, whom she guilts into handing over her obscenely expensive and now expired engagement ring. Lessons learned: Zero.

Carrie Bradshaw may well secretly fear she will end up a bag lady. Miranda and the others, probably, not so much. So, ladies, I asked, are you a Carrie/Schwarzbaum?

Here are some answers from some women who were kind enough to answer the following questions:

1) How comfortable would you say you feel about handling money, on a scale of one to five? One being “handling the bills themselves? They’re nice” and five being “oh yeah, I could work on the Street, if I wanted, but my current profession is much more fulfilling.”

2) Do you have a 401(k)? Do you know what a 401(k) is? No Googling.

3) How do you imagine retirement?

4) Have you ever spoken to a financial planner or any kind of money guru to talk through decisions?

5) What did you think about the piece in the Times insinuating that every woman’s secret fear is that she will end up a bag lady? Did it resonate with you?

Millennial in Cambridge, Mass.

1) I’d say 4. I have two issues that keep me from being a 5. First, the next couple of years will be the first that I’ve ever had without some sort of salary, consulting, or stipend income. I’ve been saving for this time essentially since I decided to go to grad school and have a big cushion saved up, but as a natural saver, I worry about letting myself spend that money and also what happens if I run out. My second concern relates to my existential concerns about retirement, which I detail in question 5 below.

In general though, I’m very comfortable both with managing the day to day expenses of my life and with saving and planning for the future. I never got any formal training in this. Personality wise, I’ve always just liked putting my extra cash in the bank and then spending on a big ticket item rather than lots of little items. And my big ticket stuff (usually trips) has never taken up all of my savings, so it’s just grown over time. It never occurred to me to not have jobs throughout high school and college. I’ve also been lucky in that my last job before I went to grad school paid very well, and I was able to save about a third to half my salary a year during that time. When I first started working out of college and set up my retirement accounts, I was a little nervous about getting it “right,” but now I think as long as you have a variety of investments in your portfolio, you’ll be fine. I also had the extreme privilege of having my college education paid for, so I did not have to worry about loans. My employer subsidized 90 percent of master’s so I was able to pay for the rest of that from savings, and I was very clear in my choice of grad schools for my Ph.D. program that I had to be good enough that they would pay me to go.

2) I don’t have a 401(k), but I do have a 403(b), the non-profit equivalent of company-sponsored tax-advantaged savings plan. I also have a Roth IRA which I contribute to in addition to the contributions from my job (the Roth is currently the only place I’m contributing to as a grad student without employer contributions). I try to contribute $5,000 to the Roth a year. My understanding is that the Roth is a good idea, as opposed to a regular IRA, if you think your tax bracket will be higher when you retire than when you contribute, as you do have to pay taxes on the 403(b)/401(k) and regular IRA income when you take it out, but not with the Roth.

I use to track my expenses, and I also am using it to track my savings for retirement. I had to put in some assumptions to do this — that I will retire at age 75, live to 90, live on $40,000 a year in today’s dollars in retirement, and an assumed interest rate and portfolio growth rate. Thanks to Mrs. Tribbey in 7th grade math I know about the miracle of compound interest, so I am trying to put in as much now as I comfortably can. Mint calculated that with these assumptions, I’d need to save about $2 million by retirement. I checked today and with about $54K of retirement savings, I am “one month ahead of my goal!”

3) I imagine retirement to be a lot like grad school — I can still have fun and see my friends, but I need to be thoughtful about big ticket purchases and things like rent and whether or not to own a car. I know a lot of people count on having a house to fund their retirement — either to sell and move somewhere smaller or to borrow against. I’m not particularly attached to the idea of having house, but I know if I don’t own any property outright I have to be more conscientious about saving cash money.

4) Nope. I occasionally discuss my portfolio allocations with my mother or brother. I got really annoyed when my employer changed its default retirement account to a “Target Year” retirement strategy. They are supposed to automatically adjust your stock/bond ratio as you get older, but I wanted my portfolio to be a little riskier than they have because I have a lot of cash savings as well. I read the paper and research particular funds at my bank when I make my Roth contribution every year. I tend to use index funds rather than managed funds because the fees are lower and they have better track records. I also like to invest in “developing markets” because it seems fun and also where I see the future anyway. To me, all of these things were kind of duh with a little bit of internet research. At various times I’ve read the blog Get Rich Slowly, but haven’t read it in the past few years.

5) I’ve never thought I’d be a bag lady. I think this day nightmare shows a lack of creativity. I have thought about what I would do if I weren’t able to save as much as I want for retirement and if I didn’t have a spouse to retire with. My sister and I have talked about living together when we’re old, and I thought the NPR story about living with friends in a group house to be much more resonant with me. That’s my plan if retirement doesn’t go the way I think it will.

The things I really fear aren’t being a bag lady, but are more about expectations and what happens if life doesn’t go according to expectations — what if life expectancy continues to rise in the U.S. but the number of “good years” doesn’t? What if I am planning to live to 90 but live to 100? Can I really keep working until I’m 75? What’s the plan if I get Alzheimer’s or dementia? Will I rely on my hypothetical children or long-term care insurance?

How will I care for my mother if she gets sick or senile in her old age? As the oldest girl child and because of my personality, will all of that care rest with me instead of my sibs? Will I be able to work and save for my own retirement if I have those responsibilities? And how do I balance saving for my own retirement against saving for having kids and eventually sending them to college?

These all seem a lot more salient to me rather than becoming a bag lady. Also, anyone who’s done a little bit of social science research knows that the persistently homeless often have issues beyond penury. Having a social safety net means that you have the social resources to be resilient to set backs. I hope I won’t be afraid to ask for help if that is what I need.

Generation X in Mexico City, Mexico

1) In New York when I was working, I would say four. I knew the breakdown of our expenses and felt comfortable living my typical lifestyle without having to think too much about it. I paid about half our bills and my husband paid the others. This was more because we considered the actual bill-paying a chore than because we split expenses; all our accounts are joint.

I stopped working in mid-July. We moved to Mexico for a family adventure in part because the cost of living is lower and we don’t both need to work. That said, it is my first experience since childhood as a “dependiente” — a dependent. I am on a visa that doesn’t allow me to work, and I have full access to our income but am not working in an office to earn it. Here, I am not in charge of any bill-paying so far, and I don’t have a full sense of what life should cost in pesos. Maybe this is what women back in the day used to feel when they were less educated around finances. I asked my husband to help me calculate a daily allowance. It’s not like “Mad Men” where he hands me a wad of cash, but I wouldn’t know what I could spend without asking.

2) I have a 401(k) from a previous job that is piddling. I opted out of a 403(b) at my next job in favor of doubling what we saved in my husband’s plan because it got matching contributions and was therefore a better deal for us as a couple.

3) I imagine retirement as probably realistically part-time work. I am thankful that unlike in Mexico, it is not legal in the U.S. to post that you are looking for a woman employee between the ages of 25 and 35. Though I admit to feeling some pressure to stay current with my résumé since I think there are unspoken prejudices along those lines that do influence hiring decisions.

4) I do have a financial planner but do not consult often. Mostly I discussed figuring out which loans I should pay off; I ended up paying off college and grad school since the interest rates were high in lieu of having more savings.

5) I thought the piece was pretty terrible and I pitied the author for having such a small social net. The only way it resonated was in terms of my relationship with my husband this year. Though we have a perfectly authentic and loving marriage, I admit to moments where I had inklings of wanting to kiss up to him not as a partner, but in the way one would to stay in a boss’s good graces. After all, if our love soured when my toddler and I were so dependent on him, where would we be? Thankfully we are devout graduates of the very liberal liberal arts and so we are postmodern partners in the expatriate world of “playing house.” Or are we? 😉

Millennial in Victoria, Australia

1) I would put myself as a three. I am currently navigating the baffling process of sorting out tax for last year in the U.K., the U.S. and Australia, and it is genuinely tough. However, I have never felt frightened or inadequate in terms of financial planning, even though years of freelancing and part-time work and travel haven’t left me with a huge amount to plan for.

2) I had a 401(k) which I enthusiastically started with my earnings from my summer job after my freshman year. I closed it this year, as the fees were costing about $100 a year which was far more than the interest it was earning — I think I lost about $1,000 before closing it out to pay for some further education.

3) My mother hasn’t retired, at age 68, and my father hadn’t retired when he passed away at age 76, so it’s also possible that I may not stop working, but will instead find work that I love and keep doing it. That is as much a part of my vision for retirement as anything. If I did stop working, well, over here there is a phenomenon called the Grey Nomads — people trading the house for a caravan, pulling up roots and adventuring all over the country. Lots of free campsites cater to this lifestyle, and it seems like a pretty amazing way to spend some years.

4) Never [spoken to a financial planner], although perhaps I should now that I have a steady job with steady income. I’ve tended to use relatively high-interest savings accounts instead of more complicated investments.

5) I thought [the bag lady piece] was strange. I have never worried about becoming a bag lady. I think my family network and my friendship networks are too strong for that to happen. While I may not be wildly rich and live in ultimate comfort, my partner (a visual artist) and I have taken pleasure in living creatively within our means. I can easily imagine living in a share house longer than I’d like to, not having access to a car, or some other inconveniences, but the “bag lady” fear has never even occurred to me. I wonder if our generation, able to maintain contact with vast networks via Facebook or ask a friend of a friend for a place to stay on Couchsurfing are really afraid of the sort of alone-ness she’s talking about. I have no fear that, barring a fall into severe mental illness or addiction, there would be enough support for me to find my feet if need be.

Generation X in Los Angeles

1) Ok, maybe I’m 2.5. I pay my bills, know how much money is in the bank & various account, have a financial advisor but wish I was rich enough to have someone (that I trust) to take care of it all!!

2) Yes. Thank you financial advisor.

3) From a monetary angle, I wish I’d started saving when I was younger but glad I started when I did. I hope to travel and have as much time as I want to write as many poems as I can!

4) Yes, I have an excellent advisor (thanks Joy!) who has really spelled out “what the future looks like” based on my projected “desires” and the savings and retirement pay I’ll get from my current employer. I recommend that anyone without the personal requisite skills thee to such a person immediately!!

5) The piece hit a nerve with me primarily because my wonderful advisor has exposed the real problem with retirement: inflation. Without it, I’d be fine forever…. with it, I’ll have to “dial it back” from my accustomed lifestyle. And if I live as long as two of my grandmothers (100+), I may be in trouble. I’m scouting out freeway underpasses now ….

Generation X in Washington, D.C.

1) Not at all. I’m maybe a .5 on that scale.

2) I had one through my last job, til I got laid off. It’s still being held in my old company’s account, and will stay there (don’t ask me how that works, because I don’t really know) til I roll it over into my next job’s 401(k) plan.

3) I imagine it being like, lots of travel and lots of working on projects that don’t generate money because I won’t have to worry about it at that point, but I don’t necessarily think that vision will become reality.

4) Yes, I have a guy at my bank. I meet with him about once a year, and he talks me through what he thinks would be good decisions for me, and I try to pay attention and make sense of what he’s saying, but my eyes usually glaze over pretty quickly, and I end up deferring to him and his advice rather half-assedly. Sometimes I consult with my mom before making those moves, because she has a good head on her shoulders with regard to financial stuff.

5) It resonated with me, but if “every woman” has this exact same concern, then that’s news to me. (Yeah, I doubt “every woman” feels this way, NYT.) Then again, the piece shows that it’s a concern for at least some other women, and that surprised me. I thought I was unique! Maybe I should talk to more of my friends about this stuff; maybe some of them are feeling the same way? I’ve confided in a select few friends about this issue, both male and female, when I get really scared, and they usually just tell me it’s all going to be ok and that I’m thinking too fatalistically; I’ve never heard “Yeah, I have that exact same concern for myself” from a friend.

Millennial in Beijing, China

1) I’d say I’m about a 3. I have a good handle on my finances, I’m always aware of what bills are coming due and how much I have in the bank. The only reason I wouldn’t put it higher is simply because China is a cash nation, so I’m forced to handle money in a less-than-organized fashion most of time. Case in point — my landlord comes over the apartment once every three months and I hand her a stack of cash. She does write me a receipt for it though, so at least there’s that…

2) I don’t [have a 401(k)], but I have what is essentially the Chinese equivalent. Any foreign workers on a legitimate working visa has money deducted from her paycheck for what they call “social insurance.” A small portion of it each month goes into a bank account that I have direct access to for medical emergencies, and a sizeable chunk gets socked away into a pension account that I will not be able to access until I decide to permanently leave China. This account will move with me from company to company, so it essentially operates like a 401(k), although without any other contributions save my own (involuntary) ones.

3) I’m not sure that I can imagine retirement, at least not yet. The thing is, I’m only 30. And I know, advance planning and all that, but also life has enough stress as it is. I think that I would like to eventually work for myself, and that’s obviously going to shift how I think about retirement. Unfortunately the lack of access to health care in the U.S. without working full-time for someone else is keeping me from pursuing this at the moment, but that’s another can of worms altogether.

4) I have not [spoken to a financial planner], but mostly because they give off the appearance of being shady. Well, at least here in Beijing they do. I’m constantly getting cold calls from financial planning firms and they are downright creepy dudes.

5) That Times piece did not resonate with me at all. I have not once ever thought about ending up a “bag lady,” like not even a passing thought. So I don’t understand how the author feels so confident that it’s a universal female fear. Not only that, but that she and her friends can exchange knowing looks about it as they pass homeless people in the street. If I see a homeless person, my first thought is, “I hope she’s ok,” not “I hope that’s not me someday.”

A more interesting question for her to ask in that article would have been, “Does this story still work if the main character is male?” That’s an article I would be interested in reading. As it is, reading this article is kind of like stumbling across a stranger’s diary in a cafe. She’s living in an alternate reality where she assumes that because she is female her thoughts and feelings are thus universally applicable to all women.

Ester Bloom lives in Brooklyn. Photo: Joshua Ganderson