- When young adults doubt their financial success—and knowledge—it can complicate decision making
The scars of the 2008 recession are one source of financial insecurity for many millennials, says financial coach Maggie Germano.
PHOTO: ALBERT TERCERO“I don’t know what I’m doing when it comes to managing my money.”
“I don’t deserve to be earning/saving/spending as much as I am.”
“I just know I’m going to screw this all up eventually anyway.”
These are some of the thoughts that run through my head whenever I open my banking app or check my credit score—me, a personal-finance reporter at The Wall Street Journal. My confidence in my job and my confidence in my own finances are two different things. And I’m not alone in feeling insecure about managing my own money.
As we discuss career trajectories and feelings of social belonging, many in my millennial generation are familiar with “impostor syndrome,” the phenomenon of doubting your own hard-won success and feeling like a fraud in certain spaces. This kind of self-destructive thought pattern can also infiltrate our feelings about our finances—and all too often does for millennials.
One source of many millennials’ insecurity is the scars of the 2008 recession, says Maggie Germano, a financial coach based in Washington, D.C. At that point, millennials were either early in their careers or still in school, so they had little or nothing in the way of reassuring experiences to fall back on. More than a decade—and another recession—later, many are still hesitant to claim their newfound success.
“They always feel things will fall apart financially,” Ms. Germano says. “I have clients who make really good money but then still worry about losing everything.”
This fear means you can have a harder time making tough money calls or trusting your own decision making. I feel this in my own life: I often agonize over seemingly simple financial moves and constantly second-guess my own instincts.
On top of that, the widening gap between those who could sustain their financial stability in the pandemic and those who couldn’t can lead to greater feelings of financial impostor syndrome, Ms. Germano says. Financial survivor’s guilt is a common phenomenon in the coronavirus pandemic and can lead those who have done well to question whether they deserve to be so fortunate.
“There are plenty of people who are not suffering during Covid and have been able to make progress,” she says. “It can definitely feel weird” for those who have escaped unscathed and maybe even were able to save more money than ever before, pay off crushing debt loads or achieve their dream of owning a home.
Truth vs. perception
Impostor syndrome is more common than many may realize. Research shows up to 82% of people report they have felt like an impostor at some point, according to the Journal of General Internal Medicine. These feelings are particularly common among minority groups and women.
On paper, I have no reason to field such negative thoughts about my financial status. I have no big debts outstanding to pay, my credit score is fine and my savings account—dare I say it—has benefited from my pandemic-era cutbacks on travel, dining and entertainment spending.
I know I made good financial decisions to get to this point. So why do I always second-guess my financial know-how?
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The silly—and insidious—thing about impostor syndrome is that it hides the truth. Of course, I am OK, which is especially clear when I talk to some of the millions of Americans who have struggled through the past year after the pandemic cut their wages, eliminated their jobs or saddled them with greater caregiving responsibilities, mounting debt and other financial obligations. Who am I to doubt if I’m doing enough to manage my finances, when so many people are still trying to get on solid footing?
Well, for one thing, I’m a woman. Historically and culturally, most of the models I see of people who are successful financially aren’t like me, a problem shared to a greater extent by people of color. “It’s this feeling of ‘I don’t belong here. The people who came before me didn’t have this,’ ” says Sarah Behr, a San Francisco-based financial planner and founder of Simplify Financial. “Whereas, white men see themselves in success from a very young age.”
Which is not to say, of course, that impostor syndrome can’t afflict white men or anyone else. But without as many models of strong financial success and confidence to relate to, women and people of color are more likely to struggle with feeling like a fraud or an outlier, two hallmarks of financial impostor syndrome.
In her work as a financial coach, Ms. Germano says she often hears clients making apologies for their financial success or hesitating to define it as such.
“There’s a tendency to attribute our successes to luck: ‘We were just lucky, we were just privileged,’ ” says Melissa Whitson, associate professor of psychology at the University of New Haven in Connecticut. “But we cannot acknowledge the fact that we are skilled or work hard.”
Finding help
Prof. Whitson’s remarks reminded me of a conversation I had with a woman earlier last year. Over the past 10 years, she had managed to pay down $50,000 of student debt—a monumental victory, but one she struggled to celebrate. She still felt like she was somehow “messing up” her money or failing when compared with other people her age.
“I just wish there was a quiz I could take that told me I’m doing everything right,” she told me. “It goes back to: ‘Am I doing enough? Should I be doing more? Can someone just tell me I’m doing OK?’ ”
“But you are,” I said, reminding her of the smart decisions she made.
But the woman couldn’t internalize my reassurance. And frankly, I related to her experience; we were both held captive by financial impostor syndrome.
Luckily for us and others, there are ways to shake off the doubts and retool our thinking. Prof. Whitson recommends reaching out to a trusted mentor and asking questions about their own financial paths. Chances are, many of your mentors—again, especially women and people of color—have battled similar negative thoughts.
“A mentor can help people realize, ‘These feelings are normal, but they are not based in reality,’ ” Prof. Whitson says. “Mentors can help normalize that for us.”
Talking more openly about these feelings with friends and peers at our own level can also help increase awareness and reality-check our own self-doubt. Once you learn to identify a thought pattern as part of your financial impostor syndrome, Prof. Whitson says, you can strip away the negative thinking that is holding you back from making progress toward your goals.
“It helps take away the power of those feelings,” she says. “You can say ‘there is that impostor syndrome again.’ Having a label helps you understand it.”
Ms. Carpenter is a reporter for The Wall Street in New York. She can be reached at julia.carpenter@wsj.com
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