How Imposter Syndrome Can Sabotage Your Finances
- Davina Jackson
- Jul 26, 2024
- 11 min read
Updated: Aug 1, 2024
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Imposter syndrome... that nagging feeling that you're not truly qualified.
... That you don't deserve your achievements.
... That at any moment, you'll be exposed as a fraud.
It’s a feeling of being perpetually one step away from failure, despite your accomplishments and hard work.
But it goes deeper than affecting your mental health and self-esteem.
Imposter syndrome affects your money by quietly eroding your financial stability and growth.
It's a silent saboteur that affects many, but its impact on women - especially women of color - is the most profound and far-reaching.
Let's change that.
In today’s blog post, we're going to talk about imposter syndrome and discuss what it is, how it affects your wallet, and provide strategies to overcome it - with a particular focus on its impact on women and women of color.
So, let's dive in and tackle this issue head-on, and empower you to break free from imposter syndrome so you can achieve the financial success you deserve.
Are you ready? Let’s go!
Instant Gratification Zone: Skip to the Good Stuff
What is Imposter Syndrome?
Imposter syndrome is a psychological pattern where individuals doubt their accomplishments and have a persistent fear of being exposed as a "fraud."
It’s an internal experience of intellectual phoniness that is particularly common among high-achieving individuals who find it difficult to accept their successes.
Instead of celebrating their achievements, they often attribute them to luck, timing, or even deceiving others into thinking they're more competent than they believe themselves to be.
Imposter syndrome can manifest in various ways, affecting your thoughts, feelings, and behaviors such as:
Perfectionism: Setting impossibly high standards and feeling like a failure when you don't meet them.
Overworking: Putting in excessive effort to prove your worth, often leading to burnout.
Discounting Success: Dismissing accomplishments as not being a big deal or attributing them to external factors.
Fear of Failure: Avoiding new opportunities or challenges due to fear of not measuring up.
Self-Doubt: Constantly questioning your abilities and fearing that others will see through your "facade."
Most importantly, it doesn't arise out of nowhere. It's often rooted in a mix of personal, familial, and social factors.
Some of the most common personal, familial, and social factors triggers and causes are:
Upbringing: Overly critical or high-expectation environments can foster feelings of inadequacy.
New Roles: Starting a new job, taking on a leadership role, or entering a competitive field can trigger imposter feelings.
Comparisons: Constantly comparing yourself to others, especially in the age of social media, can heighten feelings of inadequacy.
Cultural Expectations: Societal pressures and stereotypes, particularly around gender and race, can exacerbate imposter syndrome.
If you recognize these symptoms and triggers, you may be affected by imposter syndrome which may be subtly influencing your thoughts and actions, particularly in your professional and financial life.
The good news is by acknowledging its presence, you’re taking the first step towards overcoming imposter syndrome and can begin reclaiming your self-worth and financial confidence.
Imposter Syndrome and Your Finances
As someone who’s suffered from imposter syndrome in the past, I can tell you that it doesn't just stay in the realm of thoughts and feelings. It has real, tangible effects on your money.
Here are the most common ways (and a few that I’ve experienced myself) where imposter syndrome can impact your finances:
Impact #1: Hesitation to Negotiate Salaries and Ask for Raises
One of the most direct financial impacts of imposter syndrome is the hesitation to negotiate salaries or ask for raises. Because when you feel like you're not truly deserving of your position, it becomes challenging to advocate for your worth.
You might accept the initial offer without question or avoid discussions about raises altogether, fearing that asking for more will expose your perceived inadequacies.
Over time, this can lead to significantly lower earnings compared to your peers who negotiate assertively.
That’s why it’s important to know (and constantly remind yourself) of your worth.
Impact #2: Undervaluing Your Skills and Work
Imposter syndrome often leads to undervaluing your skills and contributions. You might consistently undercharge for your services, accept lower-paying jobs, or avoid pursuing higher-paying opportunities because you believe you're not qualified.
This mindset can result in a career trajectory that doesn't reflect your true potential, leaving you financially underappreciated and struggling to make ends meet.
Impact #3: Reluctance to Pursue Higher-Paying Opportunities
When you're plagued by self-doubt, the thought of applying for a higher-paying job or seeking a promotion can be intimidating.
You might convince yourself that you're not ready or that you won't be able to handle the responsibilities, even if you are more than capable.
This reluctance to pursue growth opportunities limits your career advancement and earning potential, keeping you in positions that don't fully utilize your skills or reward your efforts - leading to stress, exhaustion, and burnout.
Impact #4: Increased Stress Leading to Poor Financial Decisions
The constant anxiety and stress that accompany imposter syndrome can also lead to poor financial decisions.
Stress can cloud your judgment, making it difficult to think clearly about your finances. You might avoid budgeting, delay important financial planning, or make impulsive spending decisions as a way to cope with the stress.
These behaviors can exacerbate financial instability and create a vicious cycle of stress and poor financial health.
The Cumulative Impact on Your Financial Health
The cumulative effect of these factors can be profound, where, over time, the financial impacts result in:
Lower overall earnings
Slower career progression
Increased debt due to poor financial decisions
Decreased savings and retirement funds
Greater financial stress and anxiety
How Women Are Uniquely Affected
Understanding the financial impact of imposter syndrome is crucial, but it’s equally important to recognize how it uniquely affects women.
Women often face additional layers of societal pressure and stereotypes that exacerbate imposter syndrome.
Gender Stereotypes and Expectations
From a young age, many women are socialized to doubt their abilities and defer to others.
Societal expectations often dictate that women should be nurturing and modest, leading to internal conflicts when they pursue ambitious career goals or advocate for themselves financially.
This cultural conditioning can make women more susceptible to imposter syndrome, causing them to question their worth and capabilities in professional settings.
The Double Bind of Perfectionism
Women frequently face the double bind of needing to be both competent and likable, which can drive perfectionist tendencies.
The fear of making mistakes or being judged harshly can lead women to overwork and under-assert themselves, particularly in negotiations or leadership roles.
This perfectionism not only impacts their mental health but also their financial well-being, as they may settle for less than they deserve or avoid opportunities for growth.
Intersectionality: The Impact on Women of Color
For women of color, the intersection of race and gender presents additional challenges.
They often navigate multiple layers of bias and discrimination, which can intensify feelings of imposter syndrome.
The pressure to prove oneself in environments where they are underrepresented can lead to heightened stress and self-doubt.
This intersectional experience means that women of color may be even more reluctant to negotiate salaries, ask for promotions, or pursue high-stakes opportunities, further limiting their financial advancement.
We'll talk more about this in the next section.
The Confidence Gap
Studies have shown that women generally underestimate their abilities compared to men. This confidence gap is a significant barrier to career progression and financial success.
Women might hold back from applying for jobs unless they meet 100% of the qualifications, whereas men are more likely to apply even if they meet only a portion of the criteria.
This hesitation can result in missed opportunities and slower career growth, directly impacting their earnings and long-term financial health.
Work-Life Balance and Financial Trade-Offs
Women often juggle multiple roles, balancing professional responsibilities with caregiving and household duties.
This balancing act can contribute to imposter syndrome, as women may feel they are not excelling in any area.
As a result, the stress of managing these competing demands can lead to financial trade-offs, such as taking lower-paying, more flexible jobs or reducing work hours to accommodate family needs.
The Added Challenge for Women of Color
Our discussion of how women are uniquely affected by imposter syndrome isn't complete until we talk about the specific challenges faced by women of color.
These challenges, often magnified by the intersectionality of race and gender, create an even more complex landscape to navigate.
But first, let's talk about why we must address these challenges.
It's not because I’m a Black woman who has experienced some of these first hand (and, therefore, this topic is very important to me).
It's because mainstream conversations generalize experiences (especially women's experiences) and overlook the compounded effects of race and cultural barriers.
This results in a lack of recognition for unique pressures and systemic biases that we women of color encounter on a daily basis - further amplifying our feelings of inadequacy and self-doubt.
Simply put, these challenges do not get enough attention; and addressing them is integral to the success of all women.
So… we’re going to talk about it. Because when you know better, you do better.
The Complex Landscape Women of Color Must Navigate
Area #1: The Intersectionality of Navigating Multiple Identities
Women of color often find themselves at the crossroads of multiple identities, each carrying its own set of stereotypes and biases.
This intersectionality means women of color are not only battling gender-based discrimination but also racial prejudices.
The cumulative effect of these biases intensifies feelings of imposter syndrome, making it harder for women of color to feel a sense of belonging and validation in professional environments.
Area #2: Higher Standards and Greater Scrutiny
Research indicates that women of color are held to higher standards and subjected to greater scrutiny compared to their peers.
They feel continued pressure to constantly prove themselves, fearing that one mistake could reinforce negative stereotypes about their race or ethnicity.
This heightened pressure leads to overworking, burnout, and a reluctance to take risks, all of which is known to stifle career advancement and financial growth.
Area #3: Limited Representation and Mentorship
The lack of representation of women of color in leadership positions and influential roles IS REAL and contributes to a sense of isolation and imposter syndrome.
Without visible role models or mentors who share similar backgrounds, women of color struggle to envision themselves in higher positions of power and success.
This gap in mentorship hinders professional development and limits access to valuable advice and opportunities.
Simply put: Representation absolutely matters
Area #4: Microaggressions and Workplace Culture
Microaggressions - i.e. subtle discriminatory comments or actions - have a profound impact on women of color.
These (often) daily slights erode self-esteem and exacerbate feelings of inadequacy.
Navigating workplace cultures that are not fully inclusive or supportive adds another layer of stress, making it a challenge to assert one’s worth or negotiate for better compensation.
Area #5: Systemic Barriers to Financial Equity
Systemic barriers, such as wage gaps and limited access to capital, disproportionately affect women of color. Full stop.
These barriers are known to result in lower salaries, fewer opportunities for advancement, and greater financial insecurity.
As a result, the compounded effect of these systemic issues and imposter syndrome make it difficult for women of color to build wealth and achieve financial independence.
Yes, overcoming these hurdles is hard work. It requires support, resilience, and systemic change.
But if we fight hard enough ("we" meaning all women), women of color can break through barriers and achieve the same financial and professional goals as our non-women of color counterparts.
Steps to Overcome Imposter Syndrome
Overcoming imposter syndrome isn’t a one-size-fits-all process.
You have to take strategic and determined steps to build confidence, assert your worth, and take control of your financial future.
Here are the steps I’ve used (and continue to use) to fight imposter syndrome:
Step #1: Acknowledge and Re-frame Your Thoughts
The first step in overcoming imposter syndrome is recognizing and acknowledging it.
Pay attention to the negative self-talk and doubts that arise in your mind, and reframe them instead of dismissing them.
For example, if you find yourself thinking, "I don't deserve this promotion," counter it with, "I earned this promotion through my hard work and skills."
This is called cognitive re-framing and can help shift your mindset from self-doubt to self-assurance.
Step #2: Celebrate Your Achievements
Women often downplay their successes, attributing them to luck or external factors.
We’re going to stop that right now. You know you worked your ass off that success. Let’s celebrate you, loudly.
Take time to celebrate your achievements, big or small. Keep a record of your accomplishments, such as positive feedback, successful projects, or milestones you’ve reached.
Reflecting on these achievements reinforces your sense of competence and reminds you of your value.
Step #3: Seek Mentorship and Support
Building a support network is essential. Seek out mentors who can offer guidance, share their experiences, and provide valuable advice.
Surround yourself with supportive peers who understand your journey and can offer encouragement.
Don’t be afraid to lean on this network when you need reassurance or perspective.
Step #4: Develop a Growth Mindset
Adopting a growth mindset that emphasizes learning and development over perfection is transformative.
Understand that making mistakes is a natural part of growth and that each setback is an opportunity to learn and improve.
So, instead of saying “I failed”, say “welp, I just learned what didn’t work for me. Let’s try something else.”
This mindset shift reduces the fear of failure and encourages you to take on new challenges with confidence.
Step #5: Set Realistic Goals
Setting realistic, achievable goals helps you incrementally build confidence.
Learn to break down larger objectives into smaller, manageable tasks. (I call this “chunking”)
Then, celebrate each step you complete, so you have a sense of progress and motivation.
Over time, these small wins will add up into significant achievements, reinforcing your sense of capability.
Step #6: Practice Self-Compassion
Give yourself grace. Give yourself grace. Give yourself grace.
(I say this 3x because I want you to get this into your spirit. The world is hard enough, girl. You don’t need to beat yourself up too.)
Practice self-compassion by acknowledging your efforts and forgiving yourself for any perceived shortcomings.
Treat yourself with the same kindness and understanding you would offer your best friend.
Better yet, be the person your inner little girl needs.
Remember that everyone experiences self-doubt at times. It doesn’t diminish your worth or abilities.
Step #7: Focus on Your Strengths
Identify and leverage your strengths.
Understand what you do well, stand on that, and find ways to incorporate those strengths into your daily tasks and long-term goals.
Know that focusing on your strengths boosts your confidence and reduces the tendency to compare yourself unfavorably to others.
Step #8: Engage in Professional Development
Never stop investing in your professional development.
Take advantage of training opportunities, attend workshops, or pursue additional certifications relevant to your field.
Expanding your knowledge and skills reinforces your expertise, provides tangible evidence of your capabilities, and causes you to stand out (in a good way).
Step #9: Address Financial Literacy
Improving financial literacy directly combats the financial impact of imposter syndrome.
Educate yourself on personal finance topics, such as budgeting, investing, and retirement planning; and know your personal financial numbers (income, expenses, net worth, expense-to-salary ratio, debt-to-income ratio, and dollar amounts needed to reach your goals).
Being informed about your financial options and strategies will not only empower you to make confident decisions, but will help you assert control over your financial future.
Tip #10: Seek Professional Help
If imposter syndrome significantly impacts your mental health and well-being, consider seeking professional help.
A therapist or counselor can provide strategies tailored to your specific needs and help you navigate the emotional aspects of imposter syndrome.
This can be invaluable in overcoming deep-seated beliefs and building a healthier self-perception.
A healthy, happy and whole you is the best gift you can ever give yourself. You are worth it!
A Few Final Thoughts…
Imposter syndrome is more than just an internal struggle; it has tangible effects on various aspects of your life, which can manifest in your overall financial health.
This can result in underestimating your worth, hesitating to negotiate salaries, or feeling unworthy of financial opportunities.
For women, especially women of color, these feelings are compounded by systemic barriers and cultural expectations, making the financial impact even more pronounced.
To combat these negative effects, I shared 10 tips that I use all the time and can confidently say they work. They have helped me not only rebound from career layoffs and financial rebuilding, but have helped me reach career highs and (finally) start my entrepreneurial journey.
That leads me to my final thought: Overcoming imposter syndrome is a journey, not a destination.
It requires…
Embracing your worth and reclaiming your sense of self and empowerment.
Knowing your strengths and giving yourself grace when you fall short.
And persistent effort and ongoing support.
If you take these steps, you’ll transform self-doubt into self-assurance and create a more secure and fulfilling financial life.
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