Is Your Imposter Syndrome Costing You Money?

We hear about the insidious effects of imposter syndrome all the time. How it holds us back from career progression, negates our self-worth and inhibits us from pursuing what we want to do. But according to research, it's not just our mental health that's impacted, but our wallets, too.

So what is imposter syndrome? “Imposter syndrome is a common mindset whereby we believe ourselves to be less competent than others perceive us to be,” explains clinical psychologist, Dr Jo Gee. The reason it tends to impact our money is that it's so entwined with our careers. “Imposter syndrome can lead people to downplay successes, question their salary and even avoid promotions,” says Gee, adding that “it often results in symptoms of burnout from overworking, feelings of inadequacy and self-critique, a lack of satisfaction at work and a fear of asking for help.”

Alina Jaffer, financial expert at Virgin Money, explains the six key ways in which imposter syndrome works to keep us from meeting our financial potential. From the costs associated with FOMO to the FOAM (Fear Of Asking for More), we could be letting thousands slip by. Ahead, Jaffer and Dr Gee share the ways that imposter syndrome can hold us back financially, and their tips for combatting them.

“Asking for a pay rise is a tricky conversation that many don’t feel comfortable with and imposter syndrome can make this feel even more difficult,” says Jaffer. Sometimes it feels like we're lucky to just have the job, so when faced with a conversation as tense as money and raises, the pressure to make your case can make you want to hide in the storage cupboard.

But remember, you have every right to approach the subject. If your managers make you feel audacious for asking to be paid for good work, that's their corporate Stockholm Syndrome, not yours. All you can do is be prepared with clear reasons for your desire for a raise or promotion, and, as Jaffer advises, “try not to any feelings of inadequacy hold you back from having those difficult conversations that need to be had.”

“Imposter syndrome can cause us to overcompensate in social settings, making us feel the need to prove ourselves or justify our friendships,” says Jaffer. Therefore, imposter syndrome sufferers may experience FOMO more regularly, spurring them to spend money unnecessarily for the sake of simulating a good time. What then happens is that we find ourselves without much left over to add to our savings.

Research even reveals that more than a third of people feel jealous when their friends go out without them and, on average, will spend around $628 a year on events they did not want to attend. That's a lot of money to be shelling out when we really just want to be at home.

According to Dr Gee, it's all about getting pragmatic with your planning.“If you experience FOMO, we suggest saying ‘yes’ to a limited number of social events that you want to attend,” she suggests.

“Using Likert scales where we rate our enthusiasm for a social event (from 1 ‘I don’t want to go’; to 10 ‘I really want to go’), can help to banish FOMO and guide us to what we really want to engage with.”

Women on average are spending around $1,800 to $4,800 each year on new clothing, about 27kg in weight, while throwing 23kg worth of clothing and textiles into landfills each year — and only wearing approximately 60% of these new clothes. This means you could be spending hundreds on outfits that you think will help you look the part, when in reality they’re going to waste.

Unfortunately, imposter syndrome makes it impossible for us to internalise our successes and, as a result, we can overly focus on our external facade to help us feel more confident. But as Gee notes, studies have shown that those with imposter syndrome who compensate through fashion report greater feelings of inauthenticity and lower scores in confidence. “Try ditching the catwalk for a mindfulness app... this practice has been shown to create long-lasting brain changes, which are even visible on MRI scans!”

Are you a perfectionist at work? “Imposter syndrome can result in individuals striving to meet impossible standards,” says Jaffer. And while we've been led to believe that putting in extra hours will get us noticed for the right reasons, and might even feel essential to getting a promotion.

But what we're ultimately doing is setting an unhealthy precedent for work boundaries, and pushing ourselves to limits that could see us burn out before we even get to where want to go, as noted by Jaffer. “This immense pressure can lead to burnout and consequently, you might end up stagnating your career progression further and potentially missing out on that pay rise.”

“If you experience imposter syndrome, we suggest a two-pronged approach where you aim for 75% productivity, while seeking feedback and reassurance from colleagues regarding your work,” adds Gee. “This provides direct feedback which you can use to challenge your need to revert to your high standards.”

With imposter syndrome comes the belief that we're not mentally equipped to handle big things, and, in some cases, we tend to bury our heads in the sand, preferring instead to avoid the stress of overwhelming life admin. But in news that will shock no one, your money isn't just taking care of itself.

So if you're not on top of your funds, not only are you going to miss out on financial opportunities, but you're also going to fall into the trap of having to rely on banks and other institutions for everything, instead of knowing what's happening with your money yourself. “While it’s difficult to quantify just how much money you could be losing out on,” explains Jaffer, “avoiding financial advice will ultimately have a negative impact on your finances.”

Gee recommends asking for help, not even necessarily from professionals, but from those who know how to tell it straight. “As people with imposter syndrome fear being caught out as 'imposters', they rarely ask for help,” she explains. “If you suffer from imposter syndrome, set yourself a challenge to ask someone for help each month and make sure one month’s request for support revolves around your finances.”

More and more people have been galvanised to become their own bosses during the pandemic. But the thing about imposter syndrome is that it can make taking this kind of plunge feel impossible and out of reach. And when we're second-guessing ourselves, we tend to half-ass our plans or give up on them altogether, leaving it to the people who can do it. But that kind of defeatist attitude doesn't get us far, especially when we know we're working with great ideas and are just struggling to get started with them.

“Imposter syndrome can hold people back from starting up their own businesses as the feelings of inadequacy can trigger our freeze mechanism, leading to procrastination and downplaying of abilities,” explains Dr Gee, who suggests that establishing a solid network is the key to getting over our hangups.

“Good mentors are worth their weight in gold when thinking of starting up a new business, as their ability to guide can be enough to motivate you past your self-doubt and to a plan for success.”