My 2c after working with the US urban poor…
Yes, a lot of impoverished people make poor financial planning choices. It’s kindof this thing many of us in public health/social services don’t like to talk about because it can seem like victim blaming, even though it is painfully obvious. But it is true to a certain extent – I have met people who would rather wear fancy jewelry than save what little money they have to make sure the rent is paid next month.
For those of us who didn’t grow up like this, this behavior seems stupid, irrational, selfish, pathetic. And it is in many ways, but in my experience, it isn’t because these people are lacking character or willpower or intelligence. Poverty breeds impulsive/stupid behavior and sets people up for it way before they actually have any say in how they spend money. Honestly, it was like the people I worked with were constantly being set up by fate/society/circumstances to always be vulnerable to making poor financial choices. A smattering of a few influences I remember:
Cognitive impacts – poor mothers in the US often suffer from unhealthy diets, malnutrition, lack of prenatal care, certain drug addictions, and increased pregnancy and birth complications. All of these things can have serious effects on babies, including cognitive development. Many kids born into poverty are starting out with potential cognitive/analytical processing handicaps on day 1. And since their families lack resources, these issues are rarely appropriately identified and/or treated and managed appropriately to set the child up for success. So kids with impulse control problems and learning disabilities are just left to a struggling school to handle...never getting the time, attention, and resources they need to mitigate the problem. These kids then become adults themselves, having babies and trying to survive.
Role modeling and dysfunctional environment – Wealthier kids are in general, surrounded by good role models when it comes to learning how to think through consequences, plan long term, delay gratification and control impulsivity, etc. They learn from their parents, siblings, extended families, teachers, peers, schools, etc all day every day that they need to be patient, wait their turn, think things through, plan for the future, and be responsible. Sure there might be a black sheep or two who is a dysfunctional wreck, but by and large I’d hazard to guess their environments and social contacts generally foster a sense of responsibility and long term planning. For many poor people, the scenario is exactly reversed. They may have a couple role models who are good at long term planning but their environments just don’t foster that practice nearly as much. Their parents are often products of the same types of environments and may be mediocre at best when it comes to finances or planning, and their schools are poorly resourced and full of disruptions/distractions/problems. You can’t become experienced at something as nuanced as effective prioritization if you are rarely shown it…it works best if you are immersed in it for a long time.
Exposures – poor kids in the US are at heightened risk for certain exposures like lead that also have measurable effects on cognition and behavior.
Respect culture – in many urban poor cultures, respect is a huge deal. Looking like you aren’t poor (or your kids aren’t poor) is often just as socially important if not more important than not actually being poor. Sure you would save money by shopping at goodwill and not putting your kid in a brand hoodie, but then that is a public admission that you can’t clothe your kids the way they deserve. With teens and young adults, respect culture can be so powerful it can turn violent.
Add all of this stuff up and it becomes easier to see why someone would do something as silly as prioritize a TV over a modicum of financial stability. If you are vulnerable to cognitive problems from in utero issues, exacerbated by an unhealthy living environment, and reinforced by a social environment that rarely gives you the opportunity to practice effective prioritization while encouraging showmanship, anyone can easily make questionable decisions. That's why its so awesome when people do manage to get out of these situations on their own....it's a small miracle in many ways.
