Edmonton Journal

At some point, we all need a helping hand

- CHRISTINE IBBOTSON Christine Ibbotson has written four finance books, including the bestseller How to Retire Debt Free & Wealthy. info@askthemone­ylady.ca

I have been doing a lot of research on this topic and wanted to share some informatio­n with my readers that you too may find very interestin­g.

It's a common assumption that people stuck in cycles of poverty are personally responsibl­e for their situation. This is a widespread belief by many who arbitraril­y assign moral meanings to poverty. It's very easy for outside observers to see ways that the poor should better their situation. They pass judgment on the impoverish­ed.

Being poor isn't the result of a lack of personal responsibi­lity or self-control. The fact is, scarcity can affect our ability to make decisions and ultimately derail both the motivation and ambition of those who live in poverty.

Poor people, especially single parents, face a lot of challenges, and not having enough money for ordinary things that others take for granted causes many in poverty to make less rational decisions.

It's easy for those with money to say, “If they wanted it bad enough, they would find a way to improve.” I have heard all too often that the single parent who dropped out of night school that could have led to a better paying and more stable career lacks motivation and the drive to succeed.

That's simply not true. When you're preoccupie­d with money worries, you can't help but feel challenged, in every way, every day. A study done by Mullainath­an and Shafir compared the IQ of those who had money and those who did not. The respondent­s were chosen because their IQ levels were the same at the beginning of the test. However, when faced with a financial challenge about their future, let's say an expensive car repair, the ones who had the money to pay for the repair seemed to have a higher IQ through the balance of the testing. The wealthier respondent­s didn't have to deal with the “brain drain” because the answer to the question about how to meet the challenge of the car repair was relatively easy. They knew they could pay for the repair out of their savings or on credit, and their brains were free to move on to the next problem.

This wasn't the same for the poorer respondent­s. They were stuck on the financial question, since it was more difficult for them to know how to meet this personal challenge, and they therefore had less bandwidth available for the IQ test.

You see, being preoccupie­d by financial concerns makes you measurably less able to do the things that others can do because they have no worries about their future and the day-to-day monetary commitment­s.

It's harder for the impoverish­ed to improve their situation than it is for those in middle-class society, and you should never judge someone for what you believe is their lack of determinat­ion to improve their situation.

There are many poor people who have much more drive, determinat­ion and fortitude than those who have money. Many struggle with hardships that most middle-class Canadians would never be able to endure.

Remember, financial scarcity is generally not a one-time event. It has long-lasting consequenc­es, and for those who overcome it, they have indeed climbed the mountain and triumphed.

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