Dear Money Lady Readers,
I wanted to share this column with you and perhaps reach some of you who send me emails judging others who have less. We must remember that charity comes in many forms – monetary of course, but also by being helpful, understanding, loving and generous.
– The Money Lady

It is a common assumption that those 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 is very easy for outside observers to see ways that the poor should better their situation. They pass judgement on those impoverished, when they seem to lack the control and motivation to spend on unnecessary expenditures.
This is not 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, have 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 is 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 seems to lack motivation and the drive to succeed. That is simply not true. When you are preoccupied with money worries you cannot 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 that 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 that had the money to pay for the repair seemed to have a higher IQ with the balance of the testing. The wealthier respondents did not 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 was not 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 is harder for those impoverished to improve their situation than it is for those in middle-class society and we should never judge someone for what you believe is their lack of determination to improve their situation. There are many poor that have much more drive, determination and fortitude than those that have money. Many struggles 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 that overcome it, they have indeed climbed the mountain and triumphed.
Good Luck & Best Wishes,
Christine Ibbotson.

Written by Christine Ibbotson, Author of 3 finance books and the Canadian Best-Selling Book “How to Retire Debt Free & Wealthy” www.askthemoneylady.ca or send a question to info@askthemoneylady.ca