How generational poverty affects the management of money

There are common characteristics of individuals who come from a culture of generational poverty, and those characteristics can affect the management of their money.

Ruby Payne, Ph.D has been an educator since 1972, serving as a high school teacher, elementary principal and school district administrator. In 1994, Dr. Payne founded Aha! Process, Inc. with the goal of sharing her insights about the culture of generational poverty and how both educators and other professionals could work most effectively with both children and adults from such a culture.

In 1995, Payne published the book, A Framework for Understanding Poverty. It contains many references to various characteristics of individuals who come from a culture of generational poverty and how those characteristics can affect the management of their money.

As a money management educator who works with a significant number of people who come from a culture of generational poverty, and as an advisor to other professionals who work with such individuals, I asked and received permission from Dr. Payne to make and distribute a list entitled, “Some Characteristics of Generational Poverty that Affect Money Management.” I offer the list here in the hope that it will increase the effectiveness of those who work with such individuals around the issue of personal finance.

  1. Survival Orientation: Discussion of academic topics is generally not prized. There is little room for the abstract. Discussions center on people and relationships. A job is about making enough to survive. A job is not a career.
  2. Belief in Fate: Destiny and fate are the major tenets of their belief system. Choice is seldom considered.           
  3. Polarized Thinking: Options are hardly ever examined. Everything is polarized. It’s one way or the other. Comments like, “I quit” and “I can’t do it” are common. If options aren’t seen, there’s no reason to prioritize.
  4. Live in the Present-Don’t Consider Future Ramifications: Being proactive, setting goals and planning ahead do not occur. Most of what occurs is reactive and in the moment. Future implications of present options are seldom considered. Money is for spending (the present) and not for managing or saving (the future).
  5. Lack of Order/Organization: Devices or organization often don’t exist (i.e. planner, files etc.)
  6. Entertainment is Valued: When one can merely survive, respite from survival is important and entertainment brings respite.
  7. Money is Seen as an Expression of Personality: Money is used for entertainment and relationships. Using money for security is grounded in middle- and upper-class values.
  8. Unpredictable Environment/Impulsive: When one has not developed the ability to plan, one has trouble predicting. When you can’t predict, you can’t identify cause and effect. When you can’t identify cause and effect, you have difficulty identifying the consequences of your actions. When you can’t identify the consequences of your actions, it leads to impulsive behavior.
  9. Sense of Entitlement: There is often an attitude that society owes one a living.
  10. Limited Resources: Not just financial but emotional, mental, spiritual, physical, relational, and supportive resources may be absent.
  11. Ownership of People: People become possessions. There is a great deal of fear around and comment about leaving the culture and “getting above your raisings.”
  12. Importance of Relationships: When one only has people to rely on, relationships become important for survival.
  13. Informal/Casual Language Pattern: Often unable to use formal register. Can make successfully interviewing for jobs difficult.

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