How poverty drives people to make bad decisions

SINGAPORE: Every time his four children walked past the food store on the ground floor, they asked him to buy them drinks packages. Each time Mary Yeo replied, "No, not today."

The first time the divorcee received financial assistance from the social services office, her first thought while she was home alone and wondering what to do with this money was her nostalgic request from the day before.

"I rushed to the grocery store and bought a lot of drinks," said the 47-year-old. "The next day I bought (more)."

After three days, she had bought for a value of 400 Singapore dollars – 40 cartons – "because the same thing did not stop coming to me" in the spirit.

"I was not thinking of anything else," said Mdm Yeo, who had about one-third of the $ 650 left. "It was pretty scary … (I was) pretty stressed."

She did not know it at the time, but she felt one of the common effects of poverty: a kind of tunnel vision that centered her mind on one aspect.

After being mowed and seeing her children deprived of packets to take away, her mind began to be obsessed with what was missing from her family.

As the experts in the Why It Matters program say, poverty is complex and is not just about not having enough money to buy the things you need, such as food, clothing and shelter. (Look at it tomorrow, November 26 at 8 pm)

The problem of limited resources has consequences that make long-term decision-making difficult, because of the financial constraints involved. Poverty has even biological effects.

There are programs in Singapore designed to help people in need to get up, but the odds are against them more than people imagine – and that may require a redesign of the policy.

WATCH: Why the poor are trapped in bad decisions (5:02)

PERSPECTIVE OF PLUNDERS OF POVERTY

Ask Singaporeans why the poor are poor and the most likely answers are poor health, laziness and lack of higher education – at least that's what a Channel NewsAsia survey found in July on 1 000 respondents.

This attitude stems from a spirit of self-sufficiency: in Singapore, people make their own fortune or their own money.

But when people have financial problems, there is more to consider. Due to the so-called scarcity mentality, attention is absorbed by immediate problems and the best long-term interests are rarely taken into account.

And the more problems we have, the lower the bandwidth, according to Geraldine Tan, director and principal psychologist at The Therapy Room. This means not developing a strategy or analyzing tasks correctly, which is more likely to result in lower choices.

"When you're stressed (a lot more negative emotions, which are very heavy), it can affect your cognitive functioning," she explained.

"If you are constantly disturbed by having to think about the next meal on the table, the problem gets worse and perpetuates itself. It's very difficult to get by, and it affects their work. "

Dealing with commonplace problems that are impossible to solve can make a person anxious and frustrated, even depressed.

Many people in stressful situations can use their mobile phones or watch Netflix, but when the poor are distracted from what they have to do, they are perceived as backsliding or lazy, Tan said.

It sounds like an attitude problem, but it's not a problem of attitude, because it's all happening (which we can not see visibly).

What impact can there be so little? Research conducted by Princeton University has shown that immersion in cognitive function in a person preoccupied with money problems is similar to a 13-point drop in IQ.

He cuts the choices

Being poor can also be expensive, which is a reality that Mdm Noridah Abdul Rahman faces as she raises five children in a rental apartment with a single income of less than S $ 1,500 a month.

She receives $ 420 from the Community Care Endowment Fund (ComCare). So, when she does her shopping, she makes sure not to exceed her weekly budget of about 100 Singaporean dollars for groceries.

In her case, it may not be a question of whether she makes the most of the financial assistance, but if she can.

For example, she usually buys a package of diapers to keep in the budget for the week, although she can save about $ 3 per package by paying S $ 45.95 for two instead of S $ 26.25 for a package. .

She is also losing grocery shopping offers, said Ms. Valerie Kor, editor-in-chief of MoneySmart, one of Singapore's largest financial portals.

There is, for example, the Bank of China's Sheng Siong card (BOC), which offers cardholders a 7% cash back on in-store expenses, while the Everyday POSB card offers a 5% cash back without minimal expenditure.

But as these are credit cards, the annual eligible income is S $ 30,000. If Mdm Noridah had the BOC Sheng Siong card, she could save about S $ 35, assuming a monthly expenditure of S $ 500. That would cover a week's rent.

Wholesale purchases, shopping discounts and cash back are one example. The fact of having to pay penalties because of a backlog of bill payments, as for utilities, is another reality of the lives of the poor.

Deficits are accumulating and overflowing in the next month. The cycle continues, as does the list of daily situations where a shortage of liquidity can create a shortage of choice.

For example, the producers of Why It Matters asked two groups – those who earned more than 2,000 Singapore dollars and those who earned less – what they would do if their refrigerator failed.

Those in the first group said they would decide by one day to buy a new refrigerator, with a budget of about $ 1,000 Singapore, or simply "the best type of refrigerator for the best kind of money" .

Those in the other income group said that they should first wait for the pay day, try to repair the refrigerator or, failing that, get the cheapest refrigerator or fridge from the refrigerator. 39; occasion.

When this group was asked what it would do for a sprained ankle, a person said that he would "use a cane or something like support", while one would another used a "home remedy" because consulting a doctor is "very expensive".

IT TAKES YEARS OF LIFE

Through the cycles of time, the effects of poverty can also be physiological. Researchers at the National University of Singapore, for example, have discovered that this phenomenon is related to aging.

Professor Richard Ebstein of the NUS Department of Psychology, based on a study of 1,158 undergraduate students, noted that the DNA of lower socioeconomic students had shorter "telomeres" than those whose families had more money.

A telomere is a physical end of a chromosome, much like plastic tubes at the end of a lace that prevent it from crumbling.

"The telomere has essentially the same function: to somehow protect the end of the chromosome and prevent damage," said Professor Ebstein, explaining that the length of the telomere is an index of aging.

"These students – and they are healthy – are aging faster than other students."

The consequences of poverty are therefore long-term and may not manifest themselves before adulthood.

"Even at age 22, if you come from a poor background and you've been accepted to NUS, you're still a little more stressed and exhausted, even if you succeed in school," he said. -he declares. added.

Poverty is not just about not having enough money. This has consequences on your physical and mental health.

WHAT IT NEEDS FOR: SECOND CHANCES

Financial assistance can improve the conditions of the poor and in Singapore it exists in a variety of forms, including public rental housing at subsidized rates, utility subsidies, additional subsidies for accession to property, grants for the care of children and students and the community health assistance program.

From April through March, about 79,500 Singaporeans received ComCare assistance for low-income households.

Sulfikar Amir, professor of sociology, believes that the margin of error of marginalized people tends to be reduced, it is only with a resilient social structure that the consequences of their mistakes do not occur. will not worsen their economic prospects.

The Associate Professor at Nanyang Technological University suggests that social policies are designed in the same way that cockpits are designed with backups for engines and other essential safety equipment.

"We have to create a totally resilient system. We should have this multi-level defense mechanism in which, in a situation of failure (of a policy), there is a relief solution to help those affected by this policy, "he explained.

He cited a single mother who needed to improve her skills but had to take care of her two children: she would need more time to finish her lessons.

Public policies should be personalized or tolerant of such situations, he said, in order to give the poor a second chance.

The clash between skills development and family case management is an example also cited by Mr. Aaron Yeoh, founder of the social enterprise Etch Empathy, which runs poverty simulation exercises for schools and businesses.

He acknowledged that the social system must redress the situation of the poor, which would otherwise see every slippage turn into a series of setbacks.

"It's a long journey, so sometimes, when support is not available and the trip is too difficult for them, they're likely to come midway," he said.

"The company could recognize that an unforeseen situation could occur. So, if they have more flexibility for them, it might help. "

This episode of Why it Matters will air tomorrow, Nov. 26, at 20 hours. Or watch it here.