Story written by Madeline Jarrard.
COLUMBIA — The stress of poverty — worrying about housing, wondering about the likelihood of a next meal, tabulating a meager income against mounting expenses — isn’t hard to imagine. Over time, though, that anxiety can cause subtle changes in the brain.
Poverty is linked to a reduced attention span and limited ability to multi-task, which add to the numerous obstacles faced by those who struggle financially, according to a 2013 study published in in the academic journal Science. Poverty, the researchers wrote, “captures attention, triggers intrusive thoughts, and reduces cognitive resources.”
The study indicated that the implications of poverty are more substantial than a lack of money − they relate to the functionality of one’s brain. The researchers found a correlation between the stress of poverty and poor decision-making. Cognitive capacity is the amount of information one can retain, and those living in poverty suffer from a “tunneling effect.”
Teri Roberts is the Asset Development coordinator for Central Missouri Community Action. At the center, she teaches a variety of finance education classes, including budgeting.
“Our clients are low income, so they struggle to meet basic needs,” Roberts said.
Roberts teaches students to manage the money they have and to live on a budget. There are many people who don’t know basic financial information, she explained.
But Roberts does more than teach finances. She explained that the general mindset of people who enter the class is they “can’t even pay the bills, much less save money.”
But this mindset is tangible for all people.
According to the study, financial concerns have a cognitive impact comparable with losing a full night of sleep. Researchers cited that the effect of poverty is similar to a drop in cognitive ability by 13 IQ points.
The goal is to avoid the “poor decision making” that poverty threatens.
Roberts finds simple ways to encourage better spending habits. “We all have money we fritter away,” she said. She calls it “fritter finder,” where people find things in their lives that are not necessities. She gives the examples of lottery tickets and other expenses that add up.
The change that Roberts makes is tangible. There were pre and post assessments taken of individuals who took the budgeting class. Of the 20 to 25 people analyzed, the difference before and after the class was substantial. Roberts cited an 89 percent increase in knowledge demonstrated by the tests.
Mary Taylor, 36, participated in the budgeting class when she was unemployed and low on money.
“I wasn’t doing near as good as I thought I was,” Taylor said.
Taylor, who had Roberts as a teacher, explained how helpful it was having a budget plan.
“I definitely felt more confident,” she said.
Now, Taylor works for Central Missouri Community Action at the office in Boone County.
Angela Hirsch, the Community Services Director, explained more about the goals of the classes.
The budgeting classes at Central Missouri Community Action help teach people to best utilize the money they do have. Instructors help their students create a path to their goals: buy a house, go to college, or simply live within their means.
But for some, the goals come in small steps.
The penny roundup is another way the instructors teach how to save money. Individuals are taught to save the coin change from all of their purchases. For example from a $9.50 purchase one could pay with $10 and save the 50 cents.
“That starts to add up,” Hirsch said.