Hey, guys.
It's Chelsea from The Financial Diet.
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And today, I wanted to talk about a subject that
is very close to my heart, and really a lot of the reason
why I started TFD in the first place.
For those who might not be aware, when I was growing up,
my family was very, very low income.
Especially until the age of about 11 or so,
our family was definitely below the poverty line,
living paycheck to paycheck.
Money was a huge source of stress and anxiety,
and overall feelings of kind of insecurity and deprivation
in my life as a child.
And of course, I can't imagine how difficult it
was for my parents at that time, and they did everything
in their power to keep me a little bit shielded from it,
but it definitely had a huge impact.
And then as I moved into my pre-teen years,
I moved to a very, very affluent area
where my family, at that time, was more middle class.
But when you're middle class compared
to a bunch of really rich people who
drive BMW's to your high school and get them as 16th birthday
gifts, you actually weirdly feel more
poor than you did when you were actually poor
but surrounded by other poor people.
And these two experiences really shaped my relationship
to money, my insecurities around it, my anxieties around it,
and were really what led me to get myself into so much
financial trouble so young, because I really associated
spending-- and often spending in a reckless or unsustainable
way--
with validation, with self-worth, or even
really the only way a person can truly have fun.
That's how I quickly got into my credit card
debt, drained my savings, was using check
cashing services because I was over drafted everywhere.
Basically, every bad thing that I was doing with money really
at some level, I now understand stemmed
from my serious insecurities around the subject,
and overall fear of money as a concept.
That being said, today at 32 and over seven years
into talking about money as my full-time job,
I feel very confident and stable with money.
As you guys have seen from my videos,
there's pretty much nothing that I won't share financially.
I have really no anxieties or qualms around the subject.
I really don't associate my self-worth with things
that I can afford to buy.
I really choose and try to find my self-worth and validation
in other things, like things I can make,
the way I make other people feel,
and other generally more healthy things.
But I also know as someone who's been
to my own share of therapy, and who generally
tries to be pretty conscious about my own psyche
at play, that you never fully escape
the notions and emotions around money that you grow up with.
And many of us out there who may now be financially stable,
who may have ascended in class, who
may have a completely different numerical relationship
with money, can often be held back
by a lot of those same unhealthy emotional relationships
with money, often because we grew up without enough of it.
So I wanted to talk today about the habits and the mindsets
and the behaviors that a lot of us
find ourselves locked in because we grew up poor,
even if we're not anymore.
And honestly, even if we still are.
Even if we're still struggling financially,
that's not a reason to not address some
of these bad mental habits.
Because research from Cornell University
shows that the overall stress of growing up poor
can seriously impede one's mental health as an adult,
even if they grow up to eventually
be middle class, or maybe even higher.
The stress can even take its toll
on your physiological health, from witnessing your parents
worrying about money in front of you
to feeling alienated from common social experiences,
like trips or birthday parties.
Growing up poor can sometimes feel
like a million little traumas that never really leave you.
And it's made all that much worse
by feeling like you should be filled with nothing
but gratitude for your current situation,
and like you should simply move on from the things that
were upsetting in your youth.
So regardless of your current financial situation,
if you grew up poor, here are some
of the things you might still be carrying
with you without realizing it.
Number one is problematic relationships with food.
Food insecurity can result in people eating more, eating
faster, and eating when they're not hungry
because they don't know when their next meal will be
or how much food they'll have.
This was demonstrated in a 2016 study
by Texas Christian University, which
found that women who grew up poorer, when offered snacks,
consume them at equal rates regardless of how long it
had been since they last ate.
Women who grew up more financially comfortable
only ate high amounts of it if it
had been long enough since they last ate.
Similarly, women who grew up with far less
tended to eat just as much if they
had a caloric beverage, such as a soda,
as if they drank a zero calorie beverage like water,
whereas those from higher income households
would hold off from eating as many snacks
if they drank a caloric beverage.
Essentially, growing up poor or experiencing food insecurity
will mean having a difficult time
assessing what your body really needs
or accepting that you have enough of it.
And this actually runs parallel to behavior observed
in foster children and adoptees, who often engage in overeating,
hoarding, or even hiding food due to food insecurity that
is essentially hardwired in their brains.
And what those observations found
is that for people who have poor impulse control around food
is that restricting food does not work.
And labeling foods as bad only increases their allure.
So if you're a person who grew up food insecure
and then enters the complicated adult world of dieting
and health trends, that can also result
in bingeing or other disordered food rituals.
And while it is very common to experience overeating based
on your needs if you grow up with food insecurity,
you can also experience the opposite effect,
which is overrationing your food because you're
so used to having to keep it tightly controlled.
And what makes that more problematic
is that rationing mindsets aren't exactly frowned upon.
In the early days of the COVID pandemic,
respected publications were giving tips
on how to ration food in case, we
could never enter a grocery store again.
Sorry, but I feel like if we can never go to a grocery store
again, we got bigger problems than whether
or not you ate your Chex Mix really slowly.
And what's perhaps more troubling
is that overrationing food, as it does
tend to be associated with people
in lower socioeconomic status, results in a situation where
people who are of lower socioeconomic status
tend to be underdiagnosed in restrictive eating disorders
even compared to the general population where it is overall
underdiagnosed.
One 2017 study found that people identified
as being from an affluent background are around 48%
more likely to receive an eating disorder diagnosis,
52% more likely to be perceived as needing treatment,
and 89% more likely to have actually received
treatment in the past year.
Number two is poor impulse control with money,
like your girl.
While growing up poor for some might
result in being incredibly over frugal and even stingy
with your money, even when you don't need to be,
for many people, it actually results in the opposite.
In 2014, the American Psychological Association
published research that found that people who grew up
in poorer socioeconomic situations
had a lower sense of control and higher
instances of impulsivity.
For example, people from poorer backgrounds
were more likely to say that they would prefer
to receive a smaller amount of money
tomorrow than a larger amount several days later.
And while it's understandable to see where these impulses might
come from, when in many cases you are not ever sure when
you'll see that money again, so you may as well enjoy it
now or get what you need while you have it,
this particular financial habit is
very destructive to long-term savings.
In a 2015 essay in Marie Claire author
Samantha Leal described growing up poor, not even
being particularly aware that she was poor,
and receiving $800 from her grandfather, who passed away
when she was 22.
Despite other pressing things to spend it on,
like student loan payments or investments,
Leal spent it on things like dinner out
and a cross-country trip.
And this makes total sense when you
think about how much more of a dopamine
hit you get from spending money on things that bring you
immediate enjoyment and fulfillment,
versus saving it for some far-off goal which, if you've
grown up poor, you've sort of been conditioned to believe
you'll never have anyway.
Because as one 2013 study from Princeton University
shows us, growing up poor severely impedes your ability
to make plans based on the long-term picture,
and that the stress derived from growing up in these situations
can often impair one's immediate decision-making skills.
But somewhat on the flip side, number three
is working too hard to justify bigger purchases.
And this actually does go hand-in-hand
with compulsive spending, but there
are added psychological and even gendered components.
In the fantastic classic Simpsons episode,
"Scenes from the Class Struggle in Springfield",
an all-time great.
The plot is kicked off when Marge
comes across a markdown Chanel dress, $90 down from $2,800.
But even at a bargain, $90 is a splurge for the Simpson family,
and Marge is reluctant to buy it.
She tells Lisa, now if it were a suit we could all wear,
it would be different.
Now this scene is of course played for laughs,
but like a lot of the early Simpsons,
it is very much based on real class dynamics
and lived experiences of the average American family,
wherein often the matriarch will feel very uncomfortable making
spending decisions that are just for her benefit
because it automatically feels to her as selfish.
And this habit not only coincides somewhat
with people who grew up poor, but is also
quite possibly very gendered.
A 2009 study by Skinny Cow found that 86% of women
try to justify every purchase they make,
and 83% feel shameful after spending
on items such as shoes, clothes, or accessories.
And while the broader feeling often
comes from a place of not wanting
to be judged for these purchases,
even if, for example, you need them to be presentable at work,
if you're coming from a poor background in which you're
essentially judged for every financial decision
you make, and made to feel as if you living in poverty
is uniquely the result of your own bad decision-making,
the need to justify, explain, or if not, forgo basically
every purchase becomes overwhelming.
Now of course, budgeting is important at any income level,
and we shouldn't feel that every large purchase should
be made completely without abandon
just because we want to air too far in the other direction.
But if we're able to be compulsive about the smaller
purchases, which is often the case
of those who grew up in poverty, but feel an extraordinarily
high bar to clear--
even irrational compared to your overall finances
when the purchase is larger--
that may mean we're budgeting in an unhealthy way.
A good way to offset this is to make sure
that there are places in your budget specifically dedicated
to these larger purchases, so that you
know you're making them not just in a smart way,
but in a sustainable and planned-for way.
Number four is avoiding social gatherings.
Now listen, nobody hates introvert discourse more
than me.
I can't listen anymore to you guys being an oppressed class.
As an extrovert, my main hobbies include
doing cocaine, going to masquerade orgies,
and murdering people.
I just don't have time to listen to how great
it is to cancel on plans at the last minute
so you can stay at home and watch Netflix again.
Leave me out of this discourse.
But where society needs even more empathy, in my opinion,
is with people who feel that they
have to eschew social lives because they grew up
in a situation where it was too precarious to really have one.
There are many people who would like
to be able to socialize more than they do but feel that they
can't because A, they're too traumatized
from a past of not being able to safely, or B, feel
that it will universally lead them
into having to make unsustainable financial
decisions in order to keep their friend groups pleased.
And there are low income extroverts out there.
And a study from the Association for Psychological Science
found that they tend to spend more money on status
than their introverted peers.
High status spending items included foreign air travel,
art institutions and electronics.
And add in that it's commonly accepted
that millennials can easily spend
over $100 a month on alcohol alone,
and it's easy to see why being extroverted
is associated with spending a lot of money.
And if you also happen to grow up
with particularly avoidant personality traits or habits,
it can be doubly difficult to say no in social situations
where it feels like spending money is the only way
to be accepted.
Looking back on how I got myself into such extreme financial
trouble, it was exactly that.
I was an extrovert who wanted to be accepted,
wanted to have a healthy social life,
and felt that the only way I could do it
was by putting money on my credit card
in order to keep up.
In order for me to get to a more healthy place with my finances,
I literally moved halfway across the world,
because I knew that if I kept in the same social dynamics
that I would never be able to fundamentally change
how I related to my money.
It certainly wasn't the only reason,
but it was a big contributing factor,
and the six or so months when I first moved out of the country
and I had an extremely limited social group
allowed me to get a slightly better footing because I wasn't
constantly being pressured to do things I couldn't afford to do.
Lastly, number five is being OK with significant discomfort.
Now whether that means driving your car well
past its need for repairs, keeping monthly contacts
in for three months, wearing threadbare clothes that
need to be fixed, or generally doing anything else
where you could afford the better-- and in many cases
safer-- alternative, but feel bad spending
the money to do it.
This is an extremely common trait
with people who grew up without enough.
One of my favorite anecdotes from my period
when I was trying to fit in and still dealing
with all kinds of money insecurities is when I stole--
I think it was my parents' credit card,
I can't quite remember-- but I stole my parents' credit
card, I think, to buy a pair of Uggs,
because in 2007, that's anything a girl could ever dream of.
I bought them, the second or third night promptly
went to a bonfire where it had my feet a little too
close to the fire, and completely melted
the bottom of one of my two Uggs so that they were like--
I could feel the ground through them, basically.
But I couldn't afford to replace them,
so I basically wore melted Uggs for at least a year after that.
It was a dark time for Chelsea, let's put it that way.
And I wouldn't do that again, but I
have noticed even in myself some tendencies to wear things
past a place where they need to be repaired,
or eschew buying very basic, affordable things that
could improve my quality of life,
because I grew up with it being so normalized to experience
that discomfort, or to use broken things,
or to not really have enough to replace it.
And don't get me wrong, culturally, on aggregate,
we live in a world that is way too focused
on replacing things that don't need to be replaced,
buying more than we need, having a different outfit
for every photo, and many other wasteful habits.
But going way too far in the other direction
isn't healthy either.
In fact, for example, temperature comfort
is one of the most interesting class divides.
In 2019, NPR analyzed 97 of the most populous cities in the US,
and found that in 75% of cases, ground temperature
in the summer was hotter in poorer neighborhoods.
Low income people are affected disproportionately
by extreme weather, and despite the adverse effects
that heat and cold waves can have on people's health,
it's hard to convince people who are
used to rationing to turn up the A/C.
In a 2017 study by The Conversation,
88% of respondents said they personally knew people
in households with either very young, very old, or otherwise
medically vulnerable people who still avoided turning up
the air conditioning during heat waves because of costs.
1/3 of respondents even knew of households
that avoid turning on electric fans to reduce their bills.
As someone who grew up in a household where
it was perpetually like 60 degrees during the winter,
and I had to sleep with pajamas, a fuzzy robe, and fuzzy
socks on, and the most dreaded part of my day
was having to take a shower because of how cold it
was going to be before and after,
I now am like a lizard in winter.
My shit is like 100 degrees at all times,
and my husband is like, I can't live like this.
And I'm like, but you don't understand how it was.
And while you may view temperature control
as somewhat superfluous, things like medical coverage are not.
And yet that is often something that people
choose to go without even if they could technically
afford it.
And as someone who for a long time
didn't have health insurance, I know just how
that mentality can work.
When going to the hospital is viewed as a luxury,
there are a lot of things in your younger years
to get used to simply waiting out at home,
like bad colds or flus or even physical injuries,
whereas others might run to the ER
more rapidly because they know it won't bankrupt them.
According to a 2020 study by Bankrate, 22% of Americans
put off or altogether avoid going to the doctor
to avoid the cost, with millennials outpacing
boomers in this trend.
And these trends can also impact others' perception.
A study in the Journal of Experimental Psychology
found that poorer people are perceived by others
as having higher pain tolerance, even if they don't necessarily
have higher pain tolerance, which may be reinforced
by the fact that lower income folks on average
tend to eschew seeking medical treatment for things
higher income folks would.
It's like it's not because it didn't
hurt when they cut their hand, they just
can't afford stitches right now.
If any of these things sounded familiar to you,
it's important to remember that A,
it's not your fault for having some of these ingrained habits
and beliefs, and B, just because you
have them now doesn't mean you're
condemned to have them forever.
But it is extremely important to confront and unpack our habits
and emotions around money the way
we would any other element of our mental health.
We focus so much on things like our relationships,
our friendships, our careers, and analyze
every little bit of detail of what happens,
let's say, on social media.
And yet tend to treat money and the relationships
we have to everything it represents
as either secondary or totally taboo to even address.
But if you grew up lower income, even
if you are now more financially comfortable,
it is likely that some of that is still lingering with you,
and possibly keeping you from living
the full, fruitful, and unencumbered financial life
that you deserve to live.
As always, guys, thank you for watching,
and don't forget to hit the Subscribe button
and to come back every Monday, Tuesday and Thursday
for new and awesome videos.
Goodbye.