Inter-generational trauma of poverty

by Dagless Kangero

Have you ever heard of scarcity mentality?


A poor adult was most likely a poor child, raised by poor parents. That is, the cycle of poverty. Poverty itself isn’t passed on from one generation to the next as a package deal, but rather as a group of favourable and unfavourable factors which influence the likeliness for a person to experience poverty at any point in their life.


Poverty is traumatic, but also has traumatic associations. Without getting into the socio-economic detail, let’s focus on inter-generational trauma of poverty of the mind. Due to historic events, CALD communities may be more vulnerable to inter-generational trauma of poverty. Children of CALD societies who grew up less fortunate often struggle with overcoming the poverty mentality even when they are financially comfortable i.e. scarcity mentality. They are conditioned to expect that money will one day be a problem or currently is. This affects their spending habits and lifestyle which ultimately traps them into a poverty mindset, or worse yet, poverty itself. The poverty mindset is a generational inheritance which must be dealt with. Beginning with the mind, CALD societies can and need to move from generational poverty to generational wealth.


The balance must be found between presenting the trauma of poverty in an age-appropriate manner and coping strategies to overcome it. When children are younger, even in trying environments, an abundance mentality must be introduced early. An abundance mentality tells you that there are always opportunities- enough for everyone.

The lesson that something can come from anything and nothing. This saves the “new money” prodigals from making the front-page news for bankruptcy. We all know the story of the lottery winner who lost all their money within the first week. A scarcity mentality is overridden by fear, anxiety and desperation which tells you you only have one shot at making it now. This under-prepares you for the future which is perceived as too far off to begin planning for.


Signs of a poverty mind:


1. Overspending

2. Poor saving habits

3. Living beyond your means

4. Liabilities > Assets

5. Lack of passive income (your money/assets aren’t making you more money)



This is not a crash course on good money management, but this should start you off in the direction of generational wealth mindset. You need to recognise that the relationship you have with money begins in childhood. Whether we like it or not, money is the currency of the world and affects everyone. The goal here is not to idolise and chase money. The goal is to live a comfortable life while setting up future generations with the same, if not more. CALD societies have lower levels of generational wealth because a poverty mindset is set on surviving, rather than building sustainably. So even those who manage to make a lot of money in their lifetime, spend more than they save leaving little in the family name. Genuinely speaking, there’s only so much money a person can make in a lifetime. The idea of building an empire within one generation is a far-fetched reality for most people.


Jewish societies are notorious for building empires and generational wealth. Their philosophy is simple: they save comfortably and invest back into themselves. Learn to distinguish the urgent, necessary, important, unimportant, and unnecessary. Bills are necessary and urgent. A spa day may be important, but not urgent. A new car or new apartment may also be important, but again not urgent. Prioritise your spending according to your needs, not your wants.


Consumerism is a poor man’s game created by a rich man. Observe your patterns and ask yourself if you are making money to enrich your neighbour? A couple years ago a famous and thriving designer refused to sell his brand clothing to people of colour. In his view, he didn’t want people of colour, who he considered poor, to wear his designs. Shortly after, his business took a big hit with lowered sales. That means that these people of colour, mostly African Americans, were investing the most into his business. A business that would generate generational wealth for himself. That is a textbook example of investing into someone else. Everyone enjoys a good fashion piece, but we must recognise that while we focus on how we look, we are building someone else’s generational wealth. Goods do not have as much value as society places in them. Assets do! CALD societies have been conditioned to accumulate goods rather than assets. Renting instead of owning. Buying instead of selling. Spending instead of saving. This is more so true in newer generations who are enticed by the glittering gold of a social media lifestyle.


The relationship of poor adults raised by poor parents is not fixed. That’s a message of hope that I would like to leave you with. Individuals within poorer societies may face greater obstacles. Overcoming the poverty mindset does not discredit real world circumstances such as limited resources and inequality- but the option to do better than your environment is offered to every person. I’d suggest that everyone grabs a couple money management books, websites or other resources and end the cycle of inter-generational poverty. The mind is a wealth deposit. Start now. Don’t be a slave to money.


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