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Generational Poverty: How to Break the Cycle of Poverty

Updated on October 22nd, 2022
Stop Generational Poverty

Are you familiar with escape rooms? The only way you can escape is to solve a complicated problem. But what happens if you fail to escape the room on time? Having lost, you are then “imprisoned” in the room. OK, not literally. However, you will not be able to leave the room until a staff member enters the room and shows you the clues you missed, walks you through the solution, and escorts you safely outside.

What if the moderator never arrived and you were stuck waiting for your kids to figure the puzzle out? During your wait, all you have is what you brought into the room.

As a result of generational poverty, it is as if you are locked in a room full of puzzles. In addition, you only have a limited time to escape before you are permanently imprisoned.

As another way of putting it, generational poverty is the opposite of generational wealth. Instead of learning about finance and gaining a leg up in life, kids grow up living hand to mouth. In the United States, millions of people are affected by it.

But is it possible to break the cycle of generational poverty? Well, let’s find out.

Table of Contents

What is Poverty?

First, we must understand poverty overall in order to understand generational poverty.

Poverty is a state of economic hardship. More specifically, it is a situation where people lack certain commodities that they need for their lives, such as money and material goods. As a result, poverty encompasses social, economic, and political aspects.

Poverty is derived from the French word “poverté.” If you’re case, this translates to poor.

Poverty is a complex concept. The reason? This is due to the many factors that influence it, such as geography, inequality, lack of education, or economic conditions.

Listed below are some quick facts about poverty provided by Poverty USA:

  • The poverty threshold for an individual is approximately $13000 per year, and for a family of four, it is roughly $26000 per year.
  • The poverty rate in America is 11.4%, which corresponds to some 37 million people living in poverty.
  • Poverty affects over 11 million children.
  • The number of Americans living in deep poverty is 3 million.
  • Nearly 93 million Americans live in poverty.
  • In terms of poverty, there is a racial disparity. Approximately 20% of black families live in poverty, 17% of Hispanic families, and 10% of white and Asian families. families. Native Americans have the highest rate of poverty, at 25%.

Moreover, in terms of social, economic, and political factors, there are many ways to identify poverty:

Absolute poverty

Poverty, which includes the lack of basic foods, clean water, health, shelter, education, and information, is also referred to as extreme poverty or abject poverty. In absolute poverty, there is a high death rate among children from preventable diseases like malaria, cholera, and water-borne diseases. In developed countries, absolute poverty is rare.

Absolute poverty was introduced in 1990 to measure absolute poverty by the standards of the poorest countries in the world. The World Bank reset it to $1.90 a day in October 2015. Due to the controversy surrounding this number, each nation has its own measure of absolute poverty.

As of 2022, the poverty threshold for individuals in the United States is $13,590. This amounts to $27,750 per year for a family of four.

As defined by Robert McNamara, who was the president of the World Bank from 1968-1981, “It is a condition so limited by malnutrition, illiteracy, disease, squalid surroundings, high infant mortality, and low life expectancy as to be beneath any reasonable definition of human decency.”

Relative poverty

In social terms, it is the standard of living compared to those living in the surrounding area. In other words, it measures income inequality. An example of being poor is not having the money for vacations, buying presents for the kids at Christmas, or sending them to college.

In general, relative poverty is measured as the portion of the population with incomes below a certain median income level. Furthermore, developed nations with wealth use it to assess poverty rates.

In European Union, the “relative poverty measure is the most prominent and most–quoted of the EU social inclusion indicators.”

Situational poverty

This type of poverty occurs as a result of adverse events such as environmental disasters, job losses, and serious health problems.

Even a small piece of assistance can make a difference since this type of poverty comes from unfortunate events.

Generational poverty

Individuals and families inherit it from one generation to the next. Since the people are trapped in the cause, there is no escape since they cannot access the tools needed to escape.

“Generational poverty occurs in families where at least two generations have been born into poverty,” Eric Jensen writes in Teaching with Poverty in Mind. “Families living in this type of poverty are not equipped with the tools to move out of their situation.”

Rural poverty

Typically, it occurs in rural areas with populations below 50,000. Compared to other parts of the country, these areas have fewer job opportunities, fewer services, and less support for people with disabilities. In the surrounding areas, most people depend on farming and menial labor.

“Most of the world’s poorest live in rural areas,” writes Homi Kharas, Constanza Di Nucci, Kristofer Hamel, and Baldwin Tong for Brookings. A total of 400 million rural people live in extreme poverty, which is greater than the combined numbers of Americans and Canadians living in extreme poverty. Approximately half of that population (approximately 200 million) lives in cities.

Urban poverty

Usually, it occurs in metropolitan areas with a population of over 50,000. Among the major challenges facing the urban poor are:

  • There is limited access to health care and education.
  • A lack of adequate housing and services.
  • Due to overcrowding, the environment is violent and unhealthy.
  • There are few or no mechanisms for social protection.

“According to the World Poverty Clock’s projections, rural poverty is expected to decline by 100 million (or 26 percent) from 395 million to 293 million over the next decade, largely due to economic growth and rural-urban migration that is reducing the absolute size of the rural population in many countries,” the authors adds. “Urban poverty, on the other hand, is not expected to decline very much (from 203 million today to 200 million), due to the expected increase in urbanization over the next decade, especially in Africa.”

Generational Poverty: A Closer Look

The phrase ‘extreme poverty’ is usually associated with generational poverty: poor parents, poor children, and poor grandchildren. Like genetics, poverty seems to be passed down from generation to generation in this situation. As a result, these families tend to be trapped in poverty until an external influence can help them escape poverty.

A family that has lived in poverty for at least two generations is considered impoverished, according to Urban Ventures. In many cases, families facing generational poverty have lived in poverty for a much longer period of time.

When a particular change in life results in a reduction of income and support, such as losing a job, getting divorced, or losing a parent, a person or family can experience situational poverty. Situational poverty can have a domino effect, but families tend to remain hopeful, knowing it will only last a short time. With generational poverty, this is typically not the case.

Key Factors Associated with Generational Poverty

Hopelessness

Generally, poverty is defined as being unable to meet basic living needs, explains Urban Ventures. As a result of generational poverty, families are also challenged by three other types of poverty:

  • Educational Poverty
  • Parental Poverty
  • Spiritual Poverty

Generational poverty sometimes results in the most damaging outcome – a perpetual sense of hopelessness made worse by the cumulative effects of these different types of poverty.

One generation follows another in a cycle of hopelessness. In the absence of hope and the belief that life can be better, motivation and energy are insufficient to break the cycle.

Surviving vs. Planning

Generational poverty traps people in the cycle of survival. Their attention is focused on today’s issue/challenge. A person may need money for food, a place to live, help with family issues, or unresolved health problems.

Every day presents a new problem. However, there is an air of urgency surrounding all of this. Most individuals don’t plan, unfortunately, in part because they believe they have sufficient control over their lives.

Values and Patterns

In contrast to those who have grown up middle class, those caught in generational poverty have very different values. There will be a greater focus on survival and short-term outcomes in generational poverty.

The values of the middle class are generally those of education and work. They are also regarded as productive citizens. As a result of generational poverty, counterproductive traditions like low educational emphasis may also be passed down.

What Causes Generational Poverty?

It is often assumed that poor people are responsible for their own circumstances. Their limited budget is spent on junk food, cigarettes, and alcohol. Perhaps they could dig themselves out of poverty and provide a better future for their children if they saved that money. Or maybe they just need to work harder. Then again, saving anything you can is a good idea, but it won’t help them pay for college or buy a house if they save twenty dollars every week.

It is more difficult to accept reality, however, because it involves acknowledging the systemic policies that perpetuate generational poverty. It’s true that some of those systems have given some of us an edge, but they’ve also limited some options for others.

A society that prizes rugged individualism can make it hard to acknowledge all the support that helped us succeed. Examples include tax breaks, parental support, or even not having to overcome unconscious biases regarding race and gender.

In short, generational poverty is caused by a number of factors. It is a multifaceted issue that is influenced by everything from racism to financial policies.

However, generational poverty is heavily influenced by the following three factors.

Inadequate education.

Education determines a household’s wealth and well-being. Therefore, a lack of appropriate knowledge and skills is the primary reason why so many families cannot escape poverty.

As an example, literacy, an essential skill for higher-paying jobs, is still absent in many remote and challenging regions of the world. In fact, UNESCO states that “about 124 million children today do not go to primary and lower-secondary school. Almost 2 in 5 who do finish primary school have not learned how to read, write or do simple arithmetic.”

Furthermore, chronic absenteeism, defined as missing more than 10% of the school year, is higher in low-income areas.

“The most alarming part is that multiple studies across various states show kindergartners to have the highest rate of absenteeism outside of high school students,” Marc Cutillo writes in Education Week. “Educators and policymakers have known for years that falling behind before 3rd grade has a high correlation not just with high school dropout rates, but with incarceration rates as well.”

“Children this young are not playing hooky or uninterested in learning—five minutes alone with any 1st grader yields more questions than you can answer without jumping on Wikipedia,” he adds. “The reasons these children stay home can all be traced to poverty.”

As a child falls behind in school, they have a greater likelihood of dropping out of school, being incarcerated, earning less in the future, or living in poverty later in life.

Resources are not available

Generational poverty is often characterized by psychological issues related to finances. For parents to make ends meet, they often work multiple jobs.

This behavior is also a part of “the scarcity mindset.” This is a mental shift due to the perception of scarce resources, which traps people in a cycle of insecure thinking and struggle to obtain short-term goals.

As a result of perceptions of scarce resources, this behavior is associated with “the scarcity mindset,” which traps people in a cycle of fear and insecurity. Since they are focused on surviving for the next few days or weeks, people trapped in poverty are unable to think about the future.

A mindset like this doesn’t allow adults or kids to think about college, careers, or higher achievements. Whatever dreams they do have, they often feel unreachable, and their lot in life is just to survive.

Additionally, this mindset and environment lead to a shortage of resources. Those who live in underserved areas may encounter difficulties when it comes to generating income.

In addition, living in constant worry about money can cause toxic stress, which can affect learning, behavior, and overall health.

There is a lack of determination

As opposed to the previous two factors, this last one refers to an internal characteristic that determines why poverty persists through generations. The majority of people afflicted by generational poverty lack determination and have a rather pessimistic and passive outlook on poverty.

“Perhaps more damaging in the long term are the findings on how people feel about themselves when they’re in poverty,” Dawn Foster writes in The Guardian. “They are less confident in their ability to succeed, leading to decreased professional and educational attainment, depression, and anxiety.”

They also reported a ‘negative self-stereotyping effect, whereby people living in poverty absorbed media stereotypes of those on benefits or unemployed as lacking warmth and competence. “Believing themselves to be fundamentally flawed, any achievement is tempered by a lack of confidence and subconscious self-loathing.”

A child raised in such an environment is at risk of developing “a condition in which children feel as if they have no power to change or control their circumstances,” notes Matt Repka in the Chicago Policy Review. “Children growing up in poverty find themselves in surroundings characterized by chaos, an absence of structure, and a perceived lack of control. Helplessness is then conditioned by continued exposure to uncontrollable, unpredictable stimuli.”

Even so, stress and external factors may push people into a state of hopelessness and devastation. As a result of poverty and financial concerns, a 2017 study proved that cognitive function can be affected by these concerns: poor financial management, insensitive parents, and less efficient employees are among the counterproductive behaviors caused by poverty and finance concerns.

How to Break the Poverty Cycle

Cultivate an abundance mindset

Changing a scarcity mindset is perhaps the biggest hurdle to overcoming generational poverty. You experience drained brain activity in your prefrontal cortex (the area of the brain associated with decision-making), like a computer attempting to handle too many tasks simultaneously. Decision-making takes longer, and stress and low confidence are more common. Planning for the long term becomes too demanding as well.

Similarly, scarcity on a larger scale can influence mindsets and decision-making. In recent years, the ability to make decisions quickly has been weakened by events such as the 2008 financial crisis. In addition, the Coronavirus pandemic and economic uncertainty may have exacerbated the situation.

The solution? Cultivating an abundance mindset

If we adopt the opposite mindset, a growth mindset, we will experience increased performance and more flexibility in the brain, among other benefits. As soon as we take risks and successfully complete them, our brains release dopamine. This primes us to seek out more dopamine by increasing those growth behaviors that initiated the release of dopamine.

That’s all well and good. What are the best ways to accomplish this? Here are some strategies you might find useful.

Acceptance

When you do this, you stop fighting where you are now with your precious limited resources. Taking stock of where you’ve been will help you know where you’re going.

Self-compassion

Regardless of what you have done in life up to this point, you should be proud of yourself for making it this far. Every habit or mindset you have today that you want to change once had a purpose or reason for existing. In short, be kind to yourself.

It’s all about finding that one thing

Don’t have enough money? There may be a great deal of love in your life, whether it comes from a spouse, parent, or friend. Your life is likely to include at least one abundant thing, regardless of how small it may be.

Set your own definition of abundance. Everyone has a different definition of abundance and an abundance mindset. Depending on your perspective, abundance might be perceived as scarcity by another. Without knowing what you’re aiming for, it’s hard to get into the mindset of abundance.

Start small

Change your mindset, thereby making small changes. Have you been feeling the pinch on your bank account lately? Identify areas where you can save money by creating a budget. Getting rid of your Netflix subscription could save you $10 a month. Even if it seems small, it adds up.

Mindfulness

The scarcity mindset gets ingrained in our minds for obvious reasons. To survive, they constantly analyze what needs to be done. This takes us out of the present. Mindfulness can help us think more clearly by slowing down our brains through meditation or simply paying attention to the present moment.

Journaling

The act of journaling may help you identify areas where you are abundant and areas where you would like to become more abundant if you are struggling with defining abundance.

Make education a priority

In order to overcome poverty, you need an education. Do your best to succeed in school, but do not feel responsible for doing it alone. If you have a teacher, a tutor, a guidance counselor, an administrator, a mentor, friends, or family members who are interested in helping you achieve your educational goals, you should accept their assistance.

You can develop your note-taking, studying, and test-taking skills with the help of teachers and other supportive individuals. You may be able to get accommodations or extra assistance if you struggle in certain areas, such as reading or math.

Make a commitment to completing your high school education

The greater your education, and, especially your diploma — the more likely you are to rise out of generational poverty. It isn’t necessary to complete a high school diploma as your ultimate educational goal. But it is certainly a good place to start.

  • There is a significant difference in average lifetime earnings between people with high school diplomas and those without.
  • It may be a good idea to set another goal, such as earning a college scholarship, depending on your situation. Or, you might set a goal to enter a trade school or apprenticeship program.

Identify your post-educational goals and set them in action

Due to the struggles they’re facing today, people stuck in a cycle of poverty often find it difficult to plan for or even think about their future. You can, however, navigate yourself out of poverty by planning for the future and setting goals.

Again, education is vital here, as it both encourages you to think about the future and allows you to explore it.

  • Think about how you want your life to be in 5, 10, or 20 years. Next, list both the obstacles and what you will need to do to succeed.
  • Describe your future goals to those who can help you, such as teachers, coaches, or community mentors.

Increase your financial literacy

“When there is a financial crisis, you should always stop the bleeding of money,” writes Deanna Ritchie in a previous Due article. Buying a cup of coffee every morning or not packing a lunch. When left unchecked, these little everyday expenses can add up.

“Of course, there are also much bigger problems than enjoying a daily latte,” says Deanna. “And that’s because you may not have basic money management skills.” For instance, you may not know where your money goes or curb unnecessary expenditures.

The good news is that there are many tools and resources available to help improve your financial literacy. The best part? The majority of these are free.

  • A number of financial blogs, such as Due, offer expert advice on everything from debt management to retirement planning.
  • Besides blogs, you can also connect with others in similar situations by joining financial forums.
  • Visit your local library and read books like You’re So Money: Live Rich, Even When You’re Not by Farnoosh Torabi or The Index Card: Why Personal Finance Doesn’t Have to Be Complicated by Helaine Olen and Harold Pollack.”
  • Podcasts such as Bad With Money With Gaby Dunn and DIY Money provide useful personal finance information.
  • Subscribe to Debt Free Millennials on YouTube if you’re a visual learner.
  • When you have the time, you can also enroll in a financial course. FYI, Khan Academy offers 100% free personal finance classes.
  • In addition, you can try a number of free online budgeting tools. You can use these tools to track your spending, automate savings, and reach your financial goals. You can even have some devices make intelligent suggestions, find better utility rates, and cancel unnecessary expenses.

Leverage community resources

Shifting your mindset and educating yourself are both excellent starting points. Let’s be honest, though. You can only go so far with these. At some point, it’s all about the opportunity.

As comedian Trevor Noah says in his book Born a Crime, “People love to say, ‘Give a man a fish, and he’ll eat for a day. Teach a man to fish, and he’ll eat for a lifetime.’ What they don’t say is, ‘And it would be nice if you gave them a fishing rod.'”

In order to achieve mindset change, you need tools and support. Fortunately, your local community has resources to help you in this situation.

Are you looking for financial advice or more active assistance? Would you like to learn how to start investing or understand your taxes? Need assistance in another area of finance?

Rather than struggling alone, take advantage of the resources available to you. Even though reading books or articles can be great, it can sometimes be helpful to interact with people in person.

The following places offer free or low-cost help:

  • Nonprofit organizations, such as United Way or Home of Hope.
  • The IRS Tax Assistance Center provides tax assistance specifically.
  • Public libraries or schools.
  • Community centers and churches.

A number of these organizations provide tax preparation services, financial literacy education, and help with finding legitimate financial products. Sometimes they even provide one-on-one coaching in addition to hosting financial speakers.

You might also consider hiring a certified financial educator, counselor, or advisor, who could assist you in improving your financial situation.

Invest without fear

It’s no secret that many people are afraid to invest. However, some populations are more affected than others.

Among African Americans, for example, Prudential’s African American Financial Experience study found most people focus on debt reduction and household management. In addition, they may not be comfortable discussing topics such as investing and wealth transfer.

Unfortunately, much of what is offered in financial literacy training is focused on budgeting and debt relief. Obviously, having a good grasp of these topics is essential for financial success. To build wealth, however, and to pass it from generation to generation, investing is a crucial component.

So, how can you get over your fear of investing?

To start, make every effort to live within your means. You can then use the money you’re saving to pat down debt or build an emergency fund. After that? Invest it.

“I know that investing can give some of you a panic attack,” says Jeff Rose, founder of Good Financial Cents. “But, there are plenty of low-risk investment options out there. Some of my favorites include;”

  • High-yield savings account. In addition to being federally insured, these savings accounts pay higher interest rates than the average savings account.
  • Short-term bonds. In a short-term bond fund, investments are made in securities that are due within one‌ ‌to‌ ‌three‌ ‌years. ‌A commercial paper, a certificate of deposit, or a government security can be included in this category.
  • TIPs. This a type of U.S. Treasury bond ‌that protects against‌ ‌inflation.
  • Dividend-paying stocks. ‌With dividend stocks, you can generate another income source and gradually build your wealth.
  • Preferred stocks. A preferred stock protects shareholders and gives dividends priority.
  • Annuities. Once you’ve maxed out your other retirement accounts, buying an annuity offers a guaranteed lifetime income. With a rider, you can pass any remaining assets to your beneficiaries.
  • Online real estate. Real estate can be purchased on these platforms for commercial or residential use.

“Also, you can use robo-advisors to automate investments, such as Betterment, M1 Finance, or Wealthfront,” adds Jeff.

Stimulate your mind and body

You might feel like wasting your time on hobbies when you’re struggling just to get by. Children, teens, and young adults benefit most from activities that stimulate their minds and improve their moods — especially those that make them think and improve their moods.

Crossword puzzles or free or low-cost activities like cooking, photography, or foreign language classes offered after school or at local community centers might be a good idea.

When you’re struggling with poverty, spending money on fresh fruit and vegetables or taking time out to run may seem wasteful. However, in order to change your circumstances, you will need to strengthen your physical, mental, and emotional health.

  • Utilize any before- or after-school food programs and school lunches available to you as a student. Getting advice on healthy food options from cafeteria staff, school nurses, or nutritionists is never a bad idea.
  • Your food budget should be spent on fresh fruits and vegetables, whole grains, and lean proteins first, then fewer healthy options if necessary. When possible, take advantage of food assistance programs and farmer’s markets to save money.
  • You don’t need to spend a fortune on exercise. For instance, a 30-minute brisk walk five times a week can have a significant health impact.

Steer clear of predatory payday lenders

From the name alone, a payday loan sounds like a one-day loan, doesn’t it? Getting sucked into the cycle of payday loans, however, can lead to years of paying off those loans.

Payday loans are used by 12 million American adults each year. Annually, borrowers take out eight $375 loans and spend $520 in interest. As far as I’m concerned, those math equations just don’t add up.

According to the Consumer Financial Protection Bureau, payday loans can cost you $10 to $30 per $100 borrowed. To put that another way, a two-week payday loan at a fee of $15 per $100 borrowed would result in a 400% Annual Percentage Rate (APR).

For a sense of perspective, credit card APRs range from 12-30%. But are there any alternatives to credit or credit cards if you do not have access to credit?

Paycheck advance

Employees are often given the opportunity to receive their earnings before their paychecks are due. It may be possible for a company to pay an employee for seven days of work if the next paycheck is five days away. This is not a loan. Rather, at the end of the month, it will be deducted from your next paycheck.

Borrow from family or friends.

To get yourself out of trouble, borrowing money from friends or family is often the fastest and least expensive option. If you are going to take out a business loan, you would expect to pay a lower interest rate and have a longer payback period than two weeks. However, make sure this is a business deal that benefits both parties. Make sure the loan terms are clearly spelled out in the agreement to avoid any bad blood.

Credit counseling

Various nonprofit agencies offer free advice on setting up a budget and chipping away at debt, including InCharge Debt Solutions. InCharge credit counselors can connect you with resources in your area that can help with food, clothing, rent, and utility bills.

Debt management plans

Credit counseling agencies, such as the previously mentioned InCharge, offer debt management plans to reduce credit card debt for a monthly fee. Depending on your agreement, the creditor may offer the agency a lower interest rate. As a result of the agency paying the creditors, you have more money to pay your bills and reduce the amount of debt you owe.

Debt settlement

As a debt-relief option, debt settlement can be helpful if you’re struggling to keep up with unsecured debt (credit cards, hospital bills, personal loans). If you settle your debt, you will pay less than you owe, but it will damage your credit report and score greatly.

Local charities and churches

The number of charities and churches that are willing to offer free assistance when you hit a bump in the road is surprising. If you need help with a few hundred dollars, organizations like the United Way, Salvation Army, and church-sponsored ministries such as the St. Vincent de Paul Society may be able to help.

Community banks and credit unions

Local banks and credit unions are allowed to make smaller loans on easier terms than large regional or national banks. Comparing interest rates could save you 10%-12% as opposed to 400%-500% on payday loans.

Peer-to-Peer Lending

Check out peer-to-peer lending websites if you’re still having trouble finding a lender. Interest rates might be closer to 35% than 6% for those with great credit. At the same time, 35% remains better than the 391% from payday lenders.

Find a mentor

Take steps to overcome generational poverty by seeking help from a mentor. After all, fixing your finances doesn’t have to be a one-man show. Having a mentor can be extremely beneficial in finding a job that pays better and setting you on a path that is more lucrative.

In terms of your career and finances, it is not easy to take the next step. It is even harder to see yourself as a successful person. But mentors can assist you in moving forward. You can transform your own life with the help of a mentor who can provide you with educational and informational resources.

One organization that aims to provide career training and mentorship is Management Leadership for Tomorrow. Mentorship can help you learn from those who have come before you and get a leg up. As you improve your finances and take the next steps to grow your wealth, it can greatly shorten the learning curve.

Keep your credit score in mind

“Credit scores and history play a critical role in an individual’s ability to achieve economic security and build wealth in the U.S., but that opportunity is not easily attainable for communities of color,” states a report by CFSI.

In the long run, having bad credit can cost you a lot of money, no matter who you are.

Why? Poor credit can increase interest rates, car insurance costs, and make it difficult for you to borrow money.

Additionally, credit problems could cost you more than just money. It can even affect your ability to qualify for certain jobs in many states. Approximately 95% of companies check potential employees’ backgrounds, according to a 2018 HR.com report. Also, 16% of companies pull credit or financial checks on all job candidates, and almost one-third do so for some candidates.

Therefore, building your credit responsibly is one of the best ways to break the cycle of poverty. Depending on your situation, you can establish or rebuild your credit in several ways, such as:

  • Pay all of your bills on time. This includes rent, utilities, and credit cards.
  • If you have a credit card, try to pay more than the minimum payment.
  • Don’t use more than 30% of your credit. For example, if you have a card with a $1,000 credit limit, you should never carry a balance over $300.
  • Don’t open more than one credit account at a time.
  • Avoid applying for a new credit card if you don’t think you’ll be approved.
  • Use your credit cards at least once a year to avoid your accounts being closed for inactivity.

Don’t give up hope

When you grow up in generational poverty, you develop a fatalistic attitude. In other words, this is a mindset of “that’s just how it is” and “it will never change.”

In some cases, you may even believe that poverty is your fault — if only you had worked harder, tried harder, and so on. But, holding these beliefs limits your ability to see an escape from poverty unnecessarily.

  • Many people blame poverty solely on themselves. However, others blame others, such as the wealthy or the government. Some people do both. But, it won’t help you overcome poverty if you decide who to blame.
  • Accept the fact that poverty is the result of a wide range of social, economic, environmental, political, and individual factors rather than assigning blame. When we understand why poverty exists, we can recognize potential ways out.

Frequently Asked Questions About Generational Poverty

1. Why does poverty still exist?

For those born into poverty, breaking free from the cycle is nearly impossible. Poverty still exists for a number of reasons. Economics, cost of living, education, wages, health insurance, housing, transportation, and mental health all have an impact.

2. What is generational poverty?

Worldwide, millions of families live in poverty due to generational poverty. In general, poverty affects multiple generations when it becomes a family pattern for at least two generations.

Generational poverty is different from situational poverty, in which a family experiences poverty briefly due to a crisis. Because of its intergenerational nature, people affected by it lack any means to change their situation for themselves or their children.

3. How is poverty defined?

In many cases, poverty is used as a relative term. A low-income family in America may be considered a middle-class family by the standard of living in another country, depending on that country’s economic environment and minimum wage.

But globally, the standard definition of poverty is earning less than $1.90 per day. Living on this wage is extremely difficult. Yet surviving below the $1.90 per day poverty line is a reality for hundreds of millions of people around the world.

Poverty isn’t just about economics

Income alone does not determine global poverty or generational poverty. There are three dimensions to poverty, according to the Oxford Department of International Development:

  • Health.
  • Education.
  • Living standards.

Poverty can be caused by a lack of access to health care, education opportunities, affordable housing, nutritious food, clean water, or social services such as food stamps or Medicaid. It is rare for someone to be affected by only one of these dimensions of poverty.

It is especially difficult to escape generational poverty due to its multidimensional nature. After all, there are still many obstacles standing in the way of someone even if they can overcome one dimension.

It is also possible for generational poverty to perpetuate itself. When the parent of a low-income family struggles to make ends meet, the child knows only hardship. Often, it seems impossible to imagine a different future, and hope is smothered.

4. What causes generational poverty?

Poverty does not occur overnight. Many factors contribute to its development over time.

Resources or education are lacking

Education is the process by which people acquire the skills they need to pursue a profession, as described by Horace Mann as “the great equalizer.” Individuals cannot obtain the knowledge and training required for a well-compensated and fulfilling occupation without access to high-quality educational resources.

Geography

Sub-Saharan Africa is home to 27 of the world’s poorest countries, where 30% or more of the population lives in poverty.

Compared to high-income countries, living in a low-income country presents its own set of obstacles. Social safety nets may not be provided to families in low-income countries, for example. The challenges of growing up in a high-income country are also significant.

A report from the National Center for Children in Poverty notes that among Americans who were low- to middle-income in their youth, 12% to 13% remain in poverty in their twenties.

Being unable to earn a living wage

When families earn a livable wage, they can afford basic, everyday living expenses without relying on government assistance. Family members are unable to take advantage of opportunities to improve their circumstances if a livable wage is hard to come by.

Minimal or no capital

The term capital refers to wealth or assets that can be invested, produced, or used to generate income. In order to make money, you must first have money. Income growth is prevented, and generational poverty is perpetuated when there is no capital to begin with.

A vulnerability to natural disasters.

Environmental catastrophes like earthquakes, hurricanes, tornados, and flooding can strike anywhere in the world. The devastation of natural disasters is intensified in some regions due to poor government, bad infrastructure, high population density, and unequal living conditions. And the poor often pay the highest price.

When families live in poverty, natural disasters rob them of what they have, making recovery difficult and advancement difficult. As a result, generational poverty is perpetuated.

5. Are Americans who experience poverty now better off than a generation ago?

“Material deprivation is not as widespread in the United States as it was 30 or 40 years ago,” write Nancy K. Cauthen and Sarah Fass for the NCCP. “For example, few Americans experience severe or chronic hunger due in large part to public food and nutrition programs, such as food stamps, school breakfast, and lunch programs, and WIC (the Special Supplemental Nutrition Program for Women, Infants, and Children).”

Over time, Social Security contributed significantly to the reduction of poverty and economic insecurity among the elderly. With increased wealth and technological advances, ordinary families can afford larger homes, televisions, computers, cell phones, stereo equipment, air conditioning, and multiple cars.

There is some debate as to whether or not a family with air conditioning or a DVD player is poor. The majority of Americans, however, consider cars, computers, TVs, and other technologies to be normal rather than luxury items. You need a car to commute to work and a computer for your children to keep up with their education.

Remember Hurricane Katrina’s devastating effects as well. “Prior to the hurricane, New Orleans had one of the highest child poverty rates in the country — 38 percent (and this figure would be much higher if it included families with incomes up to twice the official poverty level),” the authors add. “One in five households in New Orleans lacked a car, and eight percent had no phone service.” In addition to the widespread social and economic isolation, displaced families and children suffered devastating effects from the hurricane as well.

Often, families ignore the other types of resources they need to provide their children with a decent life, such as safe homes, good schools, good jobs, basic services, and life skills.

John Rampton

John Rampton

John Rampton is an entrepreneur and connector. When he was 23 years old, while attending the University of Utah, he was hurt in a construction accident. His leg was snapped in half. He was told by 13 doctors he would never walk again. Over the next 12 months, he had several surgeries, stem cell injections and learned how to walk again. During this time, he studied and mastered how to make money work for you, not against you. He has since taught thousands through books, courses and written over 5000 articles online about finance, entrepreneurship and productivity. He has been recognized as the Top Online Influencers in the World by Entrepreneur Magazine and Finance Expert by Time. He is the Founder and CEO of Due.

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