Millions of people in the United States are considered poor. In fact, per the United States Census Bureau, in 2022, the official poverty rate was 11.5%. That means nearly 38 million people in poverty.
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As many people who grew up in poorer families could confirm, the effects of the situation are likely to follow you into adulthood. In fact, there’s something called the “Growing Up Poor” Tax. Here’s a look at what it is and how it may impact you. Additionally, here are 11 tips to help you live below your means.
Growing Up Poor and Trauma
In a video essay from The Financial Diet, host Chelsea Fagan and her guest Dr. Shay Harris-Pierre dissected the realities that come with growing up poor. Dr. Harris-Pierre is a licensed professional counselor and financial therapist.
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The two talked about how that trauma follows people well into adulthood. That’s true even for those who later shifted to higher economic classes.
“Even if we do change classes, for many people we will always remain somewhat clockable as having come from very little,” Fagan said. “There is actually a huge amount of stigma attached to coming from a lower-income background.”
“Growing Up Poor” Tax
It may be possible to think of the “Growing Up Poor” Tax as one that follows a child into adulthood. They may not have had access to a great deal of materialistic goods, which may have set up a certain mindset when they grew up.
“The truth is that having grown up poor does tend to radiate throughout many aspects of our lives,” according to Fagan. “We live in a society that continually tries to remind us of where we came from because ultimately having poor people is of huge economic benefit.
“Everything from our psychological and physical health to our aesthetic appearance and presentation to our social and cultural norms and habits are deeply impacted by the class in which we grew up. And although America often likes to imagine itself a classless society, we go pretty far out of our way to make sure that if you grew up in a certain way, it is very hard to make people forget.”
Seeking Safety and Stability
Fagan’s guest, Dr. Harris-Pierre, discussed how some of the trauma and uncertainty of growing up poor follows many people into their adult years.
“In most of these cases, it’s less about spending frivolously just to spend and more about seeking safety and stability,” Dr. Harris-Pierre said. “What I’ve noticed in my clients is that even after a level of safety and security is established, those areas of the brain that are related to survivor survival are still in overdrive. That leads to it and it impacts their financial behavior and it creates financial behaviors that are rooted in a trauma response…”
While it may be very helpful for an adult to look back and reflect on how far they’ve come, the uncomfortableness of doing so can lead many people to avoid doing so.
“We don’t often unpack the huge effects that this economic instability has on our mental health, even as we make financial progress,” Fagan said.
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This article originally appeared on GOBankingRates.com: Financial Therapist: ‘Growing Up Poor’ Tax — What Is It and Does It Impact You?
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