And finally… debt impairs psychological and cognitive function, study finds

While some may assume that poverty is the result of laziness, a lack of self-control or irresponsibility, a new study by the National University of Singapore (NUS) has found that chronic debt actually hurts the poor person’s ability to think clearly and make good decisions.

Dr Ong Qiyan, deputy director of the Social Service Research Centre at the National University of Singapore (NUS), said of the study’s findings: “Debt burdens the poor psychologically; it creates severe anxiety and it harms their ability to make good decisions. This may be why we observe them making decisions that seem harmful for themselves.”

The researchers sought to find out how chronic debt, which is common among the poor, keeps them trapped in poverty.

Published in the Proceedings Of The National Academy of Sciences on Monday, the researchers learnt that having multiple debts weighs heavily on a person’s mind.

This is especially so for the poor, as they often live hand to mouth while trying to pay bills so that the electricity supply or telephone line, for example, is not cut off due to arrears.

“This saps their mental energy, leaving them with less remaining brain power to stay focused, resist temptations and think clearly when they have to make important decisions,” said Dr Ong.

“If we are worrying about managing debt and calculating what we can afford this month and what we have to give up, we have less brain power for our job, for improving ourselves or to help our children with their studies.”

Dr Ong pointed out that emerging research in the field has found poverty reduces one’s ability to make good decisions and that it hinders them from succeeding in life.

“Even if you have the same merit ability as others, you will face more difficulties in achieving your potential. Being poor may make you more likely to turn down a training opportunity, avoid acquiring new skills or trying new innovations - all because there is too much on your mind,” added Dr Ong.