Hey, guys. It's Chelsea from
The Financial Diet. And if you have not
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VIP for her four week course starting January 25. 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.
