(RxWiki News) Worries about money can create a unique type of exhausting stress. Thinking and reasoning may become slower and more inaccurate as a result of budgetary concerns.
In a recent study, researchers asked a group of low-income and higher-income individuals to perform spatial reasoning tasks while thinking about budget stress.
The results showed that budget stress in low-income individuals reduced mental function and decision-making abilities in a similar way to losing an entire night’s sleep, but not in higher-income individuals.
"Check your local library for financial planning help."
Jiaying Zhao, PhD, assistant professor of psychology at the University of British Columbia, led this investigation into how poverty can affect mental function and decision-making.
According to the study authors, a human’s ability to process information and make decisions has a limited capacity. Much like a muscle, each day mental function can wear out when stressed.
Preoccupation with poverty-level money stressors can tap out the mind, leaving fewer resources to help guide decision-making, motivation and mental focus.
For this two-part study, the researchers began their first experiment by testing 101 paid participants at a shopping mall in New Jersey.
The participants had a low-range household income of $20,000 and a mid-range household income of $70,000 per year.
During the experiment, the researchers asked participants to think about how they would handle either an expensive or an inexpensive car repair, and then to perform a common spatial task used on IQ tests.
Both the low-income and the higher-income participants did equally well on the spatial task while thinking about inexpensive car repairs.
The wealthier participants did better on the spatial task compared with the low-income participants while thinking about expensive car repairs.
The speed and accuracy of responses on the spatial task was also measured to gauge control over mental function.
The higher-income participants showed nearly double the amount of control over mental function compared with low-income participants during the task.
For the second part of the experiment, the researchers tested mental function in 464 sugarcane farmers in India before and after harvest season.
On a scale from 3 to 6, farmers performed roughly one point better on the spatial task after the harvest, when they had more financial security, compared with their scores before the harvest.
The same farmers took nearly twice the amount of response time for the spatial task before the harvest compared with after the harvest. The farmers made nearly double the errors on the same spatial task before the harvest compared with errors after the harvest.
The researchers accounted for nutrition, work effort, non-monetary stress, and adjusted for language and math abilities.
The study authors concluded that the stress of poverty reduced mental capacity by an average of 13 IQ points, which is similar to the loss of a whole night’s sleep.
“Previous accounts of poverty have blamed the poor for their personal failings, or an environment that is not conducive to success. We’re arguing that being poor can impair cognitive functioning, which hinders individuals’ ability to make good decisions and can cause further poverty,” Dr. Zhao said in a press statement.
"When stressed, our mind has less capacity to process information and make decisions. Results of this study indicate that financial stressors, specifically, can lower our cognitive functioning. The researchers pose that this can become a cyclical problem," Jamie Kuhlman, PhD, a licensed psychologist in private practice in Austin, Texas, told dailyRx News.
"The more financial stress, the lower the decision-making abilities, which might lead to poor decisions regarding money and create more financial stress," said Dr. Kuhlman.
This study was published in August in Science.
The National Science Foundation, the John Simon Guggenheim Memorial Foundation, the International Finance Corporation and the Institute for Financial Management and Research Trust provided funding for this project. The authors declared no conflicts of interest.