Sunday, May 28, 2006

Poverty and the dysfuntional family

Today is the ST, there was a feature on poverty showcasing families of low income as well as children from such families. The writer wrote about the widespread cases of correlation between poverty and family dysfunctionality. The paper goes on to give some real-life examples of poor families and how they cope with everyday life. Among those featured were a family of 5 malay kids supported by their grandmother, an Indian family of four supported by their mother, a Chinese family whose sole breadwinner had renal problems and a 17-year old who had to work hard to make ends meet.

What I found interesting was that 40% of those who came from poor backgrounds were from "broken" families. The breadwinner (most cases the father) had either left the family (because of divorce or death), was in jail or was in drug rehabilitation. The remaining 60%, interestingly, were from families which were whole but whose parents either could not make sound financial decisions, or did not do enough financial planning. It is worth noting that the majority of the poor are people who did not budget for their expenses or make financial plans on a medium to long-term basis. These throw up two implications:-
  1. That people who do not know or bother to plan financially will end up in the lower echelons of society in terms of income level and social recognition
  2. Financial planning is something which families with children don't seem to know enough of, which results in dysfunctionality and the classic situation of the "problem family"

For point 1, I do concur that financial planning is very important. These days, there are numerous banks and insurance companies touting financial products which are supposed to help us build our "nest egg" and secure our future. Financial planners (formerly insurance agents) have sprouted faster than mushrooms in order to assist families and individuals with the complexities of investing and saving their hard-earned money in high-yielding securities or insurance policies. The amount of financial choice we have in Singapore is staggering due to our level of economic development. Yet, somehow, apathy or lack of education is a stumbling block for many families who are trapped in the poverty cycle. In Singapore, the stark truth is that people tend to despise others who are not as financially capable as them or earning as much. We are a highly stratified society who are highly involved in the proverbial "ratrace" for financial success and monetary gains. Social recognition and "loss of face" are very closely tied to money. It is a sad but true case of a modern society which is moving towards materialism rather than compassion, but more on that in my future postings.

To date, I have heard of friends who have spent an inordinate amount of their take-home pay on lavish items such as branded goods. Others blow a huge chunk of their salary on instalment payments for a new car or a plasma TV home entertainment system. Can we say that these people (most of whom have just started working) don't know how to spend and save their money ? Maybe.....or perhaps it is a case of live today first, worry about tomorrow later.

This kind of thinking helps to reinforce the fact that Singaporeans do not know how to plan their finances, which brings me to point 2. These are people who knowingly spend their money on luxury items or things they cannot afford. Maybe it is a case of upbringing because children who see their fathers or mothers spending lavishly will also tend to do so as a form of emulation, without knowing of the negative ramifications. As the article also points out, parents who constantly borrow money from friends and relatives help to perpetuate the mentality that doing so is acceptable. We, as a nation, should have collective national education to help educate people about basic financial planning. As I understand, there is already a program started by the MAS in 2003 called the MoneySense program, which helps to provide Singaporeans with basic financial literacy. The link is here >> MAS MoneySense.

Going back to the question of dysfuntionality, my wife agrees with me that not only poor families suffer from this, but it is the nature of the problems which differ depending on the income and education levels of the families involved. The ST article does highlight many relevant points as to why low-income families have a higher tendency to become dysfunctional. What we should ask ourselves is: how do we manage people's expectations and how do we manage society's perception of such people ? In our increasingly materialistic society, money has become one of the most important factors to segregate people This creates social barriers and people lose the ability to communicate with others from different "levels". There are cases of unreasonable expectations of the husband from the wife and this can be a possible cause for family friction. Some families may also feel ashamed of their status which may exacerbate the problem as they are afraid to "lose face" if they ask for governemtn assistance. There are a myriad of factors which contribute to this worrying social trend which I will not state in full.

All I can say to conclude this post is: Be mindful of people's expectations, and try to be financially literate. This will prevent you from suffering should a sudden loss of income occur (e.g. loss of job or breadwinner) and will also help to mitigate the risk that conflicts willerupt because of misunderstandings. To reduce dysfunctionality, we have to educate, manage expectations and provide community support.

3 comments:

Anonymous said...

I don't think that the blame rests solely on "bad" financial planning. You know my stance on social policies. Of course it always appears as such. I'm not saying that all the blame lies with the social policies here -- certainly good financial planning will stand one in good stead. But of course in the papers we see what is allowed us...

well this branded goods thing is part of marketing. They are trading on the social value aren't they -- of "face"? So assimilate the ideology that the marketing folks put out there (this can get rather silly, like drink beer = get pretty girl) and you buy the stuff. So it's a matter of resisting and seeing "beyond" the marketing to what you truly need, not want, although most "wants" are marketed as "needs" (which causes the confusion).

lorraine

John Riemann Soong said...

It could also be a self-perpetuating cycle. Less money means less education, which means less money, less education, less awareness, etc. ad nauseum.

musicwhiz said...

Hi,

I guess what you are talking about is a vicious cycle....which I agree with. A cycle which most below the poverty line cannot break because they are not given the opportunities and the chances in life :)