Why do poor people make poor financial decisions?

One generation of Singaporeans will go down in history as the heroes who lifted this nation out of poverty with their blood, sweat and tears. They are the shining examples of people who understand the value of money and were taught by scarcity and necessity to be thrifty.

Unfortunately, another generation of Singaporeans may be going down the wrong side of history as the ‘first-world’ poor; the people who own flat-screen TVs but cannot afford rent, the people who dress up impeccably but cannot pay their electric bill, or worse still the people who rack up bills and hide them in a box hoping that the bills will go away. If our forefathers were able to work and thrift their way out of poverty, why do the poor people of today make poor financial decisions? This article takes a closer look at the reasons behind this phenomenon and poverty at large.