The Paradox of Resisting Poverty Preparednes

In the face of higher inflation, foreclosure, bankruptcies, unemployment, and evictions, one would expect people to be motivated to practice poverty preparedness.

After all, having a safety net and being ready for hard times can provide a sense of security and stability.

However, it is surprising that many individuals resist such preparations, even when the risk of economic uncertainties looms large.

Cognitive Dissonance:

1. One possible explanation for this resistance is cognitive dissonance—the psychological discomfort we experience when our actions contradict our beliefs or values. The prospect of actively preparing for poverty might clash with individuals’ self-image or optimistic outlook.
2. As a result, people tend to avoid contemplating and acknowledging the possibility of experiencing financial hardships, leading to resistance to proactive measures.  It won’t happen to me mentality.

Present Bias and Optimism Bias:

1. Present bias refers to our tendency to prioritize immediate gratification over long-term planning. Similarly, optimism bias leads us to believe that negative events are less likely to happen to us personally.
2. These biases can make individuals reluctant to engage in poverty preparedness because they prefer to focus on short-term pleasures and maintain an optimistic perspective, often underestimating the risks ahead.

Psychological Defense Mechanisms:

1. When confronted with the possibility of economic crises, individuals may employ various defense mechanisms to cope with anxiety and fear. Denial, avoidance, and rationalization are common psychological strategies people use to protect themselves from the psychological distress associated with contemplating poverty.  As has often been said, denial is not a river in Egypt/
2. By minimizing the potential risks and evading the need for preparations, individuals attempt to preserve their emotional well-being, albeit at the cost of long-term stability.

Loss Aversion:

1. Loss aversion is another influential psychological factor that influences our decision-making. People are more motivated to avoid losses than to seek gains. When faced with preparing for poverty, individuals may perceive it as a loss of their current resources, such as money, time, or comfort.
2. The fear of losing what they have can override the potential benefits of poverty preparedness, leading to resistance. I often see this in retirees who cling to knickknacks and junk that steal their time and energy. Accumulating more stuff has become a religion. My daughter has six hoodies – in Florida. Makes no sense.

Social Comparison and Stigma:

1. Social factors profoundly influence human behavior.  We do care what others think of us, even when we know their opinions are useless.
2. People tend to compare themselves to others and strive to maintain a positive social image.
3. In societies where poverty or financial struggles are stigmatized, individuals may resist preparations for fear of being judged or ostracized. The desire to conform to societal norms and avoid disapproval can overshadow the rational need for poverty preparedness.

Conclusion:

Understanding why people resist poverty preparedness is essential for developing effective strategies to encourage proactive measures during economic uncertainty. Cognitive dissonance, present bias, optimism bias, defense mechanisms, loss aversion, and social comparison all contribute to this resistance.

By addressing these psychological factors and fostering a culture of preparedness, we can empower individuals to overcome their resistance and take steps toward a more resilient and secure future.  Security comes from the ability to survive and thrive in hard times.