Intergenerational poverty is a condition where poverty is passed down from one generation to another. The poor decisions that parents make affect children over several generations to come. For example, some parents have the opportunity to acquire assets, but they do not hence making their lives poor. 

Children try to help them, but they are overwhelmed by the responsibility to take care of their poor parents. The cycle continues for several generations.

Access to quality education and good health care services are among the pillars that people face in their decision to improve their quality of life. Lack of access to social welfare services and lack of capital for investments in a given generation can lead to intergenerational poverty. There are several measures people can take to address the issues.

How to Overcome Generational Poverty?

Several factors lead to intergenerational poverty. Dealing with the root cause can help. The issues that lead to intergenerational poverty may have been in existence for several decades, even centuries. For instance, in America, the legacy of slavery, Jim Crow laws, and racist policies such as redlining put African-Americans in a perpetual cycle of poverty.

It may require hard work and new government policies over several years to overcome the issues. Here are some of the steps people can take to overcome intergeneration poverty:

Learn basic financial literacy

Sometimes you may be a victim of intergenerational poverty due to a lack of good practices when handling your finances. Being numerate, learning how to delay gratifications, and mastering your cash inflow and outflows are effective ways to start loosening the impoverished chain. 

 For example, you should have some of your earnings invested in some kind of tax-deferred investments vehicles for your retirement. Preferably, you should put money away for retirement before you start paying your discretionary and nondiscretionary expenses. 

The type of loans you take and everyday financial decisions will affect your life in the future. If you can change the way you spend your money, you will increase your chances of dealing with the poverty that may have been affecting your family members. The small steps you will make towards investing in different ventures will break the poverty cycle in the future.

Build credit responsibly

You need a good credit score to access loans with better interest rates. Sometimes people end up in poverty because they incur expenses that will lead them to get stuck in the poverty cycle. Learn the best practices when building credit.  

It is necessary to have credit and ensure you maintain a good history to access funds when necessary. When you do not have a good credit score, you narrow down your options and end up in loans that will tend to exploit you.

Compare financial products and institutions.

 A good credit score will give you plenty of options when it comes to financial products. Before you take any loan or sign up for any banking service, it is essential to check out the products available in the different institutions and then decide on the best. 

Some institutions have a good reputation for availing of the suitable loans that can help you acquire assets and grow financially. Compare the several financial services available in the market before you sign up for a given service.

Avoid predatory payday lending.

Try as much as possible to avoid predatory leaders. They will tend to charge high-interest rates because you do not have another option. You can prevent predatory lenders by coming up with a budget. Cut down your expenses and ensure your income can accommodate all your expenses and still have some money for an emergency. 

If you can have a habit of having some money for an emergency, then it will be easy to avoid predatory lenders. They will take advantage of you and charge you high-interest rates. The high-interest rates will affect your cash flow and push you deeper into poverty.

Understand the terms when shopping for a loan

Before you take any loan, check out the terms and conditions. Some loans will have hidden charges that can make you fail to attain financial stability. 

When you shop around for loans, compare as many lenders as possible. Some lenders can promise to offer cash fast without checking your credit score, but they will expose you to many hidden charges. Be careful of such lenders and avoid them if necessary.

Some lenders end up charging high fees. They will expose you to several charges that will end up costing a lot of money in the long run. You will start regaining financial stability after you look for ways of avoiding exploitative lenders.

Change mindset towards money

You have a certain mindset towards money. It is essential to change your mindset towards money. Some families believe they cannot make money. 

The way you perceive money will play a big role in your life. If you know how to deal with money and develop a positive attitude, you will attract money to your life. 

Some people fail to attract money to their lives because they believe they cannot make money. If you can start small and work hard, it is possible to change your family trajectory and start enjoying the good life.

Public libraries or schools

You need access to good education before you can gain knowledge to qualify for well-paying jobs. Some families cannot access quality education because they do not have money to access quality education. 

They can turn to the public libraries and schools that charge fair prices. As a parent, you can give your kids a good foundation by enrolling them in a school where they will get the right education. Compare the several schools available and enroll your kid in a school where they will get the best training.

It will contribute to making them get the right training that will work towards making them get the right skills to get out of poverty.

Focus on your credit

There are several things you can do to fix your credit. For example, ensure you pay bills on time. Check out your credit history often and dispute any wrong charges that may have been enacted.

If you can have a good credit score, there is a high chance you will attract affordable financial products that can contribute to helping you invest and start making money in the process. 

When you start working on your credit score, you will tend to avoid exploitative loans offered to people with bad credit records. Work on your credit, and it will help you enjoy financial stability.

Utilize IRS Tax assistance center

Sometimes you may be making the wrong decisions when filing for taxes. There are free resources such as the IRS tax center, where you can get training on the right skills you can follow to start making money in the process. 

The trainers will offer you the right skills to inform the financial decisions you will make. For instance, there is a need to develop a habit of investing in your retirement to avoid cases where you will stress your kids when you are old.

Get advice from financial experts.

There are some things you are not doing well. For instance, you may have developed poor money management practices. You can avoid the wrong decision you are making by coming up with the right financial advice. 

The experts will teach you the right measures that you can take to achieve great success in your career. For example, if you would like to invest, the experts will offer you advice on the right areas where you will advise. 

Many for-purpose organizations provide free-to-low-cost financial advice and coaching. You will likely make money and break the intergenerational poverty cycle if you can advise in the right ventures.

Cause of generational/ intergenerational poverty in the US

Millions of people face intergenerational poverty in the United States. According to a recent study,  17 percent of whites who were born in the lowest income category between 1942 and 1972 remained there as adults, while 42 percent of African-Americans did so

The way you deal with money can lead to generational poverty; it is essential to develop the right measures and skills to overcome poverty. 

Knowing the real cause of poverty in your community will be a big step toward developing policies that will contribute to overcoming poverty. 

Here are some of the steps that people can take to overcome the poverty cycle:

Inadequate healthcare

Some people have ended up with chronic diseases that ended up draining their savings. When people suffer from lifestyle-related illnesses because the cost of health care is high, they tend to enter into poverty. 

Their kids will try to pay for their medical expenses, making them fail to invest in their future. The cost of health care in the United States is high compared to several other developed countries. 

The issue has been affecting several families trying to get out of the cycle of poverty. There is a need for the government to develop policies that can lower the cost of health care.

Lack of education

The costs of high-quality education in the united states are high. Top universities and colleges in the country charge high fees that cannot be affordable to most of its citizens.

Poor Americans can get out of poverty by acquiring the right education and skills. If the availability of top-quality education is not accessible to all people, they cannot access top-quality education that can contribute to getting rid of poverty. 

They tend to suffer when they cannot access health care services.

Not owning assets

Some people do not own assets due to their mindset. For example, some families do not invest in their future due to poor money arrangement practices. If you do not have assets such as real estate investment, then you will not make money in the long run. 

Failure to make money can lead to the cycle of poverty. You need to make efforts and ensure you acquire assets that can support the family to make money in the coming generations.

Lack of enough social protection

The government should come up with social protection measures. Sometimes the levels of social protection available are not enough. 

When people are not covered fully by the available social protection, they lack the necessary protection required to stay in good financial health. 

For example, some families have elderly who need extra care. They spend too much money and time taking care of the elderly. The process leads to poverty because the younger generation cannot work to the maximum and avail of the services.

Discrimination in workplaces

Some people end up being discriminated against in the workplace. For example, the rate of women in high-paying executive jobs in the United States is lower than their male counterparts. When people are unable to access high-paying jobs, there is a tendency where they will have to struggle to deal with generational poverty issues.

Intergenerational poverty amongst Caucasians

In the United States, the international poverty rate among Caucasians is low. From research, more than 50% of the Caucasians in the United States are financially healthy. It is unlike the Hispanics and African Americans who face high poverty levels.

Intergenerational poverty amongst African Americans

Only 23% of African Americans are financially healthy. Most of them are financially unhealthy due to the poverty cycles that run in their families. They are less likely to acquire assets due to several factors that affect their lives. About 77% fall under the generational poverty class.

Intergenerational poverty amongst Hispanics

Research shows that most Hispanics are financially unhealthy. About 22% of Hispanic families are financially healthy. More than 78% are in the Generational Poverty cycle. They need to work hard to overcome the financial challenges.

How American economic policies help one group, not the other, provide ways to fix intergenerational poverty

Several economic policies have contributed to the high number of the vicious cycle of poverty. They include.

Redlining

The discriminatory practice where some communities are denied financial services due to being considered hazardous to investment has affected many people. 

People are unable to access capital and hence fall into the effects of poverty. Some communities have practices leading to a lack of mortgage and other financial services.

 Through redlining practice, the affected communities were denied credit facilities making it hard for them to access mortgages and assets. Lack of assets leads to intergenerational poverty.

GI Bill

The bill was passed in 1944. The law birthed the American middle-class.   It aimed at helping veterans access funds to cover their family’s graduate school, college, and training programs fees. 

The bill has been of great help in helping qualifying families access affordable education that is crucial in making them break the cycle of poverty in their families. Most African-American veterans could not access the benefits of the GI Bill due to racism.

Veterans and their families benefited greatly from the GI Bill. Those who did not fall under the category of veterans were unable to access affordable education, making them lack the skills to pursue well-paying jobs. Lack of quality education in return leads to intergenerational poverty in some citizens.

Mentorship opportunities

Access to mentorship opportunities is not widely accessible in the country. Some people need mentorship from where they can come up with the right skills to grow their wealth. Some people lack the skills, and it ends up affecting their lives.