Overspending, debt, and poverty

Abstract

Globally, financial hardship arising from overspending and over-indebtedness, and often leading to poverty, strongly hampers peoples' life satisfaction, well-being, and health. Going beyond the immediate economic issues, psychology has much to offer to identify potential causes and consequences of financial hardship and interventions on how to handle these problems. Many publications in developmental psychology explore the detrimental impact of financial hardship on children's development, their behavior, health, and their neurological development. Other fields in psychology are focused on the question of how financial hardship affects peoples' economic decisions and economic behavior. Most importantly, recent research has explored the psychological factors that lead to overspending, over-indebtedness, and poverty, and offered possible interventions to fight the poverty trap. The present article reviews recent research on these topics.

Keywords: Child development; Debts; Decision-making; Health; Impulsiveness; Interventions; Overspending; Poverty; Self-control; Violence.