There’s a finding from Harvard that stopped me when I first came across it. Sendhil Mullainathan and his research partner Eldar Shafir at Princeton discovered that when people living in poverty were asked to think about a major unexpected expense, their cognitive performance dropped by the equivalent of about 14 IQ points. Not because they were less intelligent. Because scarcity itself was hijacking their mental bandwidth. The brain, it turns out, doesn’t just respond to not having enough. It rewires around it.
I know this from the inside. Not the extreme version, but close enough to recognise the pattern. You grow up watching money leave faster than it comes in. You learn the sound of a parent’s voice when a bill arrives. You absorb, without anyone teaching you, that the ground beneath you can shift at any time. And then, years later, you build something. You save. You earn. Your bank account finally looks like something you once dreamed about.
And you wait for the feeling. The feeling of being wealthy. Of being safe. Of having made it. It doesn’t come. What comes instead is a quieter version of the same vigilance you grew up with. The numbers are different. The dread is the same.
The brain that learned scarcity
Sendhil Mullainathan at Harvard and Eldar Shafir at Princeton spent years studying what scarcity does to the human mind. Their landmark research, published in Science, found that poverty doesn’t just limit what people can buy. It impedes cognitive function itself.
In one study, they tested shoppers at a New Jersey mall. Rich and poor participants performed equally on cognitive tests when thinking about a small financial problem. But when the hypothetical expense jumped to $1,500, the poorer participants’ cognitive performance dropped by the equivalent of about 14 IQ points. That’s more than the cognitive hit you take from pulling an all-nighter.
The critical insight wasn’t that poor people are less capable. It’s that the experience of scarcity hijacks mental bandwidth. The brain enters what Mullainathan and Shafir call “tunneling,” a narrowed cognitive state where immediate financial concerns crowd out everything else: long-term planning, emotional regulation, the ability to think clearly about non-urgent decisions.
And here’s what matters for the question of why wealthy people who grew up poor don’t feel wealthy. That tunneling doesn’t require active poverty to persist. It was learned. The neural pathways were laid down during the years when the margin for error was zero. And pathways that deep don’t just dissolve because the bank balance changes.
The body keeps the score (on your finances too)
A study published in PNAS tracked children from rural, low-income families in upstate New York from age nine into their mid-twenties. The researchers found that childhood poverty predicted elevated psychological distress in adulthood, including higher levels of helplessness and chronic physiological stress, measured through something called allostatic load, which is essentially the wear and tear on the body from sustained stress.
The critical finding was this: these effects held regardless of the person’s adult financial circumstances. It didn’t matter if they’d escaped poverty. The body had already encoded it.
Think about what that means. You can change your income. You can change your postcode. You can change your lifestyle. But the nervous system that was calibrated during childhood scarcity keeps running its old programme. It keeps scanning for the threat that used to be real and now mostly isn’t, except the body doesn’t believe it.
Research from the Joseph Rowntree Foundation put it clearly: childhood poverty produces genetic adaptation oriented toward short-term survival. Children raised in low socioeconomic environments show consistent reductions in cognitive performance, particularly in areas like attention, planning, and decision-making. The scarcity mindset becomes a lens, not a temporary state.
Hypervigilance isn’t anxiety. It’s competence that forgot to switch off.
There’s an important distinction that gets lost in most conversations about money and mental health.
The person who grew up with nothing and now checks their bank balance three times before buying groceries isn’t irrational. They’re running a survival programme that once kept the lights on. The constant mental arithmetic, the contingency planning, the inability to enjoy a purchase without calculating its downstream effects, none of that is dysfunction. It’s an adaptation to an environment where letting your guard down meant catastrophe.
Research on financial worries and psychological distress has found that perceived financial hardship is more strongly associated with mental health outcomes than objective financial measures. In other words, it’s not how much money you have. It’s how much money you feel you have. And if your baseline was set during years of genuine scarcity, “enough” never quite registers.
This is the gap between wealthy and temporarily safe.
Wealthy is a state of being. It means the system has relaxed. The scanning has stopped. There’s trust that what you have will hold.
Temporarily safe is a holding pattern. The resources are there, but the body hasn’t updated. There’s a quiet, persistent sense that this could all be taken away, because once, it was.
The slack problem
Mullainathan and Shafir introduced a concept they call “slack,” the buffer of extra resources, whether money, time, or cognitive capacity, that sits between you and disaster. People with slack can absorb a shock. A $1,500 car repair is annoying. Without slack, that same repair is a crisis that cascades into missed rent, skipped meals, and impossible decisions.
The APA’s coverage of Shafir’s work highlighted that scarcity doesn’t just eliminate slack in the moment. It trains the brain to expect a world without slack, permanently. You learn to operate as if the buffer doesn’t exist even when it does.
I think about this every time I catch myself running mental calculations about expenses that are, by any reasonable measure, fine. I have a business. I have savings. I live in Saigon where the cost of living is manageable. And still, there’s a part of me that treats every dollar like the last in the account. Not because I’m poor. Because I remember what it felt like to wonder.
In Buddhism, there’s a teaching about saṃkhāra, mental formations. The patterns of perception that shape how we experience reality before we’re even conscious of them. Scarcity is a samkhara. It’s not a thought you think. It’s a filter through which all thoughts pass. And it colours everything: how you spend, how you save, how you celebrate, how you rest.
Or more accurately, how you don’t rest.
Why this matters beyond individual psychology
There’s a broader consequence here that rarely gets discussed. People who grew up poor and became successful are often held up as proof that the system works. “Look, they made it.” But the research tells a different story. Many of those people are carrying a physiological and psychological burden that their bank accounts can’t address.
The anxiety doesn’t look like anxiety because it’s been dressed up as discipline. The hypervigilance doesn’t look like hypervigilance because it presents as good financial sense. The inability to relax around money doesn’t look like a problem because in a culture that worships hustle, it looks like a virtue.
But underneath all that productive tension is a nervous system that’s still waiting for the other shoe to drop.
The Urban Institute’s research on poverty and mental health described how the constant anxiety of scarcity burns up cognitive capacity that could otherwise be used for productive planning and decision-making. What’s less discussed is that this same dynamic plays out in people who’ve escaped material poverty but carry its psychological fingerprint.
They’re the CEO who still hoards condiment packets. The entrepreneur who can’t bring themselves to take a holiday without checking revenue numbers daily. The parent who gives their children everything they didn’t have and still feels it’s not enough, because nothing ever felt like enough.
Learning to feel wealthy
I don’t have this figured out. I’m still somewhere in the middle, running the old software while building new systems. But the research points to a few things that seem to matter.
First, recognising the distinction between your circumstances and your nervous system. Your bank account may say you’re fine. Your body may disagree. Both things can be true, and understanding that gap is the beginning of working with it rather than being controlled by it.
Second, understanding that financial worry lives in the body, not just the mind. The research on childhood financial hardship and adult mental health found that the accumulation of financial stress across a lifetime has measurable effects on depression and anxiety. The intervention isn’t another spreadsheet. It’s teaching the nervous system that the emergency has passed.
Third, and this is the one I keep coming back to in my meditation practice: noticing the moment of “enough” without immediately replacing it with the next calculation. In the Pali texts, there’s a concept called santosa, contentment. Not complacency. Not ignoring genuine risk. Just the capacity to register that right now, in this moment, there is enough.
That’s not a financial achievement. It’s a psychological one. And for those of us who grew up learning that enough was always temporary, it might be the hardest thing we ever learn to feel.
The difference
Honestly, here’s the thing that sits with me. We congratulate people for “making it” all the time. We point to the savings account, the house, the business, and we say the story worked out. But nobody asks whether the person inside the success story has actually arrived, or whether they’re just standing in a nicer room still listening for the sound of the floor giving way.
I don’t know when the nervous system catches up. I’m not sure it does. And I wonder sometimes if that’s the part we should be talking about — not how people escape poverty, but whether poverty ever fully agrees to let them go.
