Worrying over money ‘causes IQ to drop’

Finding it hard to make ends meet can impoverish the brain and reduce your ability to think, say scientists.

Financial worries tax the brain so much they create a “cognitive deficit” equivalent to a 13-point loss in IQ, a study found.

The problem is distinct from the effects of stress and results from too much “mental bandwidth” being used to fret about money.

Someone overwhelmed with worries about money can suffer a genuine mental handicap, the research shows. This in turn may lead to poor decisions, such as racking up debt, creating even more difficulties in a vicious cycle.

Economics professor Sendhil Mullanathan, from Harvard University in the US, said: “Our results suggest that when you’re poor, money is not the only thing in short supply. Cognitive capacity is also stretched thin.

“That’s not to say that poor people are less intelligent than others. What we show is that the same person experiencing poverty suffers a cognitive deficit, as opposed to when they’re not experiencing poverty.

“What happens is that your effective capacity gets smaller because you have all these other things on your mind. You have less mind to give to everything else.”

Prof Mullanathan’s team carried out experiments in the US and India.

In the first, conducted in a shopping mall in New Jersey, around 400 people were randomly chosen and asked to ponder how they would solve hypothetical financial problems, such as paying for a car repair.

Some problems were easier, that is, cheaper, to sort out than others.

At the same time, the volunteers had to undergo simple computer tests of IQ and mental performance.

They were split into “poor” and “rich” groups based on their income which ranged from $20,000 per year to around $70,000.

The results, reported in the journal Science, show that when the financial problems were not too severe, both groups performed equally well. But when they were forced to consider difficult, costly problems, people with lower incomes had significantly worse scores.

In fact, the effect was so strong that for those generally preoccupied with money, merely thinking about a tricky financial problem led to a 13-point dip in IQ.

On a follow-up visit to rural India, they tested a group of sugar cane farmers who rely on the harvest for 60% of their income.

Since the harvests occur once a year, the farmers are poor before a harvest and rich after it. Given the same tests, they did significantly better after the harvest.

Services to the poor should take account of the mental effect of poverty, for instance by providing simpler forms and making it easier to seek assistance, said Prof Eldar Shafir of Princeton University.

“The poor, who our research suggests are bound to make more mistakes and pay more dearly for errors, inhabit contexts often not designed to help.”