When it comes to effects of lead poisoning from the drinking water in Flint, MI, a state nurse was reported to infamously remark that the damage from Flint water was only the loss of “a few IQ points”. At the 10ppb concentration that caused great concern last fall, an estimated 25% of babies could have lead in blood levels above the 5ug/dl recommended maximum, and data suggests a loss of 7 IQ points as lead levels in blood increase from 1 to 10ug/dl, prompting concerns that there is no safe level of lead in water for young children.
However, Sendhil Mullainathan and Eldar Shafir argue in Scarcity: The New Science of Having Less and How It Defines Our Lives that the condition of not having enough money can have an even greater impact. In a series of experiments, people were given IQ and executive function tests while being asked to consider scenarios where they wouldn’t have enough money for a car repair. People who felt money scarcity performed 10-15 points worse in IQ tests. And, like lead poisoning, the impacts of money scarcity go beyond just IQ. Experiments showed that executive function- the ability to control impulses- suffered as well. People under financial stress are not only impeded in thinking through situations, but more likely to make hasty, unwise, decisions.
So what is the solution? For lead in water- which can occur in any home downstream from lead supply lines- the short term solutions are either bottled water or filtered water. Longer term, cities are replacing their old water lines, but this is a slow and expensive proposition.
For money scarcity, the surest solution is to create what Mullainathan and Shafir call “slack”, the combination of an excess of income over expense and savings that can cover emergency monetary needs. Most financial planners recommend six months’ worth of salary as a minimum.
But when money is scarce, how do you come up with this emergency fund? Spendbot was created to help people create and execute a Spend Plan that includes saving (and giving), and then actually follow through on executing that plan. We are working with pilot partners to test the execution part of Spendbot, but the planning and sharing functions are available to use for free today. Visit www.spendbot.com and make your Spend Plan today!