This has in turn led them to excessive borrowing without saving. They are also found not to engage themselves in any program that will help them develop financially. Theories have been raised to explain the above behavior. The first theory figures this to happen due to the poor people being victims of the circumstances of poverty. Poor educational and health systems, low living standards and lack of political representation are among the circumstances that victimize the poor. The second theory focuses on the personal characteristics of the poor where the poor are found to portray characteristics that attribute them to poverty (Watts, 2008). These two theories are built on the fact of the scarcity of resources that affect how people view their financial problems and the decisions that they make. When resources are adequate people will tend to meet their basic expenses with ease, but when they are inadequate, people will have to struggle in order to have them met. Out of this struggling, people will ultimately end up burrowing and emptying their savings. Lack of money, which is the main resource in an economy make needs more insistent and pressing (Annie, 2004).
Neglect to pay attention to some of the major issues in the society has been of concern. A good example is that the poor have been found not be concerned with the maintenance of their homes while they are focusing on more pressing issues to them. The neglected maintenance and repairs on their homes turn out to be the most urgent and major projects that need resources. Attentional neglect is used to shade light on the reason as to why low-income individuals decide to take big loans with high interest rates. The loans taken by these individuals make it easy for them to meet their present needs, but the loan's deferred costs make it difficult for them to meet the expenses incurred in the future (Shurtleff, 2009).
A scarcity of any kind in the economy creates burrowing tendency among individuals without considering the ability to pay.
