What is Cross-Class Growth?

As an insight-oriented therapist, I approach my work with clients from the perspective of most of understanding their backgrounds and past experiences and how those experiences shape the way they see the world and their place in it. These insights often shed light for my clients on how they became who they are and why they believe what they believe. Also, knowing where a lot of these internalized messages come from allows us to place some of the automatic thoughts that show up into context and reframe them in an effort to change behavior.

Many of my financial therapy clients experience what I like to refer to as Cross-Class Growth, meaning that in childhood, their families of origin were at a lower socioeconomic status than they find themselves in their adult lives. It always stands out to me, no matter how many money stories I hear, that growing up low-income can have various effects on a person. Cross-class growth can shape the way we view ourselves, others, and our relationships with money and can significantly show up in our financial behaviors.

Here are some common themes that can show up for individuals who grew up low income: 

Insecurity/Scarcity Mindset:

Scarcity mindset refers to the pervasive feeling of not having enough. It makes sense that for individuals who experienced financial lack growing up, this feeling of insufficiency would linger. Further, this consistent feeling of lack may grow into a belief that opportunities, resources, and success are limited.

This belief impacts financial and relational behavior in significant ways. For example, those who believe resources are limited might hold on tight to the resources they have for fear those resources may one day dwindle. This leads to risk aversion, the feeling that resources and opportunities need to be fiercely protected and guarded, lack of generosity, and potentially feelings of defeated or threat by others’ successes due to the belief that the people who succeed take the opportunity for success away from others.  

Scarcity mindset might show up in the wealth advisory relationship as a client’s preoccupation with saving, anxiety around approaching retirement, or significant reactivity to a volatile market. As a wealth management professional, it’s important to recognize when these things come up and help clients by reassuring and educating clients about market volatility and their assets, and normalizing client’s feelings of fear and anxiety around their resources.

Overspending/”Frivolous” Spending:

I work a lot with high achieving women of color and I often hear my clients say things like “I didn’t have resources or financial freedom before, so now that I do have more resources and flexibility, I’m going to treat myself because I work hard and I deserve nice things.”

It could be easy to make the assumption that these people have a problem with spending or impulse control, but in these cases where these clients have experienced cross-class growth, most of the time it’s less about spending frivolously and more about seeking safety and stability. What they’re actually saying covertly is “I didn’t have clothes that fit or a home that felt safe growing up, so now that I can afford to spend my money and now that I have control of my surroundings in a way I didn’t growing up, I’m going to make sure my home is the safest place and my clothes are the most stylish and up to date so I never have to feel that level of insecurity again” In these cases, overspending is more of an attempt to create a sense of safety rather than overspending for the sake of overspending. For wealth management professionals, it’s important to be mindful of the ways safety and security are contributing to clients’ overspending, and be intentional about creating space in the advisory relationship in which the client can share their underlying feelings around spending without fear of shame or judgement.

Which leads to the final theme I often notice…

Trauma Response from Chronic Stress:

The biggest and probably most surprising theme I notice in working with individuals who experience cross class growth is the various trauma responses resulting from chronic financial stress, lack of control, and lack of safety. Poverty comes with an inherent sense of insecurity and lack of safety. That is, when a person consistently has their basic needs unmet (e.g., food insecurity, eviction, insufficient clothing) these experiences register in the brain as threats, specifically stressors that activate the fight, flight, or freeze response within the body.

This experience of consistent lack of safety and security over time can manifest in many ways for individuals, but I think the most insidious manifestation is physiological. The body is not meant to exist in crisis mode constantly and the areas of the brain related to survival are in overdrive, leading to financial behavior that is rooted in trauma responses even after a level of safety and security is established. Some specific examples include overspending in an effort to self-soothe as I mentioned before, or underspending fueled by the anxiety of running out or not having enough as I mentioned with the scarcity mindset.

As a wealth management professional, especially if you work with wealth creators, you may notice some of these themes showing up in your clients. It's important for financial advisors, planners, and all wealth management professionals to be mindful of how cross-class growth can show up in wealth creators, so that you can best serve your clients holistically, tending not only to their financial needs, but their emotional and relational concerns as well.

For more information, check out this video essay from the financial diet where I share more insights on cross-class growth and growing up low-income.