MEMPHIS, Tenn. — Generational poverty can be a vicious cycle that repeats itself from one family to the next.
In Memphis, the overall poverty rate is more than 20 percent and childhood poverty is more than 35 percent.
Experts say there are systemic challenges that have made it almost impossible for some families to catch a break.
One of the stories is Dominque Winfrey’s story. Winfrey’s mother had her at 14 years old.
As a child, Winfrey said she didn’t think she was living in poverty, because her reality was the same as many people in her neighborhood.
“Poverty is a thing that I don’t think people wake up and say, ‘I choose to be in poverty today.’ I think poverty is a thing that people say, ‘I’m waking up, I’m fighting every day of my life and I’m looking for a way out but I just don’t know where it is,’” said Winfrey.
Winfrey, who is now an attorney, said she found her way through Repairing the Breach. The free community mentorship program helped her transform from getting kicked out of school to graduating with honors with a new sense of purpose.
“Because you feel like I’m fighting to keep my lights on. I’m fighting to get food. I’m fighting to do this, and at some point, you just get tired, and you just say you know what it is and life is what it’s going to be,” she said. “So, unless you have someone in your corner really pushing you, really saying no it doesn’t have to like, you can do it, backing you up and giving you the support you need like I had, it’s really difficult.”
In the latest poverty report for Memphis, Orange Mound, North Memphis, Nutbush, Parkway Village, Frayser, Raleigh and South Memphis make up some of the most impoverished areas in the city.
The same report shows Latinos have the highest poverty rate in the city of Memphis with 29 percent, followed by black people at 26 percent and white people at 9 percent.
“The base of wealth in this country is the ownership of property, and so when people weren’t allowed to own property or they were considered property in our constitution even, it’s hard to move beyond that even generationally,” said Roshun Austin, President and CEO of The Works, Inc. in South Memphis.
Austin said institutional racism is at the root of generational poverty along with limited access to financial institutions.
But she said homeownership by itself won’t pull a family out of poverty.
“Homeownership for African Americans hasn’t proven to be wealth building,” said Austin. “The example is our zip code 38106, where we are located, has the most underwater mortgages. That is not wealth building if I owe more on the house than its valued today – i’m in the hole, and that does not build wealth for my children.”
But Austin said there are steps any family can take to build wealth. She said it starts with changing your relationship with money.
“If my daughter got $5 when she was 8, we go to Target (and) she is trying to figure out how do I absolutely spend every penny of the $5 versus oh I could spend a $1 here and I’ll have 4 for the next time to add to some additional money and I can delay,” said Austin.
She said the same concept applies to adults. Austin said her clients often use their gross salary as baseline for major recurring expenses like housing.
But she said a more accurate figure would be your net income.
“I’ll say let me see your bank statements, so I can really see what you spend. And I’ll say these are your food costs. Let’s subtract that from the net. What are your transportation costs? Do you have debt? So I’m going to look at the debt and the non-debt expenses - all expenses,” said Austin.
Austin said building wealth starts with small steps and small amounts. It’s a practice she preaches with her own college aged daughter.
"I said you owe me 10 percent and she’s like “what?” You owe me 10 percent. And guess what I do with the 10 percent? I put it in a savings account for us so when she comes out and she’s ready to move on her own, if she chooses to purchase a home, she had her down payment that she created giving me 10 percent, but I put it aside for her," said Austin. "Because I intend for my daughter to be truly be wealthier than I am, than what my parents were, my grandparents were. So I’m passing not only the actual cash on to her, I’m passing the information.
It’s similar priceless financial information Winfrey is using in her own way.
She’s buying a home, getting life insurance, paying off her debt now and taking steps to break the cycle with her generation.
“For me, that’s wealth to be able to pass down those things through my bloodline to help those who are coming behind me to be better off,” said Winfrey.
Austin said once you have some wealth, you have to protect it.
She encourages people at any income level to create wills and trust documents as early as you can before you need them.
Austin said this protects your investments, like a home or savings, and ensures this wealth is passed down to your loved ones.