On the surface, managing your money seems all about the numbers. It’s about your income, how much you can save and your net worth. While all of those are integral to managing your finances, there could be something else sabotaging the way you manage and earn money: a scarcity mindset.
Let’s explore how a money scarcity mindset can prevent you from becoming financially secure and even wealthy. Plus, we’ll offer tips for establishing an abundant mindset.
What is a scarcity mindset?
A scarcity mindset refers to a state of thinking that there is never enough. Someone with a scarcity mentality might feel that opportunities and money are all finite and scarce. Rather than focusing on potential and abundance, people with a scarcity mindset are overly focused on what is lacking and tend to have a fixed mindset.
A scarcity mindset creates anxiety around resources, giving you a feeling that there isn’t enough. This can affect your mental health, behavior and your finances.
How scarcity mindset can affect you
A money scarcity mindset isn’t healthy. It can lead to becoming consumed and overly focused on what you perceive to be limited resources. You might think there is never enough money and you’ll always be broke.
You might feel like buying anything except necessities is indulgent and over-the-top. You might stay in a low-paying job because it feels safe and comfortable rather than trying to get a better-paying job because change is risky. You might not tip or tip poorly as you think you can’t swing it or only buy things when they’re on sale.
That is a money scarcity mindset at work. You think that money and opportunities are finite, so parting with your money can cause anxiety or fear.
Of course, there’s a fine line between being money smart and making unhealthy decisions due to a scarcity mentality. It doesn’t hurt to look for sales or use coupons. But if you only use coupons and never buy what you truly want because you “can’t afford it,” it’s likely you’re stuck in scarcity.
If you feel like money is lacking and get envious of others with material resources, you are dealing with a scarcity mindset.
Where a scarcity mindset comes from
You may have picked up a scarcity mindset from your family, friends, or cultural conditioning. If you grew up with limited resources, that’s all you knew and it shaped your worldview. If you have always been a low-income earner, you learned you had to be super frugal and couldn’t see a way out. Even when it comes to marketing and sales, scarcity influences and encourages us.
Consider how often you have seen, “Buy now, only one day left!” or “20% off, limited time only!”. In that case, the scarcity is designed to encourage you to buy now or miss out forever.
All of these messages from our family, friends, culture, and society can help shape a scarcity mindset. They reinforce the idea that there isn’t enough and that resources must be hoarded.
Steps to shift into an abundance mindset
A scarcity mindset can result in penny-pinching, unhappiness, and anxiety and lead to limited opportunities. When you shift to an abundance mindset, you’re more generous, and you have the ability to spend more but also earn more because you know there is always more out there.
Your relationship with money is better, and you can save and spend money with ease. You know there are more opportunities and money for everyone, so don’t worry if someone has more.
To shift your mindset, turn your triggering thoughts around. Let’s say you see a wealthy person and feel like you’ll never have that or enough money. Instead of spiraling into thoughts that aren’t useful for you, stop. Replace that thought and think of the possibility. If they can do it, that means it’s possible, so why not for you?
You also want to change your language to rewire your brain to think from a new perspective.
Instead of saying, “I can’t afford that,” say, “I have other priorities right now,” or “That’s not in the budget.” This shift goes from a fixed type of thinking based on lack to one that gives you agency and freedom.
Eliminate the words “always” and “never” regarding how you think and speak about money. So no more “I’ll always be broke” or “I’ll never be rich.”
There is a quote by Henry Ford that states, “Whether you think you can, or you think you can’t–you’re right.” In other words, your mindset and beliefs are super important in creating your reality and the future you want.
Another thing you can do is to write a list of everything that you have right now. Do you have shelter? Do you have access to food and clean water? Be grateful for what you have at this moment.
When you focus on what you already have and learn to practice gratitude you realize you already have enough. Remember, “enough” is a feeling, not necessarily a number or based on material possessions. By cultivating an abundance mindset by practicing gratitude, recognizing opportunity, and seeing potential you can attract wealth and have more money.
Final thoughts
If you have a scarcity mindset, don’t beat yourself up or think it’s a life sentence. It’s not easy to change your perspective, but it’s possible. Start by changing your language, which will then change your thoughts and beliefs. Be mindful of what you already have and trust that more money and opportunities are always available to you.
