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How a Scarcity Mindset Affects Your Finances

Jessica Willens Headshot

Jessica Willens


Summary: In this article, learn how scarcity mindset can hold you back from becoming financially secure, and even wealthy. Also learn steps to create a more abundant mindset for yourself.

On the surface, managing your money seems all about the numbers. It’s about your income, how much you’re able to save, and your net worth. While all of those are integral to managing your personal finances, there could be something else sabotaging the way you manage and earn money: a scarcity 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 an anxiety around resources, giving you a feeling that there isn’t enough. This can affect your mental health, behavior, as well as your finances.

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How scarcity mindset can affect you

A scarcity mindset with money isn’t very healthy as you become consumed and overly focused on what you perceive to be limited resources. You might think there is never enough money and that 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 because you feel you can’t swing it or only buy things when they’re on sale. 

That is a 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 frugal 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 know and it will shape your worldview. If you have always been a low-income earner, you learned you had to be super frugal and haven’t been able to see a way out. Even when it comes to marketing and sales, we are influenced and encouraged by scarcity. 

Consider how many times you’ve 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. It reinforces the idea 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, anxiety, and lead to limited opportunities. When you shift to an abundance mindset, you’re more generous, 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 save and spend money with ease. You know there are more opportunities and money out there for everyone, so you don’t worry if someone has more. 

In order 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 possibility. Think if they can do it, that means it’s possible, so why not for you? 

You also want to change your language so you can 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” when it comes to the way 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 do have in 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.

Bottom line

If you have a scarcity mindset, don’t beat yourself up or think that it’s a life sentence. It’s not easy to change your mindset, 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 there is always more money and opportunities available to you. 

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