What happens to our minds when we feel we do not have enough? How does a scarcity mindset shape our thoughts and behaviours and ultimately impact our finances?
Scarcity thinking, the thinking that all resources are finite and not enough, more often than not co-exists with a fear of depletion. We see this as meaning potentially painful trade-offs. This focus on lack depletes our will power which means we are less capable of making positive choices around our financial goals. A scarcity mindset at its very core challenges our capacity for self-control.
The scarcity mindset further directs our focus to immediate gratification. Its easier to imagine the pleasurable outcome now than it is at some obscure future point. As a result the concept of saving and building towards future goals is incongruent with this mindset.
This concept of lack drives the thought that there isn’t anything more coming and that we don’t have the capability to earn more. This keeps us focused very narrowly on the now and detracts from our ability to see opportunities. This narrow thinking makes us feel unworthy of wealth and success. It leads to detrimental decision making, not opening bills, avoiding checking our credit card and bank balances and not taking responsibility for our financial circumstances.
The thing about a scarcity mindset is that it is self-affirming in that the actions we take as a result of thinking this way results effectively in our lives BEING this way.
Challenging our scarcity mindset
A scarcity mindset is oftentimes passed on from generation to generation and has been built up on many years of affirmations through seeing its reality play out by prior generations similar mindsets. It becomes our truth based on our experiences.
The first step in unravelling what has become our own personal dogma is to identify it. Take note of when it pops up. Typical thoughts may be, “I will never be rich”, “Money doesn’t grow on trees” or the definitively limiting, “I have tried everything and can’t make money”.
Secondly, change our language. How much more empowering is “I have other priorities first” or “I will find opportunities to earn that money” as opposed to “I can’t afford that”. Language, the simple tool to switch from a fixed to a growth mindset.
Thirdly, stop with the comparisons. We are all own our journey and nobody is fully privy to anyone else story. We need to stop letting the fear of missing out, not fitting in or looking bad cause us to take actions which keep us in the situation supportive of our limiting mindset. That means not spending what we don’t have on things in the hope they will make us look good, fix a limiting belief we have about ourselves or influence others views of our worth. The result of this self-sabotaging action is to manifest our scarcity mindset.
Fourth, celebrate and acknowledge the achievements of others. When we operate from a scarcity mindset we apply this thinking to all areas of our lives. Another person’s success means less for us. It means we are not gifted in the looks or intelligence department, we don’t have access to the same opportunities or whatever other talents we consider too scarce to have been bestowed upon us. Rather than seeing this as a competition for limited resources that we are the underdog on, we should see it as an inspiration for what we too could do.
Finally, take action. The most effective cure for all mindset matters is to take action. Decide today to start building wealth. Identify one small action that can be taken immediately, open a savings account and deposit your first amount. Get all your financial documents filed and in good order. Download your credit card and bank statements and track your income and outflows. See what money is coming into your life and track where it is going. The simplest action step that takes you away from your scarcity mindset, is the first step to freedom.