Mindset is so important, especially when it comes to our finances! How you think about money can affect your spending and saving habits. Determining what type of mindset you have can help you work on achieving your goals. In particular, the two big mindsets when it comes to your financial outlook are having a scarcity mindset or having an abundance mindset.
The idea of having a scarcity mindset might sound like it’s great for pushing yourself to save, but in reality, it can have a number of harmful effects on your mental health. Let’s take a closer look at what it means to have a scarcity mindset as well as how you can transition into a more abundant way of thinking.
What is a scarcity mindset?
A scarcity mindset is when you view the world as not having enough to go around. In turn, you feel like you never have enough. You might even start asking yourself, “why is this happening to me?”
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While scarcity can help you have a hyper-focus on specific goals when it comes to money, it comes at the cost of ignoring all your other goals and needs. You might begin to focus on immediate, urgent needs instead of the bigger picture. This leads to unhappiness and anxiety.
This relates to the poor vs rich mindset. Rich people are wealthy not only in material items but in mental comfort. People stuck with a poor mindset, on the other hand, are trapped in the cycle of feeling like they are facing impossible challenges that have no way out.
The difference between a scarcity vs abundance mindset
The differences between a scarcity vs abundance mindset all come down to how you view the world. It also comes down to how you manage your thoughts. An abundance mindset is when you have a high level of personal worth and security. You feel like you have enough. Rather than focusing on what you don’t have, you think about the things you already have in front of you.
On the other hand, when you constantly have a scarcity mindset nothing is ever enough and you never have a chance to relax. That’s why we heartily recommend adjusting the way you think– but we’ll go over that more below.
How to determine if you have a scarcity mindset
So, how can you tell if you have a scarcity mentality? If you experience any of these signs, you may be trapped in a scarcity mindset.
1. You’re always worrying about money
Certainly, money is an important concern, but is it all you think about? If you find your financial shortcomings are taking over your life, you may need a reset. Having negative emotions about your finances can negatively affect your health by causing financial insecurity, anxiety, and fear.
We get it – with the average American $90,460 in debt, it’s easy to always be thinking about money problems. But it’s important for you to try to step outside of this.
2. You are always comparing yourself to others
Life is not a board game! You shouldn’t always be trying to one-up your friends or acquaintances. If you feel like you need to keep achieving more and more to keep up, it’s a definite sign of a scarcity mindset.
3. You find it hard to be happy for others
Along the same lines, you should be happy for your friends when they achieve something big like scoring a new job or paying off their house. If your first emotion is jealousy, that means you’re thinking in a scarcity mentality.
4. You feel like you’ve beat everyone else when you have success
Having your own success is great! That said, it shouldn’t be about beating others or getting revenge on people you feel have wronged you in the past. Don’t let these things fuel your attempts at financial freedom.
5. You are negative about why you can’t reach your goals
Those in a scarcity mindset typically have a negative outlook on life. They’ll feel like everything is conspiring against them and nothing will ever change. It’s not their fault they can’t be successful, but rather, the crooked system. Or the cheating coworker. Or the volatile market. And so on and so on.
6. You overindulge or under indulge frequently
Do you frequently overindulge because you feel like you need something positive in your life? Or maybe you under indulge because you feel like you need to save, save, save. Scarcity is scientifically proven to affect behavior and decision-making, leading to these bad purchasing habits.
So before you settle into that minimalist lifestyle, make sure you’re doing it because it’s the right choice for you, not because you feel desperate to pile up every last penny.
How to overcome a scarcity mindset
How did you do with the above signs? Think you’re stuck in a scarcity mentality? Don’t worry, there’s plenty you can do to change that. Try out some of the steps below to see if they help you become more positive.
1. Think about how much you already have
Your money mindset doesn’t always have to be dismal. Even if you just have a few hundred in savings, that’s better than nothing! Rather than focusing on how much further you have to go, think about how far you’ve come. Celebrate those little achievements every step of the way.
2. Consider the possibilities in your life
Those in a scarcity mindset tend to focus only on one possibility or outcome. We put so much effort into this one goal that everything else falls by the wayside. Get out of that funk by being more open about the direction your life can head!
You may want to work on this by creating an intentional living practice. With intentional living, you tune in to your goals and values. That way, you’ll make choices not just on how you feel pressured to act, but what’s truly best for you.
3. Find more gratitude for the small things
Stress less, be thankful more. Research shows that gratitude can increase well-being and improve life satisfaction. So why stew over why things aren’t going your way? Gratitude is all about feeling appreciation for what is valuable and meaningful to yourself.
4. Spend time with others who have an abundance mindset
Did you know that research shows we mirror the habits of our friends and family? If that’s the case, you need to be spending your time with others who have an abundance mindset. Shift your circle of influence to find people who have a good balance of financial comfort and success. Their good vibes are sure to wear off on you!
5. Find a lesson in your perceived failures
First things first – you probably didn’t fail, at least not as bad as you may think. Even if you make one of these worst financial decisions, you can recover. Every perceived failure is just an opportunity to learn. Find the lesson in every situation so you can become a better person, inside and out.
6. Trust in your self-worth
Let’s be clear about one thing – you are invaluable! Don’t forget that. It’s easy to slip into patterns of thought where you think you aren’t worth anything. That’s even easier to believe if the numbers in your bank account agree. But these feelings aren’t real.
Take a step back and look at the situation from a different light. You deserve to achieve your goals as well as be happy with your life. You don’t have to choose one or the other. Everyone is worthy – even you!
Get rid of your scarcity mentality for good
Remember, money can’t buy happiness. Scarcity isn’t always the best for a comfortable financial life. Think abundantly, and financial success will follow. Need even more help? Try out our completely free money mindset course so you can work on creating a plan for your finances that makes you happy and puts you in a good place mentally.