It’s a psychological state where you feel
you don’t have enough. That’s not just money, it can be time or other resources.
Having a scarcity mindset shrinks your vision. It makes you focus on the here and now, not the bigger picture.
This means we focus on short-term survival at the expense of long-term planning and decision-making. How am I going to have enough money to pay all my bills this week?
Headlines full of economic doom don’t help, nor does having people around you who see the negative.
Kiwis can be particularly prone to a scarcity mindset thanks to our No 8 wire/make-do-and-mend culture, which can slide into scarcity thinking.
I am guilty as charged on the “make-do-and-mend” mentality, and I’m sure many readers are as well.
The opposite of a scarcity mindset is an abundance mindset, where the world is a place of opportunity, albeit with obstacles. Research shows many benefits of thinking this way, including better mental health and decision-making and enhanced relationships.
The idea that there’s never enough, and there never will be, leads to poor financial decisions.
What’s more, if we’re focused on what we can’t have, it can get transformed in our minds to a “need” when it’s just a “want”.
We may well buy it on Afterpay, or just buy it on the credit card or overdraft, displacing real needs into the unobtainable.
Unfortunately, the scarcity mindset is often drilled into children by the time they hit adulthood by parents who think the same way.
I saw the reverse in practice with friends who, although they had lower earnings than most in their neighbourhood, focused consciously on what they had, not what they didn’t. The children saw opportunities, not scarcity.
Like any deep-seated psychological problem, identifying a scarcity mindset and breaking out of it isn’t easy.
Canadian researcher Dr Robyne Hanley-Dafoe recommends getting started by recognising and acknowledging that you fall into scarcity thinking. Some navel-gazing and taking a metaphorical truth pill is needed for that.
Like many limiting beliefs, it’s important to challenge those thoughts around scarcity and reframe them when they pop into your brain.
“I don’t have enough money” can be reframed into “what are my priorities” and/or “how can I adjust my budget to release money for [whatever is important]”.
Like many obstacles in life, practising gratitude can help overcome the scarcity mentality. That’s being grateful for what you have in life. And what you haven’t isn’t simply things you buy.
You can be grateful for relationships, work, the environment you live in and many other positives. Be grateful for the big and the small. Keeping a gratitude diary boosts this practice.
A scarcity mindset gets worse, sadly, by engaging with too much social media and/or a constant diet of negative news.
Social media influencers in particular set unachievable perceptions of what success is and what we need to own and look like, leaving followers feeling inadequate.
Not everyone can or wants to give up social media, of course. Unfollowing unhelpful individuals and channels can be a real bonus, however.
Who cares what a self-absorbed pseudo-celebrity is pushing to make a fast buck? Or how many cheap and nasty dresses they buy on Temu?
The people we spend time with can greatly influence our mindset for the better if we choose our circle wisely.
If you can, surround yourself with positive influences to boost your mindset. Shed the negative. Or at least set up boundaries by telling them you’re not interested in negativity when they bring up such subjects.
Find people who are abundance-minded and will encourage, uplift and inspire you. That could be by joining the right personal finance group, personal development group or related online groups where positive people hang out.
Or join professional networks and traditional organisations such as Rotary and Toastmasters that tend to attract people who think big.
And finally, make sure you celebrate the success of others. It might be galling to see your 20-something-year-old mate buy a house, when you think it’s impossible.
Celebrating with them will help you think: “why not me?”, which is the start of an abundance mindset.
