The Scarcity Mindset: How It Affects Your Money

Is it ‘affect’ or ‘effect’? If you know a good trick to remember the difference between the two, please let me know because I have to Google it every single time.


Anyways..


Chances are that you or somebody you know has a scarcity mindset around money.


This mindset may take the form of:


  • Excessive frugal spending

  • Shying away from spending money to get a desired result

  • A negative overall attitude towards money

  • Judging other’s spending habits


Unfortunately, our views around money were probably instilled in us from a very young age and it’s difficult to break lifelong viewpoints.


When I was growing up, there was always food on the table, a roof over our head, and a bed to sleep in and I can never thank my parents enough for providing that security.


But we also went on minimal vacations (within driving distance) and never spent money on extravagant things.


The only time I ever really heard my parents talk about money was around the 2008 recession where virtually everyone was concerned about their money.


I didn’t necessarily have a scarcity mindset around money, but I didn’t know how much of it is truly out there and I definitely didn’t know how to get it other than working a 9-5.


The scarcity mindset can stem from an underlying fear that you don’t deserve the money that you have or that once you spend it, it may never come back.


This mindset can be mentally and physically draining and it can affect your ability to earn what you’re truly worth and hold you back from reaching your goals.



Without changing your mindset around money, it will be very difficult to break free from the scarcity mindset.


Here are a few ways to help shift your mindset and get you going in the direction you want to be:



Gain knowledge


Lack of knowledge can play a big factor in your mindset around money.


Our education systems don’t prioritize financial literacy so if you’ve felt as if you aren’t as knowledgeable as you should be, you aren’t alone.


Having an understanding about your money and how it works will help ease the tension and stress around money.


One way you can gain confidence is to develop a financial plan for your future. If you establish your goals and what you want to achieve in life, you can alter your money habits to align with these goals.


Having goals also gives you something to work towards and increases the chances of success.


ALSO READ: 3 Money Mistakes to Avoid in Your 20s



Get Your Money in Order


Getting your money in order can be one of the most relieving feelings financially.


It can feel overwhelming not knowing how much money you have, what debts you have, or not knowing what the future looks like.


Taking some time to dive into your finances and laying everything out may be very revealing (and stressful), but it’ll help you in the long run.


TIP: Begin to pay yourself first. By paying yourself first, you are guaranteeing that some of your money is going to savings and this can help you break free from the scarcity mindset in the future



Visualize


I have a strong belief that visions become reality.


Take some time a few days each month to truly visualize what your ideal life looks like. This will help ensure your actions are consistently aligning with your present goals.


This ideal life doesn’t have to be a giant mansion on the beach or full of extravagant spending.


Your ideal life may consist of being able to attend all your kids sporting events while being able to afford a nice car.


Whatever it may be - it’s your ideal life, nobody else’s.



The Bottom Line


Currently having a scarcity mindset around money doesn’t mean it always has to be that way.


Changing a few daily habits and being aware that your money doesn’t have to control you is the first step in achieving a life of abundance rather than scarcity.


We have many, many years ahead of us, by changing our mindset around money now we’ll be able to live a life full of abundance in the future.





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