And the frame of reference through which we view money as we get older typically falls into one of two camps: scarcity or abundance.
What is a scarcity mindset?
If you’ll remember correctly from when you learned about supply and demand in school, the definition of
scarcity is “The state of being in short supply.” Those with a scarcity mindset are constantly seeking
more. They may struggle to be happy for the success of others because they view life and money as a
finite pie. If someone else has more, there’s not going to be enough left over for everyone else.
A scarcity mindset causes you to feel like you’re in a constant win-lose scenario and can lead to
catastrophizing thoughts like “I never make the right investment choice” or “I always quit on a savings
goal before it’s finished.” Those with a scarcity mindset believe money is hard to get but could be easily
lost. It encourages a fearful posture that keeps people thinking small about financial potential and wealth
building.
What is an abundance mindset?
Unlike the shortage implied by scarcity, holding an abundance mindset means you believe there’s plenty
to go around: earning potential, wealth, and success are limitless. People with an abundance mindset view change as an opportunity. They put a positive spin on every situation and share openly with others,
knowing what they give will multiply, not take away from what
they have.
Taking these two mindsets toward money, you can probably imagine which one puts you in a defensive
posture and which one enables you to embrace more financial risk and ultimately reward. But is changing
your money mindset even possible?
How do you change scarcity mindset to abundance?
Transitioning from a scarcity to an abundance mindset isn’t something that happens in a day. But there
are steps you can take to open up your mind to see new possibilities.
- Cut the comparisons. Lose the competitive attitude and begin to lift others up with you. By sharing insights with others and receiving the same in return, you’ll both be better off and farther ahead than you would be on your own. And this doesn’t just go for information either. Sometimes sharing your possessions with others and freely giving can put you in the right mindset to receive more abundantly.
- Be grateful for the blessings you already have. Take time each day to reflect on what you have right now, not what you want. Be sure to keep a positive attitude and view situations through a lens of opportunity. For example, a job loss is a chance to figure out what really matters. It gives you more time to spend with your family while deciding on the perfect career next step.
- Change who you spend time with. It’s often said you are the combination of the people you spend the most time around. So find a group that’s focused on abundance too. Too much negativity and thinking small will drag you right back down to a place of scarcity.
Your financial life and potential are within your control. But holding too tightly to a scarcity mindset can derail your plans. Instead, begin to operate from a place of abundance and see how quickly it changes your perspective and attitude about money and life in general.
