In times of stress, we sometimes fall back into patterns that worked for us in the past, but maybe don’t work so well for us in the current times.
Often, we may self sabotage by creating financial situations for ourselves that replicate patterns we experienced in childhood.
Do any of these scenarios look familiar to you?
- Jennifer can’t stop overspending on credit cards, creating a sense of financial instability in adulthood through a cycle of spending, paying off, spending
- Susan buys all the latest toys for her child so her child doesn’t experience the feeling of “not having” what the cool kids have, which Susan herself experienced in childhood
- Amy refuses to spend any money, even at the detriment of her own health, under the assumption that she has to save every penny in fear that she will run out like her family did years ago when her father lost his job
Stressful times can bring out more old, unhelpful behaviors related to money. A scarcity mindset can be the deeper issue underlying these behaviors.
Scarcity vs Abundance Mindset
Most people are deeply scripted in what I call the Scarcity Mentality. They see life as having only so much, as though there were only one pie out there. And if someone were to get a big piece of the pie, it would mean less for everybody else.
The Scarcity Mentality is the zero-sum paradigm of life. People with a Scarcity Mentality have a very difficult time sharing recognition and credit, power or profit – even with those who help in the production. They also have a very hard time being genuinely happy for the success of other people.”Stephen Covey, The 7 Habits of Highly Effective People
The underlying idea behind the Scarcity Mindset is that there isn’t enough to go around, and there will never be enough. There’s only one raise at work and if one person gets it, no one else can get it. My income will go away if I don’t spend it now. Go on the vacation now regardless of whether I can afford it, because I’ll never have another chance to do it later.
The Scarcity Mindset can create sadness and jealousy. If someone else gets a raise, I didn’t get it. Someone else found a person to marry, and I didn’t. A feeling of jealousy and sadness can arise as a result of someone else getting that which you should have gotten.
The Scarcity Mindset focuses on the extreme short term of every decision. What is the most fun option right now? How can I use up all the resources right now so they aren’t taken away from me later?
With a Scarcity Mindset, you can feel an urgency to spend your income as soon as you get it, before someone or something takes it away from you – such as taxes, “the man”, or even losing it in an investment.
Contrast this with the Abundance Mindset
“The Abundance Mentality, on the other hand, flows out of a deep inner sense of personal worth and security. It is the paradigm that there is plenty out there and enough to spare for everybody. It results in sharing of prestige, of recognition, of profits, of decision making. It opens possibilities, options, alternatives, and creativity.”Stephen Covey, The 7 Habits of Highly Effective People
The Abundance Mindset essentially believes that there is enough for everyone, and there will always be enough.
A characteristic of the Abundance Mindset is its focus on the long term. Just because you don’t get to have something right now, doesn’t mean you will never have it later. Skipping the awesome vacation right now doesn’t mean you will never get a chance to go on vacation again. Someone else getting a bonus or raise could mean your company is looking at performance, and you’ll be next. It doesn’t mean you won’t ever receive one.
The Abundance Mindset can create positive feelings towards others. You can feel happy and pleased for another person’s successes, because what they received is not taking away from what you have. Another person having a good relationship doesn’t cause pain for yourself – instead you feel genuine happiness for that person.
It makes sense that an Abundance Mindset can make personal finance much easier. When you’re focused on the long term and feeling that there is enough to go around, you don’t feel the need to spend money as soon as you get it. There will always be more of it, and there will always be enough. You become less paranoid and afraid of investing or paying taxes or making financial decisions.
Here are some tips on creating an Abundance Mindset
- Create a gratitude practice at beginning and end of each day. Use an app (such as 5 minute journal) or a physical journal. Even send a daily text message to a friend.
- Organize your home and life. Clean out your closet, garage, kid’s room, storage locker. When you Marie Kondo your space, you can feel appreciative of all the things you have that you love, and feel a sense of gratitude that you have so much that you can give some of it away. When you create a new organization system for your papers, business receipts, or other important papers, you are reminding yourself what’s important and can feel accomplished as a result of getting organized.
- Call a friend or loved one to tell them you appreciate them. Taking action on your feelings of gratitude can make all the difference, to them and to you.
“During the loneliest week of my life, I made a list of the people who mattered most to me. Then I wrote them each a note about what I appreciated most about them. Feeling grateful is good, but showing gratitude is better. Voicing the unspoken can remind us we’re not alone – and strengthen our connections.”Adam Grant, organization psychologist at Wharton School of University of Pennsylvania
4. Reduce your media consumption and get outside. Feeling anxious and worried is understandable because we don’t know what horrible news we will hear about next. Backing away from media consumption and getting outside can help you to feel appreciative of your health, the loved ones around you, sunshine and the birds chirping.
5. Share what you have with others. Feel good about what you shared/how you brightened someone else’s day. Most of the time, you don’t even miss what you shared/gave away. Besides things, you can also share knowledge and time.
We are living in unusual times. It might be time to step away from some of those behaviors, financial and lifestyle, which are no longer serving us – and move towards new patterns that cultivate what’s important in our lives.