Old habits die hard.
When you get to be a middle-aged man like me, you have forty-six years of learned behavior to guide your actions and decisions — even when you know your choices aren’t necessarily for the best. Our mental blueprints (including our money blueprints) are deeply ingrained and tough to change.
Don’t worry. I haven’t turned into a spendthrift or anything. But I’ve been thinking a lot lately about how certain parts of my past continue to affect me, sometimes in huge and annoying ways. For instance, I fight an ongoing battle against a scarcity mindset.
I’ve been reluctant to talk about scarcity and abundance because the terms have been co-opted by “Law of Attraction” types who use them to encourage magical thinking. I hate the New Age-y approach to these concepts. I want to discuss them from a psychological perspective.
- With a scarcity mindset, you believe that everything is limited. Time is limited. Money is limited. Love is limited. This causes you to worry about the future. You’re consciously or unconsciously more concerned with what might go wrong than with what could go right. You make fear-based decisions. You’re afraid of missing out. You’re afraid of not having enough. You have trouble with moderation and often exhibit “all or nothing” behavior.
- With an abundance mindset, you believe there’s plenty for everyone. There’s plenty of wealth, prestige, and happiness to go around. You’re optimistic about the future. You think things will work out even if there are bumps along the way. You make decisions based on the Big Picture rather than a single snapshot in time. It’s easy for you to balance tomorrow and today.
I’ve written before about my trouble with impulse control. In the past, I’ve had problems with overspending, overeating, video game addiction, alcohol consumption, and borderline hoarding behavior. (I’m a compulsive collector of Stuff.)
All of this — the collecting, the addictive tendencies, the lack of self-control — stems from a scarcity mentality. But I didn’t realize it until a few years ago when my therapist helped me see the source.
Because my family didn’t have much when I was young, I find it difficult to defer gratification. My default mindset — even when life is grand — is that if I want something and it’s available, I should get it now. Somewhere deep inside, I feel as if there won’t ever be another chance. My father had this mindset. My mother had it. My brothers have it too. (Like me, Jeff and Tony have both learned to fight the feeling of scarcity in their own fashion.)
But here’s the thing: In so many ways, financial freedom depends on casting aside this scarcity mentality and embracing an abundance mindset instead. Financial well-being is fundamentally tied to positive expectations of the future.
Let’s look at three ways the scarcity mindset can manifest itself — and how to embrace abundance instead. [Read more…]