“I’ll never be rich.”, “I guess I’m just destined to be poor.”, “I wish I could afford that.”
Do you ever catch yourself thinking these phrases? If the answer is yes, then it’s possible you’ve developed a scarcity mindset when it comes to money.
What the hell is a scarcity mindset, you might ask. The term was first introduced by Stephen Covey in his wildly successful book “The 7 Habits of Highly Effective People”. Here’s how he defines it: “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.”
Covey speculates that most people aren’t achieving wealth not because of not making enough money, but because of how they think about money. This scarcity mindset prevents people from becoming wealthy for multiple reasons. First of all, it often makes you feel as if you aren’t worthy of wealth and success. When you’re convinced that money isn’t within your grasp, you give up or don’t even bother trying. Those with a scarcity mindset always play it safe, not realising that in order to grow and expand they might need to get out of their comfort zone and look for new opportunities. On top of that, scarcity often manifests in a lack of self-control that leads to draining the resources needed to maximise opportunities.
While all of that might sound a bit overwhelming, it’s very important to understand that a scarcity mindset is only that: a mindset. We are capable of shifting our thinking to an abundance mindset and opening up a whole new world of opportunities. Abundance is simply the ability to see more in life: more options, more choices, and more resources. Covey describes it this way: “The Abundance Mentality 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.”
How to shift from a Scarcity to an Abundance Mindset
1. Use the language of prosperity.
The words you use matter. Instead of saying “I can’t afford it”, try saying “I have other priorities at the moment.” Don’t allow your language to place you in the role of someone who can’t shape their own financial destiny.
2. Surround yourself with abundance-minded people.
Ask yourself if you look up to the people that you surround yourself with – if the answer is no, then maybe it’s time to search for people that are living the life you aspire to.
3. Make baby steps towards growing your wealth.
Little things like opening a savings account, investing a small amount of money in the stock market, increasing your super contributions, will build your financial confidence and help you break the scarcity circle.
Read our tips on how to quit toxic money habits.
5. Stop comparing yourself to others.
As Theodore Roosevelt famously put it, “Comparison is the thief of joy.” Social media doesn’t make this easier for us, but you need to understand that you can’t judge the reality of others’ lives based on their Instagram. People carefully curate the social media feeds, so comparing your life to someone else’s highlights will always make you feel inadequate, as it’s simply not a fair comparison. Don’t go down that road.
6. Practice gratitude.
This is such a helpful habit to cultivate. When you take time to appreciate what you already have on a regular basis, you increase the attention you pay to good things in your life – and this is, my friend, a pure abundance in action! Try to practice gratitude every day by simply listing 5-10 things you’re grateful for that day. You can also choose an app to help you build this habit and make it more fun.
7. Change your view of wealth.
Start to associate finances with opportunity, growth, and well-being, rather than anxiety, jealousy, and insecurity.
8. Make a plan to achieve your money goals
Setting short-term, mid-term, and long-term financial goals is an important and empowering step towards financial abundance. Creating plans involves being active rather than passive and puts you in the position of control.
These simple steps focus mostly on reprogramming your thoughts, as they’re your biggest asset towards creating wealth and prosperity in life. Let me finish with words by William James, that sums it up perfectly: “The greatest discovery of my generation is that a human being can alter his life by altering his attitudes of mind.”