Fighting Scarcity Mentality Is About More Than Just Money — or Beliefs

I nudged myself to pick up my to-do list and cross something off. Instead, I ended up eating potato chips over the kitchen sink, watching out a squirrel out the window.

It was just one of many unproductive moments through this past week. Why was it been so hard to get my stuff together, run those errands I’ve been putting off, mail that 401k rollover check that’s been sitting on my desk for weeks?

When I actually try to answer that question, it’s kind of obvious: I’m tired. With the holidays and end of the year approaching, it seems there are “bonus tasks” cropping up in pretty much every area of life, from home to work to parenting. It’s tiring to keep up with all of them.

In short, I’m running closer to empty, lacking the mental, physical, and emotional reserves that I need to be productive. And it’s landed me in a familiar place: a scarcity mindset.

Scarcity isn’t a mindset you choose — it’s an automatic mental mechanism

The idea of a “Scarcity mentality vs. abundance mentality” might sound familiar if you’ve hung around any self-help or personal finance communities. Or you might’ve read about it in “The 7 Habits of Highly Effective People,” in which Stephen Covey coined the term. (Here’s a great post on this topic.)

But I want to challenge the usual discussion around choosing an abundance mentality over a scarcity mentality.

Thanks to research on scarcity and psychology, we know that scarcity is less a mindset or mentality that you choose, and more a mechanism that works automatically to manage resources and needs.

The mental game of scarcity isn’t about our beliefs — or at least, not completely. It’s much more about the core instincts and wiring that’s designed to keep us safe and secure.

And no amount of “abundant thinking” will bypass these kinds of hardwired responses in our brains.

How our brains’ scarcity mechanisms function (and dysfunction)

The scarcity mechanisms in our brains are tasked with monitoring needs and measuring resources, with the goal of prioritizing what’s urgent and important. When a resource gets too low, the scarcity sensor brings that to our attention.

That’s the major upside to the scarcity mechanism. When it operates positively, it alerts us to potential shortages. It helps us prioritize choices and resources to get more of what we’re lacking. 

But this scarcity mechanism can often operate negatively, generating a stressful, single-minded focus on what we lack. With this tunnel vision on scarcity, it’s harder to take a long view, make wise choices, or stick to the commitments and goals we’ve set. (Here’s a great read/listen about scarcity!)

The effect of scarcity, then, is a stressed and less efficient mind. Research shows that when under the influence of scarcity, we’re more likely to:

  • Forget things or make mistakes
  • Give into impulses rather than control them
  • Have difficulty regulating and dealing with emotions
  • Make poor or shortsighted decisions
  • Lack the capacity to plan ahead 

It’s harder to think or act right when we feel the pressure of scarcity. Because our minds become consumed with just getting through the day.

Hence me this week, spinning my wheels instead of doing the things that would actually make my life easier, more manageable, and happier.

When we feel a sense of lack, there simply is less mental space or energy left for effective problem solving, tracking progress, or prioritizing tasks.

Scarcity of any kind is likely to damage our finances

It’s obvious how money scarcity — being broke or poor — directly damages our finances. But scarcity of other resources or unmet needs can have just as negative an impact on our finances, too.

The tunnel vision of scarcity keeps us focused on what we think will provide us with relief right now. We end up just throwing money at a non-financial problem in a desperate attempt to fix it, without much regard to how expensive or financially foolish it might be. 

If we’re lacking time, we’ll pay out the nose for the convenience of eating out or hiring a house cleaner. Feeling trapped or restricted, we might find ourselves impulsively booking a vacation that adds thousands of dollars to our credit card balance. If we’re feeling deprived by our budget, we might wind up bombarded with urges and impulses to overspend and treat ourselves.

I want to be clear: none of these money behaviors is inherently negative on its own. But money choices become a problem when they’re not made intentionally and on purpose. When they’re instead the result of poor decision making processes that have been steamrolled by our scarcity responses. 

When we’re stressed and worried about a scarce resource, we literally can’t care as much about the money. We just care about getting a little bit of relief. So we wind up making misguided money choices that take us further from the financial health we’ve worked towards.

How to limit the negative effects of scarcity

Just because our brains kind of catch on fire when we’re feeling a scarcity, however, doesn’t mean we have to panic and make it worse. We can curtail the negative effects of scarcity mechanisms in overdrive. 

Even when I’m feeling the margins thinning out in my life, I’ve learned there are actions I can take to help myself stay afloat and get back on my feet. I try to fight the scarcity anxieties and create some space for myself to think more clearly.

Give yourself a buffer. Do less, buy less, and plan in some “give” into your finances and your schedule. Save money to take care of unexpected expenses, or set aside a “fuck up fund” to cover mistakes. Pause some commitments to free up time and mental space to destress, get out of your scarcity response, and clear your head.

Don’t let it snowball. When scarcity mindset kicks into high gear, it is harder to take care of tasks that will help you get ahead. And it’s okay to leave some things undone! But make sure you know what must get done to limit mistakes or damage. Prioritize expenses and tasks to keep things from getting worse.

Be flexible with yourself. Focus on progress over perfection. Remind yourself that your brain is extra taxed, and some delays, missteps, and forgetfulness is to be expected. You won’t get everything right, but you can get most things right, most of the time. And that is enough.

Get to know yourself and your stress responses. If you can notice you’re responding out of stress in the moment, that gives you a chance to course-correct in real time. Try out de-stressing strategies when you’re doing well, so you’ll have proven ways to cope when you’re not.

Recognize and talk back to irrational thoughts. You’re more likely to have distorted or irrational thoughts when you’re stressed. Ideas like, “There’s never enough,” “Things will always be this bad,” or “I’m just bad with money.”

Try to challenge them with more useful thoughts such as, “I can find ways to save and make more money,” or “I’m taking responsibility for my finances and putting energy into improving them.”

Change your mentality — and find better strategies for scarcity

I don’t think Covey’s “scarcity vs. abundance mentality” idea had it all wrong. 

As a matter of my own values and beliefs, I actually lean more to an abundance mentality myself.

But I also think that dealing with scarcity really is as hard as it feels.

Scarcity mentality is bigger, scarier, and more entrenched than what can be dealt with by simply, I don’t know, believing that there’s an abundance of money or resources to go around for all of us. Thanks to how my brain is wired, I know an abundance mindset isn’t something I can just flip on whenever I want.

While trying to change our thinking and beliefs around scarcity and abundance is helpful, there are other effective ways to manage a scarcity mindset, too. The best strategy is to try to start filling our needs, managing our money stress, and filling up those reserves when we find ourselves running on empty.

Photo by Kristina Flour on Unsplash

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