Money Talks: Defeat Scarcity Mindset While You’re Still Young
Why hello there, Superstar!
I have some very special content for you today. Today, I am sharing BKA’s feature in the Summer 2017 edition of the Mindful Mag!
The Mindful Mag was started by Jordanna Rowan. She runs a blog that’s all about bustin’ ceilings, dreaming big, and empowering millennials to find their happiness and financial freedom. I think her mission is summed up beautifully by the Mindful Mag’s tagline – Mindful Living in Full Color.
That’s a mission I can get behind! So when I learned that the theme for the summer issue is STRIVE, I knew I wanted onboard. After all, I started BKA to help artistic entrepreneurs obtain their freedom as small business owners. To me, the titles artist and entrepreneur go hand in hand because both communities strive heart and soul for this freedom, for financial security, and for a future only they can create. Nothing says you believe in the future like starting your own business.
Strive and struggle are too often used synonymously, however. That’s why I work with money. Many people struggle to gain the freedom they deserve because they have an unhealthy relationship with money. Freedom becomes a lot easier once you defeat your money monsters.
That’s my topic today, and for the Summer 2017 edition of the Mindful Mag. Specifically, I’m going to address how scarcity physically and emotionally damages not only our finances, but also our relationships and future. It’s a topic near and dear to my heart because I myself, my clients, and my friends all struggle with a Scarcity Mindset from time to time.
But it can be defeated! Check this out.
“Most people are deeply scripted in what I call the Scarcity Mentality. They see life as only having 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 hard time being genuinely happy for the success of other people.”
– Stephen Covey, 7 Habits of Highly Effective People
…Along with the false feeling that there is not enough for everyone, Scarcity Mindset makes us feel that we have no control over our future. We especially feel powerless when it comes to money. Research shows that such feelings have real and lasting effects on our psychological well-being. I highly recommend Sendhil Mullainanthan and Eldar Shafir’s book Scarcity: the New Science of Having Less and How it Defines Our Lives. One of the most important things their research shows is that scarcity forces trade-off thinking. For example, if you spend twenty dollars now, then that’s twenty dollars you won’t have later. Making these kinds of decisions taxes our mental resources and willpower.
Like everything else, willpower is a limited resource. When you are poor you must make more of these difficult decisions and eventually your self-control is whittled away. This is why the poor often have “bad habits” like smoking or drinking. It becomes hard to focus on the long-term effects of a decision when there are so many trade-offs to make.
It is important that you overcome scarcity thinking as soon as you can for this very reason. If we feel we have no control over our future, we will become gluttonous in the present. Money will become a source of pleasure, and we will overeat, overindulge, and overspend because it feels good now and now is all that matters. Scarcity mindset might lead us to see how little there is in our paycheck and feel obligated to spend it all before the money “goes away”. Then, when there is no money left for an emergency later, our scarcity bias is complete. The guilt we feel only confirms that we have no real control.
Fortunately, there is a better way to live. Though Scarcity Mindset can make us feel powerless, we can defeat it when we realize that the thoughts, feelings, and fears of Scarcity Mindset are myths that can be overcome. If you recognize Scarcity Mindset while you’re young, you can shift your focus onto long-term abundance that fosters creativity and positive feelings towards others, which will in turn make your personal finances easier. To help begin this process, let us dispel three damaging myths of Scarcity Mindset…