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It’s All in Your Head: Why a Scarcity Mindset Is Keeping You Poor

scarcity mindset“I can’t seem to get ahead. I guess I’m just destined to be poor.”

“I wish I could afford that.”

“This is good enough. I don’t really want the bigger house, better car or fancy vacation anyway.”

Do these sound familiar? If you’re like most people, they probably do. You’re frustrated at the end of the month because it feels like every penny you make goes toward paying bills, and you have nothing to show for your hard work. You see things that you would like to have, seemingly frivolous items like designer shoes or a new television, and walk away, thinking that because you don’t have the money now, you won’t ever be able to have what you want. You’re jealous of others.

While it’s true that basic necessities like food and shelter cost more than ever, the real reason that most people aren’t achieving wealth goals has nothing to do with how much money is in the bank. It has to do with how they think about money.

There’s Never Enough

Many people have what’s known as a scarcity mindset or scarcity mentality. In the simplest terms, the scarcity mindset is the belief that there will never be enough — whether it’s money, food, emotions or something else entirely — and as a result, your actions and thought stem from a place of lack. Instead of believing that you have enough, and there is plenty to go around, you cling to everything you have out of fear of coming up short. It manifests itself as something as small as under-tipping a server to keep your bill small, to a more substantial decision, such as not investing in the market because you’re afraid to lose money. When you have a scarcity mindset, all decision-making is based on the false notion that there isn’t anything else coming or that you can’t make more money.

never enoughThe scarcity mindset prevents you from achieving wealth for several reasons. First, when you’re constantly focused on keeping what you have, you don’t seek new opportunities. Fear holds you back, so instead of becoming an entrepreneur, you develop a false sense of security from collecting a paycheck — forgetting that you’re putting your financial well-being into someone else’s hands.

Second, the scarcity mindset often makes you feel as if you aren’t worthy of wealth and success. You might be focused on just “getting by” and avoiding imminent disaster. Never mind that there’s no reason to believe that things will fall apart; you just want to stay afloat that so you’re reluctant to take any chances — even if it’s just investing a small amount of money. You may need that money for an unexpected bill, after all.

The scarcity mindset also causes people to make poor decisions. When you are worried about your bank balance, for example, you might put off opening the bills or pay at the last second (or even late). Yet the issue won’t go away on its own and in fact will only get worse — thereby increasing the feelings of scarcity.

Addressing the Issue

So how do you overcome the scarcity mentality, especially when it’s been your prevailing way of thinking for most of your life?

  • Use the language of prosperity. Instead of saying “I can’t afford it,” say “I have other priorities right now.” Shift your thinking, and focus on the abundance that you do have.
  • Let go of “stuff.” The scarcity mindset can often manifest as hoarding, as people often hold on to things long past their usefulness for fear they will have to go without. Let go. Donate unused or unwanted items to a worthy cause, and you’ll instantly feel wealthier.
  • Avoid comparisons. Scarcity thinking often causes overspending, usually because you want to keep up with others. You let envy guide your decisions, causing huge bills. Don’t compare yourself to others; they may be overspending as well.
  • Acknowledge others’ success. The scarcity mindset leads to jealousy not only in the material sense, but also in feelings of inadequacy or competition when others have success. To improve your own outlook, acknowledge the success of others and applaud their achievements. They may just inspire you to improve your own situation.
  • Make small steps toward growing your wealth. Open a savings account. Invest a small amount of money in the stock market. Increase your 401(k) contributions. Build your safety net, realizing that you won’t miss a few hundred dollars here or there in the overall scheme of things.

When you change your mindset from scarcity to abundance, you become more tolerant of risk and understand that you need to spend money to make money — and that when you focus on abundance, it will come your way.

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About Grayson Bell

I am an average Joe, who built up over $50,000 worth of credit card debt and had to learn how to break it back down. It took 4 years of learning budgets, secrets, and many other personal finance tricks in order to cut the debt to $0. Now, I push to teach others not only how to get out of debt, but how to use credit wisely and how to start growing their wealth. You can view my other site, Sprout Wealth for ways to grow your money. I am also a freelance personal finance writer who provides staff writing and ghost writing services.


  1. It’s so easy to underestimate how powerful and important mindset is in achieving anything. Great tips!
    Mel @ brokeGIRLrich recently posted..A Diatribe Against the Starving ArtistMy Profile

  2. This is terrific. That a scarcity mindset can contribute to real problems is something that just isn’t said often enough

  3. Awesome post. A great mentor of mind always said to keep an unlimited pie mentality. His belief? It doesn’t matter how many people are already “doing what you’re doing.” Cream will rise to the top, baby!
    AverageJoe recently posted..Great Business Practices from Small Company USA with Scott SchaeferMy Profile

  4. Well said! How you see things will absolutely impact your attitude towards life. The more positive you think about the better you feel and the more motivated and productive you are.

  5. I think there is more to it than a simple decision for most people. I think a lot of people have spent their lives being told negative things like “you won’t amount to anything” or “it’s not possible to succeed in xyz.” Breaking down those walls is essential for moving past the scarcity mindset.

  6. Oh my goodness, this describes how we’ve been to a T. We put off opening bills. We saved money because we thought an unexpected bill would pop up. We are not quite hoarders, but there’s not much we’ve let go of in the past few years.

    I’m going to be sharing this information with my husband. It’s clearly time for us to work harder on mental shifts. Thank you for this!
    Kirsten @ Indebted and In Debt recently posted..The Grace of Good FriendsMy Profile

  7. Love love love this! So absolutely true. I used to have that mindset when I first started freelancing. Man I must have been a peach to be around. ugh! I realized the more I wished for things to change, the less they did. I don’t want to get all “the secret” here, but it certainly makes you a more positive person in general when you flip your dialog to a more positive type saying. I swear though once I did, opportunities came to me.
    Tonya@Budget and the Beach recently posted..Five Things Freelancers Can Do When Work is Slow, Aside from Freak OutMy Profile

  8. As I started to read your post, I was thinking, “Interesting, but it isn’t an issue for me.” But then I recognized myself in these words: “you don’t seek new opportunities. Fear holds you back . . ” Thanks for the eye-opener and for the advice regarding a change in language.
    Prudence Debtfree recently posted..Debt and FoodMy Profile

  9. I see it all the time, great post!
    Chris recently posted..The ABC’s Of Creating A BudgetMy Profile

  10. Grayson, AWESOME post. We struggled with this for many years, and I thoroughly believe it’s a large part of what got us into so much debt. We have largely overcome it now, using the tips you mentioned above, but we still have to work regularly at having a prosperity mindset. Attitude is indeed everything.
    Laurie @thefrugalfarmer recently posted..When It’s Pointless to Give Others Money AdviceMy Profile

  11. So true! I’ve fallen into that trap in the past. You can accomplish some much more with the right mindset!
    Tre recently posted..Fatbit?My Profile

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