MONEY TALKS: SCARCITY MINDSET.
The scarcity mentality and 5 ways to change it from a personal perspective
Psychologists argue that humans place a higher value on an object that is scarce, and a lower value on those that are in abundance.
Stephen Covey in his book of The 7 Habits of Highly Effective People posits that most people with the scarcity mentality live life as if there’s only one limited piece of pie out there and if someone gets more of that pie that means everyone gets less.
Lacking the resources to satisfy one’s needs has a profound impact on our decision-making process. Often, people who live below the poverty line are more likely to make poor financial decisions in relation to scarcity compared to the rich. One may argue that the rich are cushioned from economic hardships as they have more than enough to meet their demands yet in real sense, it is the adaptability in their mindset that ensures they stay afloat.
To alleviate themselves from poverty, the poor often make decisions that may cause their situation to deteriorate( Shah, Mullainthanal, and Sharrif 2009) by engaging in;
- Taking loans at higher interest rates.
- Gambling hoping to be millionaires overnight.
- Saving less and spending more without diversifying their sources of income.
- Living in the present ( They have no clue about the trade markets internationally, avenues to get money from, and what could be the next big idea!)
Here’s how to get rid of the scarcity mentality.
- Focus on Growth.
Comparison waters down the progress you have made in becoming a better person. You can be easily tempted to buy something simply because other people have it.
The only person you should compare your strides towards financial freedom is your own self; think of how far you have come, how much you have saved after realizing your financial health needs proper diagnosis, and how better your future self will be.
2. Be proactive.
Be better than you were yesterday.
Define and redefine your financial goals clearly and sticking to them.
Go out of your way in networking, pitching your business idea despite the rejections, getting an extra source of income, and identifying a skill you have that can be monetized.
Be in the know, constantly update yourself on global issues that would make you easily identify market gaps.
3. Affirmations.
“ You've got to put some work behind that wish of yours”- Vuzi Thembekwayo
Consistently assure yourself you are enough, you have what it takes to become better. Acknowledge your strengths and put in the work and the effort to achieve your financial goals.
4. Stay Disciplined.
The distance between the life you have and the life you want is discipline and consistency. You cannot achieve your wealth vision without working towards financial freedom. You cannot be financially fit if you still practice the same old financial habits.
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