Abundance vs. Scarcity Mindset

By now we have established our financial goals, a daily/weekly or monthly action plan and prepared our budget to start off the year on the right foot. In the beginning, it might seem like a piece of cake. Yes, you are cutting your expenses. Yes, you are cooking home. But then… you cross that fine line between being financially savvy and feeling deprived (read broke and depressed). Hence, I feel it is important to set the right financial mindset early on.

When you made the decision to become financially free, you essentially agreed to a change of lifestyle. Now, it is important for you to set your head in the right direction. And having abundance mindset will help you a great deal.

Your expenses are not endless

What is usually the first advice you receive to improve your financial standing?

You are right… cut your expenses. And what do you do then? Cut your cable TV, eating out, decrease the amount spent on groceries, and go as far as saying no to your time with friends (I know… dark times). Essentially, you are not just cutting unnecessary costs, but making “sacrifices” to cut your expenses.

And where does it leave you? Feeling deprived of everything you love and still not at your goal? (even darker times) What’s the point then?

Don’t get me wrong. It is necessary to optimize your expenses and identify the ones that can be easily cut down or replaced with cheaper alternatives. Though suppressing your willingness to buy your favorite fragrance or not going to your favorite team’s hockey game won’t do any good and won’t make you instantly rich either. At that point, your budget will feel like a too much of a burden and self-sabotage will kick in. Congrats, you’ve just unlocked the power of SCARCITY MINDSET!

Scarcity Mindset

Know that little voice in your head saying:

• I don’t have enough money
• I cannot afford that
• I will never have what they have

In his book, The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change, Stephen Covey explains that when you live in a world of scarcity, you compete for available resources, even when there is an abundance of them.

Those with scarcity mindset are usually fearful, anxious and stressful. Why? Because you want to protect the money that you have. ‘Playing it safe’ is your jam. Taking risks – not your style. You think it’s all? ( I hoped so. But no, it’s not). People with a scarcity mindset will mainly focus on negative events in their life, blaming others for their failures.

Fortunately, as Dave Ramsey said:

“I think it’s pretty cool that you can just DECIDE to change your life. Make today THE DAY.”

Dave Ramsey

Abundance Mindset

If I have to describe an abundance mindset, it’s the complete opposite of what you just read. One of the richest women in America, Oprah Winfrey said:

“Be thankful for what you have; you’ll end up having more. If you concentrate on what you don’t have, you will never, ever have enough.”

Oprah Winfrey

THINK BIG is one of the cornerstones of the abundance mindset. Visualize yourself with all the financial goals fulfilled and believe there is enough ‘cake’ for everybody. And it does not mean that you can become a shopaholic and still be within the goals of your budget due to your mindset. It means spending your money on necessities without judging yourself. Having a guilt-free purchase to reward yourself for the small goals achieved. Be grateful for what you have, and optimistic for the future that lays ahead. That’s your key to success!

My experience

Honestly, I was recently trapped in a scarcity mindset. There is one moment when you catch yourself saying only one thing: “I don’t have enough money!”. It’s almost like an affirmation in your mind. You stop enjoying and experiencing the things you love and feel passionate about. I was so focused on not spending money that I missed out on some great opportunities in my life.

And that was a break-point. It does not mean that I gave up on my goals. It’s actually vice versa. I embraced them. It’s like a breath of fresh air. The decision to live an abundant life will impact YOUR LIFE almost immediately. It opened my eyes. I finally overcame my fears and started this blog. I felt a sense of gratitude, positivity, excitement and most importantly, I knew that there are enough resources for everybody.

One of the T.Harv Eker “Millionaire Mindset” Principles is:

There are many ways how to cut your costs, but sacrificing your life is not the way to go. If you believe going for a hike in Amazonian jungles will restart your energy levels, GO FOR IT! Do it now and enjoy the moment! Be smart about your spending and recognize the difference between your wants and needs, but plan for that small reward now and then.

You have to keep the balance between smart spending, living your life and self-deprivation. As Mark Twain said: “Too much of anything is bad, but too much good whiskey is barely enough!” (FYI, not a whiskey enthusiast at all, but a good quote is always appreciated).

This is a bit different from my usual posts, however, the importance of this is just as impactful!

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In addition, I want to say a humongous elephant-size THANK YOU to all my current followers and subscribers. I appreciate your opinion and want to create this as space where we feel free to share our opinions. If you have experience with a switch of the mindset, feel free to share it in the comments section as well.