Scarcity mindset - being more intentional with your finances

 

You might have read a million different articles and opinion pieces about how to start saving money and getting ahead. You want to live your best life and enjoy it as much as you can and you’ve read about how you need to cut out this or start doing that as the magical formula to get you to where you want to be financially.

 

At TWiCE, we understand that doing those things is important, but what matters most is your mindset and wellbeing. Simple.com has written an interesting perspective on how our mind and money interact, they talked about what's called the scarcity mindset. It’s where you hoard your money and resources as much as you can - you’re supposed to think that there’s only a limited amount of resources available. It uses guilt and fear to discipline yourself into being intentional with your finances to meet your financial goals. It isn’t healthy though, part of living is enjoying all that life has to offer. At TWiCE, we are passionate about encouraging a healthier relationship with money and reinforcing positive habits that lead to more financial freedom.

 

With a scarcity mindset, you might guilt yourself when you want to go out and buy something nice for yourself. Even when that action isn’t breaking the bank, you get down on yourself for doing it anyway. Depriving yourself of the little things that get you through the day, or week only serves to make you feel worse.

 

One of our TWiCE members recalls a colleague of theirs who would once a week, generally on the weekend, treat themselves to a scented candle or two and run a long bath. In the grand scheme of things this is a relatively inexpensive leisure activity compared to say, going out for dinner or drinks. It helped them relax, recharge, and wash off the all the stress and troubles of the week at work, a really great type of self care.

 

Lo and behold on Monday they would be regretting the fact that they spent that money and guilting their way through the rest of the day. Which would end up meaning they would go and do the same thing again because of how poorly they felt about themselves during the week. The scarcity mindset can end up making you feel pretty awful about yourself and reinforce negative habits rather than prioritising your financial goals. It’s incredibly important to avoid this vicious cycle and try to develop a healthier relationship with money.

 

If you’d like to find out a little bit more about different ways our psychology affects us on our financial journey, it might be worth checking out the workshops, classes, and support we offer here at TWiCE.

- Tom L

 

Disclaimer:  The above information does not replace financial advice.  Please ensure you seek independent financial advice before making any decisions regarding your finances.  We also recommend that you carry out your own research to ensure that this is right for your own unique circumstances.  Please note that we sometimes link to other websites but we cannot be held responsible for their content.