9 Signs You Have A Scarcity Money Mindset

Scarcity money mindset can occasionally creep in. But if you're not careful, it can quickly become a self-fulfilling prophecy.

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Have you ever cringed before opening the bill at brunch? Or been too scared to even open your bank account app? We’ve all been there. Seemingly scraping by, worrying about whether there’s enough money to cover the next bill. And no matter how much money we manage to save, it seems like it’s never enough.

Yes, financial stress is commonplace these days. But if you find yourself in a never-ending cycle of financial insecurity, even when you’re bringing in a decent income, it could be a sign of something deeper: a scarcity money mindset.

Although a scarcity money mindset is often subconscious, it can have a profound effect on your day-to-day life. In a 2017 study, researchers discovered that simply thinking about a costly car repair bill dramatically lowered the cognitive performance of low-income individuals.

Between social obligations, unanticipated expenses, and general financial insecurity, it’s no wonder our money mindsets are often on overdrive. But if you’re not careful, a scarcity money mindset can quickly become a self-fulfilling prophecy.

If you feel like this is totally you,  We’ll help you spot the  signs of a scarcity money mindset so you can make changes to start hitting your money goals.  

What is scarcity mindset?

Scarcity mindset is the belief that there’s never enough of anything to go around. From money to opportunities to love, those with a scarcity mindset believe that the world is a place of limited resources. 

This belief often leads to feelings of anxiety, stress, and insecurity. And it can be tough to shake off, even when logic tells you otherwise.

When we’re caught in the grip of scarcity, we make decisions out of fear. We become so focused on preserving what little we have, that we’re unable to see opportunities for growth. We become risk-averse and miss out on chances to improve our lives.

A scarcity money mindset is often the result of traumatic experiences or difficult life circumstances. But it can also be a learned behavior passed down from parents or guardians.

If you grew up in a household that was always struggling to make ends meet, you may have internalized the belief that money is hard to come by and impossible to save. And if your parents were constantly arguing about money, you may have come to believe that financial stability is unattainable.

Fortunately, a scarcity mindset doesn’t have to be permanent. With proper understanding and effort, you can change your money mindset and break the cycle of financial insecurity.

How do I tell if I have a scarcity money mindset?

Not sure if you have a scarcity mindset? Here are 9 signs to look out for:

1. You’re constantly concerned about paying off debt:

Those with a scarcity mindset often believe that they will never be able to get out of debt, no matter how hard they try. They may make minimum payments on their credit cards or student loans,  believing that’s all they can afford.

But living in debt is not a financial death sentence. With proper spending habits and financial planning, a debt-free life can be possible.

2. You’re scared of using emergency funds for emergencies:

People with a scarcity money mindset often see their emergency fund as a last resort, to be used only when absolutely necessary. They’re so worried about running out of money that they refuse to use their emergency fund, even when facing a real financial emergency.

Yes, it’s essential to be mindful of your spending. But hoarding your emergency fund may end up doing more harm than good. 

If you’ve worked to save an emergency fund, remember its purpose is to be used for just that. When an unexpected, necessary expense comes up, you shouldn’t feel guilt or shame dipping into it.

3. You don’t set ambitious financial goals:

It’s normal to be a little cautious when setting financial goals. After all, you don’t want to set yourself up for disappointment.

Although a healthy dose of realism is key to financial planning, be careful not to let your fear of failure hold you back. The fact that you’re constantly setting small, achievable goals because you’re afraid to fail could indicate a scarcity mindset.

Rather than shooting for the stars, you play it safe—setting modest goals that do not test your limits.

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What you may not realize is that by setting small goals, you’re perpetuating the cycle of financial insecurity. If your goal is to simply get by, that’s precisely what you’ll end up doing.

So, set ambitious goals that challenge you to grow. Though you may not achieve them all, you may be surprised by the progress you make.

4. You let the fear of emergency expenses stop you from investing:

According to Franklin Templeton, one of the significant barriers to investment success is the fear of losing money.

It makes sense—no one wants to see their hard-earned money disappear. 

Wealthy people understand that to make money, they have to be willing to invest it. They’re not afraid of taking risks because they know that investments offer the potential for high returns.

Of course, there’s always a risk, but holding onto every penny you earn won’t allow your money to grow.  

5. You’re unwilling to spend money to enjoy yourself:

Whether it’s a new piece of clothing, tickets to a concert, or simply going out to eat, those with a scarcity mindset are often unwilling to spend money on themselves. They convince themselves that they can’t afford to enjoy life’s simple pleasures and instead focus on hoarding every dollar that comes in.

You deserve to treat yourself (within reason)! If you’re working hard and making progress towards your goals, you deserve to enjoy the fruits of your labor. 

6. You typically avoid thinking about your money:

When was the last time you sat down and took a good, hard look at your finances? If you’re like most people, it’s probably been a while.

For many of us, money is a taboo subject—talking about how much we make, how much debt we have, if we’re saving enough etc. We don’t like to think about it because it makes us feel uncomfortable. We’d rather just ignore our financial situation and hope that everything will work out in the end.

While it’s perfectly normal to feel uneasy when thinking about money, avoiding the subject altogether does little to improve your money mindset. In fact, it could make things worse. 

The more time you spend avoiding your financial truth, the more likely you are to fall into a cycle of debt and insecurity.

Take some time to educate yourself about personal finance. Read books, listen to podcasts, and talk to people who are financially secure. The more you know about money, the less scary it will be.

7. You’re reluctant to ask for a raise:

Despite the thrill, satisfaction, and feeling of accomplishment that comes with earning a raise, many people are afraid to ask for one.

According to a 2020 report, 60% of female workers said they have never negotiated their salary with an employer. And 72% say they prefer to quit their current employment to get a higher paying job elsewhere.

The truth is, if you’re not comfortable asking for a raise, you’re likely leaving money on the table. And if you’re not willing to negotiate your salary, you’re at a disadvantage both professionally and financially.

Don’t be afraid to ask for what you deserve. It’s not greedy to want to be paid what you’re worth. 

Start by doing your research to determine the average salary for your position and experience level. Then, armed with this knowledge, make a case for why you deserve a raise. Be confident and prepared to negotiate.

8. You’re constantly comparing yourself to others:

Whether it’s your neighbor’s new car, your friend’s luxurious vacation, or your colleague’s designer handbag, you can’t help but feel that you’re falling behind.

This thought pattern is dangerous because it leads to feelings of envy, insecurity, and inadequacy. It’s also a major contributor to  imposter syndrome—the belief that you’re not good enough or don’t deserve your success.

The next time you find yourself comparing your life to someone else’s, remind yourself of two things:

  • You don’t know what goes on behind closed doors
  • Everyone’s path is different

9. You have a negative relationship with money:

Do you find yourself saying things like, “I hate money,” “money is the root of all evil,” or “I’ll never be able to afford that”?  If so, you likely have a negative relationship with money.

As you dwell on these negative thoughts, they can become beliefs. And these beliefs shape your reality. 

For example, if you believe that money is the root of all evil, you’re more likely to make decisions that reflect that belief. You might avoid talking about money and make impulse purchases instead of investing in your future.

It’s time to change the way you think about money. Rather than thinking about what you don’t have,  as a tool to help you achieve your goals and live a better life.

And as you change your mindset about money, you’ll be amazed at how conveniently opportunities—and more money—seem to flow into your life.

3 ways to get over a scarcity mindset

Getting over a scarcity mindset requires a great deal of self-awareness, introspection, and effort; but it’s not impossible. With the right mindset, you can overcome your scarcity mentality and start living a better life.

Here are a few tips to help you get started:

1. Praise yourself for what you’ve already saved:

Life is full of ups and downs. And during the tough times, it’s easy to dwell on your mistakes and beat yourself up for things you could have done differently. But it’s important to remember that even throughout those mistakes, you’ve made progress.

So, the next time you’re feeling down about your finances, take a step back and remember where you started and the work it took to get you to this point. From paying off  a small debt or saving up for a rainy day fund, take pride in the small wins.

2. Find education in failure:

There’s no such thing as failure, only feedback. Instead of beating yourself up over your mistakes, use them as opportunities to learn and grow.

Every time you make a financial mistake, take a step back and ask yourself what you could have done differently. What were the circumstances that led to the mistake? What can you change to avoid making the same mistake in the future?

Answering these questions will help you avoid making the same mistakes and take you one step closer to overcoming your negative money mindset.

3. Invest in yourself:

Be your own best advocate. Invest in your education, career, and personal development. The more you invest in yourself, the more confident you’ll become—and the more likely you are to attain financial security.

Candice Na

Candice Na

Candice Na is the VP of Marketing at Stackin. With over 10 years in the wellness and relationship space, she is obsessed with bridging the gap between finance and emotions. If Candice isn’t hanging out with her husband and their two kids, she’s either unsuccessfully planning a vacation, looking up someone’s birth chart, or getting far too emotionally invested in reality dating shows.