How to heal your relationship with money?
By: Yogesh Parmar
Tags: Personal Finance, Scarcity, Money Mindset, Money Management, Money

Credit: David Cerny

How to heal your relationship with money?

Talking about money can be impossibly hard. Our life experiences with money and the lack of it tend to be so extreme at the opposite ends of the spectrum that there is always an unwitting emotional charge attached to thinking or speaking about the subject. What we believe about money is also ever so often influenced by what our parents and early caregivers believed about money. The mindset and conditioning that was bequeathed to us when we we were not watching. It is a most tricky thing to unravel and unpack because we never really manage to think about it independently given the constant reinforcement and reiteration of those regurgitated ideas.

Speaking for myself, I have chronically misunderstood the role of money in life — either whimsically understating its importance or wildly overstating its significance. As a teenager, i was a money snob — thinking I can do without it altogether. For a brief period in the early twenties thereafter, I was infatuated with everything that money can do. I am still learning to treat it for what it is — an instrument that gives me the freedom to do the things I love doing most with the time left on this planet.

I have also been afflicted with a belief that is central to the human condition and the single biggest obstacle when it comes to money: the scarcity mindset. This is fundamentally a way of interpreting and understanding the world which is is independent of the reality of your present circumstances — whether scarce or not. Even when the reality changes, the mindset and behavior to act from this inaccurate impulse is all pervasive.

The thing is that while scarcity is a reality for some of us, it is also true, that for many others, a scarcity mentality is a stress-based negative feedback loop, fuelled by old beliefs and past experiences rather than our current reality. This wouldn’t be as harmful if not for the consequence that by focusing merely on our survival, this mindset keeps us from thriving and manifesting our dreams.

A mindset of scarcity impairs our judgement at multiple levels and primes us for a series of poor decisions.

Scarcity is not just a physical constraint. It is also a mindset. When scarcity captures our attention, it changes how we think. By staying top of mind, it affects what we notice, how we weigh our choices, how we deliberate, and ultimately what we decide and how we behave. When we function under scarcity, we represent, manage, and deal with problems differently. Essentially, we activate our lizard brain.

In this piece, I am going to attempt to lay out what a scarcity mindset looks and feels like, how it sabotages our attempt to a life that we aspire to lead and what one can do to confront and overcome it.

Scarcity is an irrational fear that rests deep inside all of us, whispering to our subconscious mind that we simply don’t have enough. More importantly, the fear that there isn’t enough for everyone out there. That life at every level, is a zero sum game.

I would wager that for upwards for 95% of people in India and other developing countries, a scarcity mindset is a default starting point for any conversation or even thinking about money. It is both subliminal and subconscious and unless one is terribly mindful, a state that is not easy to excavate and surface. When we start to feel like there isn’t enough of something, a combination of anxiety and an unexplained sinking feeling take over, complete with the pounding of the heart and the tensing of the shoulders. It is an uncanny but entirely familiar combination of dread, adrenaline rush and hopelessness.

Scarcity makes us hold ourselves back from pursuing opportunities of progress and prosperity. We start believing there isn’t enough money to support our particular opportunity, or we see other people in a similar niche and we think that there aren’t enough customers for us to be there, too. We get a degree in a field where jobs are plentiful, even if they don’t pay well, or we launch a product that is cheaper because we are afraid no one will buy the one we really want to sell.

We react in predictable ways when we think there isn’t enough of something. It doesn’t matter what the thing in question is — you can plug and play time, attention, bandwidth, money, energy, appreciation into this equation and the result is likely to be the same.

A scarcity mentality manifests in our thinking, behavior and action in different ways:

a) A common consequence for instance is the formation of a consistent “us versus them” mentality. You see someone with a lot of money, and before you realize your ‘pain body’ is activated: envy, jealousy and enemy images abound because not only do we not have that money, we also think that less of it is available overall.

Most of us spend an entire lifetime operating from this ‘zero sum game’ paradigm — the mental model that assumes that for someone to gain something, someone else somewhere, has to to lose an equal stake. It is flawed and fragile at once, making us have an incorrect and incomplete understanding of how things play out in the real world. This is not to say that inequality is not the biggest menace of our times, but that money in general and as a principle is not a zero sum game.

b) A scarcity mindset is intricately woven into being in survival mode. Many of us live in a state of hyper-arousal, where the slightest stressor gets interpreted by our nervous systems as a threat to our survival

The first muscle twitch that most of us get when we think of money is the fear that we don’t have enough of it or that what we have will run out soon. A doomsday scenario of the near or far future is a visualisation that is both common and endemic to both people who earn in five figures as it is to those with telephone number salary figures.

c) When we think something is scarce or in short supply, that very idea of scarcity compromises the way we think about the thing in question. Our amygdala gets hijacked, impairing both our IQ and EQ in the short term. Poor people, for instance, make poor decisions primarily because they are poor. When all bandwidth is occupied on figuring where the next meal is going to come from or earning an errand that will keep the kid in school, it is hard to have a long term orientation.

d) Scarcity also manifests in how we view ourselves and tend to think about our own lives. I used to be the kind of person who, when things were going well, used to wait for the other shoe to drop. It seemed like the good can’t go on forever, or that what is being earned in one aspect of life will have to compensated for elsewhere.

e) A scarcity mindset can also mean that we have difficulty in receiving. Compliments, gifts, someone treating us well often end up in us downplaying our achievements, or with the feeling like you have to even the score by paying the compliment back immediately. We erroneously believe that when someone gives something to us, they must have “lost” something in return. This is simply not true. I am still learning to resist the urge to deflect kind words. Another indicator of scarcity thinking is if we have an internal scoreboard that is keeping track of who did what. While fairness and reciprocity are both important values for many of us, tit for tat thinking can prevent us from accessing a space of open generosity and trust.

This scarcity — whether real or perceived — hampers our thinking in ways we cannot even begin to imagine.

A scarcity mindset in general can deplete our confidence, compromising our capacity to trust significantly. The state of constant arousal and hyper vigilance also places undue and extreme pressure on our nervous system and cognitive capacity leading to emotional exhaustion.

A scarcity mindset is easy to diagnose.

Do you:

i) Find it difficult to be generous or wholeheartedly celebrate other people’s success or find yourself wishing that others should not succeed

ii) Find yourself to be consumed by competition and comparison.

iii) Feel worse about yourself after an interaction with someone in person or on social media.

iv) Feel constantly anxious but do not know why.

v) Find yourself clinging to one idea of perfection as the ideal way of being/doing something.

vi) Find that there is a strict black and white lens with which you view the world. That you constantly are trying to prove to yourself that you are right and consider differing view points as a threat to your survival.

At the root of scarcity mindset is fear. Anxiety, hyper-vigilance, reactivity and defensiveness are often signs of a scarcity mentality. When it comes to money, most of us — across cultures and continents — seem to be cut from the same cloth.

How to confront and overcome it?

a) The opposite of a scarcity is not an abundance mindset, which is for all practical purposes, the other side of the same coin. The opposite of scarcity is knowing that there is enough. Far more importantly, it is knowing that you are enough.

When we believe that we are enough as we are, when we internalise this truth about ourselves over and over again, we begin to live and embody it. You will start to believe there’s enough money for your start-up and for those of others, that there is enough love for you to find it and for others, that there is enough time to work a good job and pursue a passion in the evenings.

When we believe there is enough, we will act as if there is enough, and then we will see that there is, actually, enough.

When we don’t believe we are enough — that we are doing enough, or that there is enough opportunity in the world for us — then a scarcity mindset is always knocking on the door. What we have is an explosive cocktail of shame, a disengagement from taking risks which may result in failure, a ridiculous fear being misunderstood or being seen as flawed.

b) Another way to confront the scarcity narrative is to actively seek different stories about money. Most folks, everywhere, are told the same stories about money.

When we don’t believe that there’s enough money, success, goodness, customer support, or whatever, we tend to get stingy. We don’t want to invest ourselves and our money in something, because it might not work out. We don’t want to try for something better, because we wonder what bad thing might happen to us in another part of our lives if that thing did work out.

c) Another antidote to scarcity is safety. When we feel safe, like the world isn’t out to get us and our place in it is secure, we are often more willing to risk. I think the same thing can be said for our financial lives, too.

When we know that we have enough money to cover most contingencies, when we feel like there is enough good in the world to cover both them and us, we will be more likely to take the sorts of risks that lead to wealth.

d) Eventually, the biggest obstacle to creating wealth is your own contempt towards money and those who have made it.

This is again a condition that goes undiagnosed for a lifetime, all too often.

Our thinking around the subject is mired entirely in greed and fear. Even when you seem to sort out your relationship with money, the world never lets you be.

Finally, the one medium and long term strategy is to be a wise consumer of information in our culture of ‘never enough.’ Relentless messages about whether you are enough or whether your are doing enough takes a toll on the brain and the body.

Marketers, advertisers and others desiring to get you to buy, vote, share, or believe are attuned to the psychology of human behavior, and are aware that a scarcity mindset is a powerful force of influence that allows fear and shame to be the leading emotions driving your decision making process. confuse what you value by using the fear of disconnection and rejection as your guide on how to think and act. Who we chose to listen to, the thoughts we allow to take root, and the philosophies that influence us.

It is also important to watch who and what are you allowing to influence your thinking. Of all the cliches in the world, the truest is that idea that we are eventually the average of the five people that we spend our most time with

P.S: This piece was written over a month involving over 30 hours of research, writing, editing and integration. If you found it useful, please consider ‘clapping’. You can clap upto 50 times. The more you clap, the easier it will become for other readers to discover this piece.