Scarcity and Abundance: Escaping the Scarcity Mentality

Recently, Barrie left a very interesting comment on The Simple Dollar Facebook page:

I’d love to see something about scarcity vs abundance. I can’t seem to escape the scarcity thought bubble.

The ideas of scarcity and abundance have bubbled under at The Simple Dollar for a very long time. Now’s a great time to talk about these ideas head on.

The terms “scarcity mentality” and “abundance mentality” were coined by Stephen Covey in his best-selling book The 7 Habits of Highly Effective People:

Most people are deeply scripted in what I call the Scarcity Mentality. They see life as having only so much, as though there were only one pie out there. And if someone were to get a big piece of the pie, it would mean less for everybody else.

The Scarcity Mentality is the zero-sum paradigm of life. People with a Scarcity Mentality have a very difficult time sharing recognition and credit, power or profit – even with those who help in the production. The also have a a very hard time being genuinely happy for the success of other people.

The Abundance Mentality, on the other hand, flow out of a deep inner sense of personal worth and security. It is the paradigm that there is plenty out there and enough to spare for everybody. It results in sharing of prestige, of recognition, of profits, of decision making. It opens possibilities, options, alternatives, and creativity.

If you’re in the workplace and find yourself getting depressed because someone else got a raise, you’ve probably got the scarcity mentality. On the other hand, if someone getting a raise gets you excited because that means there’s a possibility of you getting a raise, that’s the abundance mentality at work.

If you’re at home and find yourself envious of some gadget someone else has because you don’t have one, you’re probably falling into the scarcity mentality. If you’re happy for a friend because they have something they want and you’re also content with your own possessions, that’s probably the abundance mentality.

To me, the biggest difference between the scarcity mentality and the abundance mentality is that the scarcity mentality cares what other people have, while the abundance mentality doesn’t.

It almost goes without saying, then, that having an abundance mentality is incredibly useful when it comes to personal finance.

How can you cultivate an abundance mentality if you’re stuck in a scarcity mentality rut? Here are four suggestions for doing just that.

Active thinking
Whenever you find yourself falling into a “scarcity” trap, where you find yourself jealous of the things other people have, stop. Ask yourself how exactly that other person having something great is preventing you from having something great. Virtually always, it’s not.

Put effort into actively thinking about the situation you’re in instead of falling into the idea that someone else’s fortune or misfortune directly relates to your own fortune or misfortune.

Conversational choices
When you’re talking to someone else, don’t spend your time talking about the things other people have. Instead, focus on getting to know each other instead of getting to know each other’s scarcity mentality.

Share frugality tips. Ask the other person about what they have accomplished lately. Ask for help on areas in your own life where you’re needing some guidance. All of these areas are great sources for conversation that do not encourage the scarcity mentality.

Personal growth
When you’re alone, focus on activities that promote your own personal growth. Work on things that build your skills. Practice the personal activities in life that bring you happiness and joy, not just things that fill time and allow your mind to wander to the things that others have.

An evening spent learning something new or improving your skills at something you enjoy is an evening wonderfully spent.

New relationships
If you’re finding the above things difficult, seek out a new crowd and a new social environment. Completely change the way you spend your free time.

One great way to do this is to join a volunteer organization. Volunteer organizations are a great place to meet people with an abundance mentality. Another place to start is to look for outdoor activities sponsored by your local parks and recreation department, which provides a good way to simultaneously meet people and get in better shape.

The more you adapt your mind to an abundance mentality, the easier it will be to break free of a sense of constantly comparing yourself to others and having a constant need to “beat” those around you.

There really is enough for everyone.

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21 thoughts on “Scarcity and Abundance: Escaping the Scarcity Mentality

  1. Annie Jones says:

    What a wonderful post! I had not previously heard of the “scarcity mentality” and the “abundance mentality”. I have an abundance mentality; these terms go a long way in understanding why some people are so hung up on, and competitive about, acquiring things.

  2. Kathleen says:

    Interesting stuff, but Covey hardly coined the terms or first explained the concepts.

  3. Roberta says:

    Thoughtful analysis. One area in which I used to fall into the scarcity mentality was that of culinary tools, gadgets and glassware. I have coveted for instance a set of All-Clad cookware, food processor and any number of other things. Since, however, I’m trying not to buy things that I absolutely don’t need, I am not planning to buy those things now.

    So, part of the way that I converted my scarcity mentality to abundance mentality is borrowing. A friend of mine who is a bachelor but has an amazingly well-outfitted kitchen for his mom’s use when she visits from out of state, lends me small appliances when she’s not here such as an electric mini-chopper and a Cuisinart ice cream and sorbet maker. He wouldn’t be using them anyway, and I have them in my kitchen for months at a time, sometimes 6 or longer, and he gets some kudos at the table when I use his appliances to make something good.

    Other friends bring martini glasses over, or other items if I need them for a dinner I’m preparing. They’re enjoying the dinner and are only too happy to contribute by lending something that I don’t have.

    Well, that’s just one area in life that I’ve made this shift, but it has worked really well for me.

  4. Jeanette says:

    Having read a lot about the “scarcity mentality” over the years, I’ve never run into the definition you use from Covey. In fact, I find that it does not match what I’ve read in many other sources on finance and scarcity.

    In fact, many people we’ve known with scarcity issues are among the most generous and giving people. They would do without for themselves, for example, to be able to give gifts or do stuff for others. They are generous with others, but not themselves.

    They don’t envy others, they give both praise and recognition to others. In business, they are often the champions who fight to ensure that people are treated fairly and paid fairly. They are not the ones with entitlement issues. What they don’t value is themselves. THey don’t see themselves as deserving and as a result often find themselves in situations where their own insecurities affect their ability to get what they rightfully deserve in relationships, income, etc.

    If anything, they see themselves as “less than.” It’s not about other people.

    They don’t see themselves as either worthy or deserving, whether it’s of love or material things, including money. They devalue themselves on many levels. In many ways, obvious and not. (Some very successful–external–people often have scarcity mentality.)

    folks with a scarcity mentality often come from very tough backgrounds, where money, love, affection were either absent/withheld or non-existent.

    Resources (whether housing, food, clothing, etc.) were limited and individuals were made to feel that they did not deserve things, even the basics of life. They see how difficult if not impossible it was to get what they needed and that repeats in their later experiences.

    The “scarcity mentality” is a much more complicated scenario than depicted here. Sorry, Trent, but you’ve taken a complex issue and over-simplified it, and not all that accurately IMHO.

    And FYI: There’s a downside to the abundance mentality. In some people it is often translated into entitlement. Very fine line sometimes.

    I’m not sure which is worse: People who think so little of themselves or people who think they deserve everything.

    The main idea behind abundance is that the world has what you need and you can access it.

    Scarcity on the other hand, is where you believe that the world can never provide you with what you need, whether love or money or stuff.

    As you think, so it influences your behavior and choices and thus influences outcome, one way or the other.

    It reminds me of people who came from very well off families with a secure financial history. These folks tended to believe things would work out, and regardless of their behavior, it usually did.

    On the other hand, folks who came from backgrounds with emotional abuse, limited resources, while some overcame them, most succumbed to the negativism and lack of support around them.

  5. Julie says:

    I still have that “I’m never going to be able to read that book again because the library doesn’t have it!” mentality. For a long while I *wasn’t* buying books new, but did collect a lot of Stephen King book. And my, does he have a lot of books. Before I completed the collection, I took a good look at the shelves and realized, he’s a best seller. His books are ALWAYS going to be available. I don’t need to have every.single.book. he’s written just in case I want to haul it out. I’ve gotten rid of about half the books. And a bunch of *other* books that I realized I was only holding onto for sentimental reasons (I bought Piers Anthony in high school, and now his writing skeeves me out, frex). Out they went. Now, I have to get rid of more of them to make room for new stories and writers. From the library!

    *from a former book hoarder*

  6. Annie Jones says:

    So funny, Julie, that just this morning I was looking at my bookshelves and the exact thought crossed my mind. I have bought and kept Stephen King books (used, never new) because they are some of the few books that I’ll actually re-read. Like you, I realized there’s no shortage on SK books. I can get any of them from our library system any time I want them. My copies are now in my donation pile. :)

  7. moom says:

    OTOH too much of the “abundance mentality” can mean thinking you can spend without limit because there will always be ways to make more money etc. Isn’t frugality the opposite of the “abundance mentality” in some ways?

  8. kristine says:

    This post deals with emotional attitudes, not traditional economic definitions.

    Scarcity is the cause of most wars. Aggressive actions may be cloaked in pretense of ideology, but if you examine them dispassionately, they are usually fought over resources, with ideology used to manufacture consent. No one wants to think they are killing people to sustain a standard of living.

    Abundance and scarcity are standard historical terms for centuries now, Anything that is finite can lead to actual scarcity if not used sustainably. Money, however, since no longer on the gold standard, can be seen as abundant, as it can be printed at will. Consequences are another matter.

  9. deRuiter says:

    Dear Roberta, Get thee to some yard sales, estate sales, flea markets! Have run three estate sales in the past four weeks, and unloosed All Clad pots and pans, Visions Cook Ware by Corning, and food processors, onto the resale market. You may not find a complete set of All Clad, but no one needs the complete set, you buy (gently used) the sizes which you will use, and don’t waste valuable cabinet space using the sizes you don’t ever need. Have also sold beautiful expensive, top of the line mixers for $20. and $25., the $300.+ ones, ice cream freezers, bread machines, yogurt makers, all sorts of kitchenware which seemed like a good idea at the time to the buyers and is now available at sales for pennies on the dollar. The market of gently used goods is massive in America, and you can have all those expensive gadgets for a pittance and a little time hunting. Resale is good for your bank account, good for the environment (selling an existing object instead of manufacturing) great for our balance of trade because the money goes to an American instead of China, and an entertaining way to spend a few Saturday mornings while meeting new people.

  10. krisitne says:

    I think the abundance/scarcity for frugaliers hits on the age old balancing act between being prepared/not wasting and over-accumulating for reuse.

  11. Jane says:

    Sometimes you can find All-Clad for cheaper at TJMaxx. I scoffed at the $200 All-Clad stockpot my husband registered for when we married, but five years later I have to say it’s a great pot and one we will have forever. Shopping at estate sales for this stuff is a great suggestion.

    I bought the Cuisinart ice cream maker this summer and had terrible luck with it (ice cream wouldn’t thicken). Now it’s jut sitting in my basement hidden on a shelf so I won’t feel annoyed about the money I spent on it.

  12. As true as this is it really is an ingrained mentality in our culture. I have worked for companies that teach Covey’s 7 Habits only to have the opposite ingrained in their promotion systems!!

    Although change starts with you it is hard to become one when the environment around you encourages the opposite.

  13. Aerin says:

    Moom, for me frugality is the opposite of scarcity mentality. For me, living in an attitude of abundance includes being aware of the abundance I already have in my life, and cultivating gratitude instead of want. My frugality also comes from my desire to be a good steward of the earth and not overconsume or be wasteful. I already have so much – endless clean water, food security, shelter, work, family, friends, toys – that I really try to be aware of “wants vs. needs” and spend mindfully.

    When I put a little extra effort into making something instead of buying it, or re-use something I already have, or not buy the latest version of something because I already have a gadget that meets my needs, I am celebrating the abundance in my life.

  14. Steve says:

    Resources are finite. Wealth is not. Working together a group can create something; that something has value (utility) and increases the total wealth of society. Basically, making the pie bigger – and then the group can ideally get the lion’s share of that to distribute amongst themselves. Where the abundance mentality comes in, is that by sharing openly amongst themselves, the group can work together on building something of value, instead of spending their energy working against each other to get a larger slice of the pie. Working together makes the pie bigger, working against each other actually can make it smaller. That’s why an abundance mentality is so powerful.

  15. Maureen says:

    Thank you so much for this post. I had not heard the scarcity and abundance mentality terms. And Generation Earn is perfect for my college grad nephew this June! I always appreciate something in this post. Even when I already know a topic, your thoughtful coverage raises it in my conciousness so it can percolate throughout my life more thoroughly. Thank you.

  16. J. Davenport says:

    In my line of work (car sales) most of the guys work with a scarcity mentality. I can work with an abundance mentality, because I’ve been around long enough to have my own pie that virtually no one else gets to dip into. I was trying to find terms for this idea, thank you for helping me do that!

  17. kristine says:

    I would like a real world example of making the pie bigger. And I want clarification- national pie, local pie, or global pie? If global, it would be hard to make the pie bigger. You can aspire to make the pie as big as you want, but you only have so much flour. Frankly, I am wary of any wealth process that is completely divorced from resources. If something is to be produced, you need resources. If resources are irrelevant, than things are just being moved around, and nothing created.

  18. Wink says:

    I’m with MOOM I was thinking the opposite of this article. I think that the scarcity mentality makes a frugal person, i.e. the children of the depression reducing and reusing every item they had. I also think these people tend to be more generous than wealthier people. The abundance mindset leads to the excess of over consumption. Studies have shown that as availability of resources increases so does consumption.

  19. Roberta says:

    Thank you #8 deRuiter. I wasn’t aware that I could find things like that at those sales. Thank you again for letting me know. Of course I don’t need a whole set of pans! You should see the bizarre mashup of pots and pans I have now–and for the most part they work just fine. I actually did receive one all-clad pan as a gift from my sister a few years ago and I love it and use it a lot. I will definitely get out to sales though because there are some things I need (or is it want?).

  20. “Ask yourself how exactly that other person having something great is preventing you from having something great. Virtually always, it’s not.”

    I’d go even further than this statement. Get past any feelings of jealousy or any psychological baggage and approach that person for advice. You will increase substantially your chances of achieving similar success.

    Dan
    Casual Kitchen

  21. Evan says:

    I’ve read this in a few places recently and I think it’s a refreshing change from all of the frugal budgeting advice that seems to be everywhere. Of course things like the ‘latte factor’ can make a difference when you’re struggling, but rather than focusing on cutting back and cutting back, thinking in abundance and putting your energy to ‘out-earning your problem’ is a much healthier and exciting way to live.

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