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.
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.
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.
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.
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.