Shifting Your Money Mindset from Scarcity to Abundance

Because this post is going to border on spiritual, I want to make this fat, practical disclaimer first: I am arguing that it is more economically advantageous for you to embody an abundance mindset. Regardless of your belief system, this will get you farther ahead.

Ok – let’s dive in.

The best example I can think of for scarcity vs. abundance mindset are two of my friends – and after I describe their personalities, you’ll probably be able to guess which friend is now more of an acquaintance. You’ll also probably be able to guess which one has become more abundant in her financial situation.

These friends started out in financially similar situations with comparable salaries.

But when I’d go grab a few things at the store with one of them, we’d no sooner have exited the threshold of Kroger’s automatic doors than she’d Venmo request me for half the amount. “Scarcity Mindset Friend requests $5.12.” You know the type. Sometimes it’s good to be on top of your Venmo requests so people don’t forget, but there’s usually some level of “It’ll come out in the wash!” that’s mutually agreed upon in friendship.

The energy around the behavior was urgent and untrusting – if I’m not in control of this $5.12, I’ll never get it back because you’ll forget or you won’t want to pay me back and I need this $5.12 because my paycheck isn’t for another week and and and and –

This stream of consciousness leads nowhere positive, because the energy is negative. And at the risk of revealing my true status as an aspiring Woo-Woo McGee, the more you emit these radio waves of I don’t have enough, the more you create situations in which that becomes true (but more on that in a little bit).

Now let’s take a peek behind Door #2, on the other end of the scarcity/abundance spectrum.

This friend insists on treating you. Coffee after class? She’ll physically block you from the cash register so she can cover your nitro cold brew. Insist you don’t want anything? She’ll come back with a venti version of whatever she got and hand it to you, smiling. You get the sense with this friend that she’s absolutely not keeping score.

While you could spin this case study a few different ways, it’s my go-to example for scarcity vs. abundance because I became friends with the woman behind Door #2 after being accustomed to the prior nickel-and-diming method of navigating the financial ebbs and flows of life. “I brought wine to a party and you had two glasses? Well.. aren’t you going to Venmo me for that?”

So one day (during a coffee date), I told her: “You are so generous.”

“It’s abundance mindset.”

* record-scratch *

I don’t know what that is, but it sounds made-up, I thought.

Abundance mindset is the belief that you have enough – and not only do you have enough, but you will always have what you need. It is, in its truest essence, a trust and belief in yourself and your ability.

In the next few years, I observed different paths for these two individuals. One of them has stayed more or less stagnant in their financial standing and career trajectory, gripping the reins tightly – and the other has seen exponential growth in her income and potential.

You could (and probably will) argue that this anecdotal example is a shallow coincidence, but I’d love to invite you to think of people in your life who fit these same archetypes. I would be willing to bet those who walk through life with an attitude of abundance are exposed to more opportunity than those who do not.

Why does an abundance money mindset actually create more abundance?

It’s certainly not superstition – instead, it’s the qualities of openness and generosity that predispose you to better opportunities, an expanded network, and a bias toward risk and action.

Think about the microcosm in the example above: Which friend would you be more inclined to treat for lunch? Which friend do you think you’d rather travel with? If you were given the opportunity to attend a free event and could bring a plus-one, which one would you call?

To quote my Catholic elementary school education, when you give of yourself to others, they will give of themselves unto you. (Or something like that – it’s like the golden rule meets ECON 101, with a grammatically dense twist.)

That same energy that dictates the small, person-to-person level interaction governs the way the rest of the world interacts with you, too.

Think about the way you’d apply an abundance mindset or a scarcity mindset when it comes to investing: You notice you have a few hundred dollars left over at the end of every month that hasn’t been accounted for in the Save & Invest tab of your budget yet.

The scarcity mindset looks at this and says, “I might need that later. I’m going to keep it in checking just in case something comes up.”

The abundance mindset says, “Wonderful. I’ll increase my automatic transfer to general investing – clearly I’ve outgrown my old expectations for myself, and it’s time to level up. There will always be another paycheck.”*

*The personal finance Mother Hen in me feels the need to disclaim here that, in this scenario, both examples already have emergency funds. This is truly leftover money that they could either hoard or invest.

The abundance mindset is quick to recognize when it’s time to grow, take a risk, and pursue more – because the foundation is trust that there will always be enough.

You show up differently for life when you believe there’s an abundance of wealth and opportunity waiting for you. Remember “self-fulfilling prophecies” from high school literature? Turns out it’s a thing in life, too. You’ll bounce back faster from disappointments, you’ll become more psychologically resilient, and, as a result, put yourself out there faster and more frequently if you believe good things are in store for you.

Since so much of career growth and wealth-building is about having time and consistency on your side, it behooves you to adopt an aggressive strategy that allows you to pack more into each and every year of your life. You can’t pack very much in if you’re feeling bad for yourself and intermittently swearing off LinkedIn because you didn’t hear back from a company.

The scarcity mindset says: “I’ll never get a job better than the one I have now, so I’m not even going to try.”

The abundance mindset says: “I must not have gotten that job because something bigger and better is waiting for me – I better go start pursuing that bigger and better thing with even more tenacity, because this rejection is proof that it’s out there. Otherwise, I would’ve gotten this job.”

How can a scarcity mindset hold you back?

The irony of a scarcity mindset is that it’s self-defeating – the counterintuitive goal of scarcity is to protect you from failure. And with the walls that you build around your checking account to keep everything sealed in water-tight, you inadvertently shut out more.

A scarcity mindset is the white-knuckle grip that tells you if you let go for even a second, everything will disappear – that you’ve built a precarious house of cards that you need to relentlessly guard.

Of course, most of us know that growth – and not incremental, inch-by-inch growth, but exponential growth – requires taking calculated risks. Someone who believes there’s a metaphoric safety net underneath them will almost certainly jump with more faith and confidence than someone who does not.

This shows up in our career paths, in our approaches to money (I can’t even begin to tell you how often I hear, “I would invest, but I don’t want to lose money!” to which I say, “Well, you’re certainly losing money allowing your cash to drop by 2% in value to inflation every year in your savings account!”), and in our relationships.

The direct correlation between our relationships and our success

I wish we could amend that saying, “It’s not what you know, it’s who you know,” to say, “What you know only matters if people want to be around you.”

In other words, as much as we’d all love to sink under the covers and bask in the blue glow of Hour 7 of an HBO Max binge and turn the iMessage notifications off forever, your success – to some degree – hinges on likability.

Think about your own work and life for a second, and think about some of the most magnetic people you know. I’d surmise they’re doing pretty well for themselves. That’s because businesses are made up of human beings, and human beings like to be around people who are generous, charismatic, and cooperative.

Combining competence (read: a generally above average level of talent) with a likable personality will almost certainly take you farther in life than JUST a lot of talent. You can point to anomalies; glitches in the matrix who people love to exalt as proof that this isn’t true (Steve Jobs, Mark Zuckerberg), but there’s a reason there are only a handful of names that come to mind.

You know whose names probably aren’t coming to mind? The names of the other 498 CEOs in the S&P 500 who aren’t freakish super geniuses, but instead people who were good at their jobs and generally likable people.

This is good news for most of us who are going to have an easier time developing traits like “generous” than we would joining the ranks of 1%-level intellect.

This is also why the woman who insisted she treat me to coffee and would stop on our walk to Starbucks to pop into three different storefronts to say hello to someone she knew went from making $38,000/year to $10,000/month in four years – because her abundance mindset allowed her to trust her instincts when a different industry welcomed her in, and she nurtured the relationships within it enough to become her own self-employed brand.

It all starts with believing it’s out there for you

…and that’s why this topic often has spiritual underpinnings – but I want you to know that it doesn’t have to. Yes, you’ll probably have an easier time believing that an abundance of opportunity awaits you if you believe there’s something out there in the universe bigger than you that’s leaving you breadcrumbs to guide you forward on your path, but you could forego that line of thinking entirely and still employ this methodology: Self-fulfilling prophecy is merely the principle that you create your own reality. Generosity begets generosity. Lack begets lack.

Of course, I think it’s more fun to believe in breadcrumbs from the universe. This is how I think of the “great mystery” – as a literal mystery, or puzzle I have to solve for myself. What does it mean that some concept has come into my consciousness four times today through different avenues? Why do I have the urge to go this way to the studio instead of that way? Where’s this instinctual pull to reach out to that one woman coming from, and am I going to listen to it?

You can take the idea of abundance magic as near or far as you’d like to, but I ask you this: What do you have to lose? What would it hurt to trust, even if just for a little bit, that you’re on a path to wealth and abundance, and behave accordingly? What jobs would you apply for? What opportunities would you pursue? Who would you talk to?

As you look back on the last few years, I’ll bet you can see how each opportunity – and sometimes, how one, single choice – led you down a completely different path. There are probably some instances in which your life would be completely different had you not done that one thing, for better or worse. If you let the energy that guides your decisions come from a place of abundance, I bet you’ll identify more opportunity and choose differently.

It’s not woo-woo if it makes you rich, right?