How to interrupt free from the scarcity mentality and construct financial confidence

An emotional, fear-based response, a mindset of economic scarcity, often causes people to fall down a rabbit hole of overthinking, believing that they’ll never have the funds for to live comfortably and that they’ll all the time be stuck in some form of economic turmoil. This mindset can impact long-term financial well-being and quality of life, experts say.

Why Your Money Mentality May Be Holding You Back

“Mindset plays a very big role in keeping people in the financial situation they are in,” said Jeri Bittorf, financial wellness coordinator at Resolve Counseling Services Canada. Bittorf said she often encounters clients in her industry who’ve a scarcity mentality. Sometimes people fear that they’ll never give you the chance to earn more or reduce their expenses and that their situation won’t ever improve.

This emotional response often stems from some kind of trauma surrounding money, said Kalee Boisvert, financial advisor at Raymond James Ltd. It could stem from childhood experiences, corresponding to growing up in poverty, but it could possibly also arise later in life from a perceived lack of resources or from hearing stories of individuals around you who’re unable to pay rent or afford groceries, Boisvert said.

“Sometimes this lack of money is due to stories that people have heard and almost made their own, or the fear of it,” she said.

Boisvert recognizes the warning signs of a scarcity mentality in her clients when she hears comments like, “I’m bad with money; I’m afraid I’ll never be able to retire; I should do a better job or do more.” That’s “the money shortage mindset working in the background,” she said.

Boisvert said this mindset can result in issues with confidence and self-esteem, which eventually affect on a regular basis decisions about jobs, chosen partners or where to live.

Understanding your financial past is the important thing to changing your financial future

Bittorf said it is important to get to the basis explanation for this mindset and that journaling plays a very important role in uncovering patterns and beliefs around money. “I start them at about the earliest age I can remember, like five years old,” she said.

Bittorf uses quick questions on financial security growing up, corresponding to whether their parents talked about money, whether or not they experienced financial struggles at home, and whether or not they slot in financially at college. “I want you to think about all of these things because they will influence the decisions you make now, even if you are not aware of them,” she said.

The article continues below promoting

Sometimes Bittorf encourages her clients to create vision boards about what they’re obsessed with and what their future self will appear to be with an abundance mindset. This creates the thrill of pursuing these plans. “If they were to get out of this living situation, what are the goals?” She would ask customers.

Building wealth through mindful money habits

While breaking down financial patterns is important, Bittorf says it comes right down to real steps, corresponding to making a budget, tracking money and breaking down broader financial goals into smaller, actionable steps. That also means making some tough decisions, like cutting expenses if vital or changing jobs. “You know you’re strong enough to do this. And there’s a lot of support out there,” Bittorf said.

For Boisvert, breaking out of the scarcity mentality was a conscious effort on her personal journey. If she hadn’t freed herself from this mindset as a toddler, she believes her response to money would have been to save lots of and put the whole lot away as an alternative of focusing her spending on what she really cared about.

“Knowing that I grew up with the scarcity mentality that I had to work really hard to overcome, when I talk to (my daughter) about money, I just say that money is a tool and it’s a tool that helps us accomplish things,” Boisvert said.

For those stuck within the cycle, she suggested separating fact from fiction and practicing gratitude. “When you feel that anxiety and fear and you look at the numbers and you have the money to pay the bills and the rent, it’s just a matter of reminding yourself, ‘Well, right now I’m safe. Is this an old story that’s coming back to me?'” Boisvert said.

Read more about budgeting:

Via Canadian Press

The Canadian Press is Canada’s trusted news source and a frontrunner in delivering real-time reporting. We provide Canadians with an authentic, unbiased source based on truth, accuracy and timeliness.