Information about so-called scarcity mentality (a term apparently coined by Stephen Covey), abounds online, in the self-help section at the bookstore, and in coaching and classes.
A scarcity mindset is often described as a belief there is simply not enough to go around, or a focus on lack, or living from a limited source. “People with a scarcity mentality tend to see everything in terms of win-lose. There is only so much; and if someone else has it, that means there will be less for me.” is a quote attributed to Covey.
There are many opinions about scarcity mentality. Do you recognize any of these?
- It’s all in your head.
- It’s just fear.
- It’s low-vibe…and if you keep thinking this way you’ll stay trapped in scarcity.
- It’s the result of your core beliefs.
Here are some of the cures recommended for the scarcity mindset:
- You have to change your thinking.
- You must believe there is enough to go around.
- Stop grasping for more and focus on what you have.
- Surround yourself with people who have an abundance mindset.
- Choose or create a positive money mantra and keep repeating it
- Step in and out of running water (a prominent manifestation coach recommends this)
- Repeatedly listen to songs about having a lot of money and you will be blessed with cash (another well-known manifestation coach recommends this)
Of course we want to be able to exercise influence over our earning capacity and our money. These cures–or the thought that there can be a cure–is empowering.
The issue is that, while the idea of control can feel empowering, the corollary to individual control is that if you’re not in abundance, it’s your fault.
You’re not listening to enough songs.
You need to choose to see opportunities.
You need to pray harder, or step in and out of running water more frequently.
I’m not against any of these tactics.
Whether or not they will work is a question of nuance.
For just one example, the more we train ourselves to see or think a certain way, the more likely we are to experience a shift in that direction.
We can’t bypass our body’s survival instincts and the specific psychology that accompanies that survival imperative.
“A scarcity mindset is a belief there is simply not enough to go around.”
But that belief–as with all beliefs–has its origins in experience.
“Someone with a scarcity mindset focuses on the lack of things.”
But for humans, whose nervous systems are focussed on survival, focusing on what we don’t have and need to get, is a survival issue that quite rightly can elicit anxiety or even fear.
“A scarcity mindset can hold you back because you don’t see the endless opportunities around you.”
Much scarcity mindset advice treats the mindset and related behaviours as if they are choices. In many cases we literally *can’t see them* because of the effect of scarcity–either real or perceived–on the nervous system.
Entrepreneurs, especially in start-ups and micro-businesses, find themselves faced with limited cash flow–in other words, actual scarcity–and find themselves in a fight/flight response.
Scarcity feels like a survival issue–and it is.
It’s important to acknowledge that access to privilege (which means scarcity is less present in your life) makes it easier for you to use these “mindset” techniques because your mind isn’t working under the influence of scarcity psychology. Access to privilege also shapes your success.
It’s also important to note that we live in a society that evokes, scarcity and anxiety in us even when our personal financial situations are fine.
Our economic system encourages and is based on competition, and the very experience of competition is based on the idea of scarcity, of not enough.
Extractivism and capitalism are focussed on profit and money over everything, including humans, so that puts us in a state of threat as well.
The human brain’s inevitable response to threats to survival is to engage the sympathetic nervous system and the range of threat responses that include (but aren’t limited to) the fight/flight response.
What is the scarcity mentality and how does it develop?
Conditions of scarcity (in money, time, etc.) produce their own psychology and affect your behaviour.
Growing up in poverty—in material scarcity—is linked with behavioral and mental health issues. Being raised in scarcity literally changes your brain.
Experiencing lack of any kind (food, housing, income, time, love) in childhood or as an adult can be traumatizing.
It’s important to recognize that if that was your experience, positive thinking or abundance mantras, etc. alone will not be sufficient.
In this case, trauma therapy is the key to an abundance mindset.
Conditions of scarcity (in money, time, etc.) produce their own psychology, even if you aren’t a trauma survivor.
So even if you haven’t experienced a time when your basic survival needs weren’t met, conditions of scarcity (in money, time, etc.) will still produce their own psychology and affect your behaviour.
Scarcity psychology produces characteristic behaviors.
Scarcity in this case means scarcity of any resource, including the perception that there isn’t enough (of anything) as well as the lived experience of lack (of anything: time, food, money, connection etc.)
The brain reacts to both.
It’s also important to note that comparison (such as we can experience through social media) can evoke a scarcity mindset.
Comparison is a behaviour that arose from early survival needs. We needed to determine whether or not we belonged to a group because survival depended on community membership.
Comparison is a cognitive process that happens almost automatically, and is exploited in sales psychology. When you have a sense that all these people have something (success, beauty, a fast car, etc.,) and you don’t, it evokes scarcity mentality, making you feel uneasy and anxious, and those feelings can lead to certain behaviours.
It seems scarcity does the same thing trauma does: elicits fight/flight/freeze/appease behaviours.
Scarcity is actually a real thing, not just a “mindset.”.
Scarcity evokes fear because it’s a survival issue.
This fear is here for a reason: to tell us to pay attention to something.
It is also true that scarcity psychology can be a trap: scarcity perpetuates scarcity because of the characteristic behaviours it elicits.
How scarcity affects the mind
Flip your lid
Scarcity is read like a threat by your body and nervous system.
When a threat is perceived, the body-mind’s threat-response system is activated. This is beneficial, because we need to be mobilized in order to be able to respond.
The problem arises either when you never get to rest between mobilizations (which leads to burnout) or your nervous system becomes too mobilized and you flip your lid.
When you flip your lid, cortical function is inhibited. Your CEO-self is less accessible.
Your CEO-self is the part of the brain that supports creative problem-solving, taking in and synthesizing new information, focus, decision-making, and collaboration, among other things.
When your CEO-self is less accessible, your cognitive capacity is diminished.
This means you can’t access the skills you need as a business owners (to plan and organize, concentrate and manage focus, complete tasks, interact productively with others, analyze and process information, manage emotions and behaviour, remember details, manage time, and solve problems).
Scarcity’s impact on the brain leads to cognitive fatigue and diminished capacity.
We can call this a bandwidth tax.
Your cognitive carrying capacity, or bandwidth, is “taxed” by the constant demands resulting from slack, trade-off thinking, and opportunity cost.
Lack of slack
When we are experiencing scarcity, there is less slack.
You can think of slack in relation to travelling with only a carry-on bag. The capacity is small and you are extremely limited in what you can pack.
The less room there is, the more challenging and stressful it is to pack. You can’t just chuck anything in, and there is no room just-in-case things.
With money (as well as food, love and other resources), when you have slack (more room in the suitcase), the cognitive cost is lower.
Thinking is easier, and less focus and vigilance is required.
When you’re in scarcity, you have to think about every little aspect of the decision, because you have to make a little bit go a long way.
When you lack slack, in other words, when scarcity psychology is at play, you have to engage in trade-off thinking.
When packing, it’s: “Do I take runners or a curling iron?”
In business, it’s: “Do I pay myself or my contractors? Do I pay Hydro or the line of credit?”
When resources are scarce, you have to consider the opportunity cost.
“If I spend my limited liquid cash on this now, what will I be unable to access later?”
“If I spend this cash (or use this credit) now, what is it going to take away from in the future? What opportunity will be unavailable to me?
These three factors (lack of slack, trade-off thinking and opportunity costs) are the causes of bandwidth tax.
Because of the effects of bandwidth tax, we have less cognitive capacity.
The CEO-self is compromised.
As a result, we have less self-control and therefore are more likely to succumb to temptation.
In addition, there is another aspect of spending money on goods and services that are tempting.
Although the monetary cost is the same no matter how much access to cash you have, it is proportionally more expensive for the person with less money.
Because of this kind of disproportionate impact, basics turn into luxuries.
As business owners, this can act as a barrier to growth and to accessing the support we need for us and our businesses to thrive.
In tunnelling, the mind becomes focussed on whatever is scarce to the exclusion of most other issues or tasks.
We focus single-mindedly on managing the scarcity at hand.
When there is a threat, it is appropriate to maintain a sharp focus on what matters most at the moment. But in turn, we can neglect what falls outside of that vision, in other words, outside the tunnel. In the moment, that sharp focus is what’s needed, but we need a wider vision over the long term.
One example of tunnelling that occurs often in business: not taking time to eat because you’re working on a deliverable for a client deadline. Or not taking time to do strategic planning, because the day-to-day tasks are making you feel pressured to get them done.
When you are in the tunnel, the cost–of taking time to eat, of taking time to plan–is magnified. There literally is less time for your project now.
Tunnelling also minimizes the benefits of what you are putting off. Those distant long-term health benefits appear much less urgent.
In the moment that’s not a problem, but over time, with client deadlines daily or hourly, consistently not eating will undermine your capacity and well-being overall.
And when you’re not functioning at capacity, it’s hard to run your business well.
Tunnelling connects to goal inhibition, because if the goal sits outside the tunnel, it’s ignored.
The CEO-self skill of inhibitory control stops unhelpful automatic reactions.
It enables us to instead choose a better, more thought-out response that is flexible, creative and adapted to the situation.
When we are in scarcity, our CEO-self is offline, and we are more likely to engage in automatic, habitual behaviours and responses, which lack the creativity and flexibility we need.
We become hyperfocussed on current concerns and not the future, preventing us from reaching our long-term goals.
Focusing so much on the one thing that appears to matter the most in this moment makes you less able to think about other things you care about.
This is why when we’re in time scarcity, for example, we don’t move our large-scale, dream business projects forward.
How do we work with scarcity psychology so it doesn’t run the show?
Overcoming the scarcity mindset
Scarcity mindset doesn’t lead to poverty.
Abundance mentality doesn’t always equal positive cashflow.
Mindset and beliefs are psychological imprints (and sometimes trauma wounds), not choices.
They are the traces left in our bodies, minds and spirits of the harms or intense stressors we have experienced.
In order to have a mindset shift, you need to first see, acknowledge and heal the things (possibly trauma) that led to your current mindset/beliefs.
Scarcity can lead to mental health issues and it’s iImportant to note that, like all fear or threats in childhood, scarcity in childhood can leave a traumatic imprint.
If you’ve tried all the things and they just aren’t working, this is where working with a therapist first can make all the difference. (Click here to learn more about working with me to address money trauma,
In addition to therapy, here are some practices that can support you in addressing scarcity psychology so you can experience some emotional relief and bring your CEO-self back online.
Gratitude (It’s not what you think)
Gratitude practice in this context is not making a gratitude list.
Most often, with gratitude lists, people compile the list of things they think they should be grateful for (like good health, a home, a family, friends, etc.) and then beat themselves up for not feeling grateful in the moment.
Because of the mind’s focus on survival, it has a tendency to be “teflon for good and velcro for bad.”
Gratitude practice involves training the brain to include the whole experience, good and bad.
This widens your view, helps put things in perspective, and helps you experience more of the positive emotions.
The idea is not that the positive cancels out or eliminates the negative, but rather that the two are in their proper relationship to one another.
Gratitude practice, done right, helps bring your CEO-self back online and awakens the brain to the good that is all around, in balance with what might be missing.
Because gratitude practice in this context is experiential, here’s a recording I made of a guided gratitude exercise you can try.
Self-kindness (it’s also not what you think)
Self-blame is read by the body as a threat, just like scarcity.
When you’re in scarcity, and you add self-blame or self-criticism, it’s even more upsetting– not only emotionally but also to your nervous system.
Now we understand that scarcity elicits its own ways of thinking and behaving, and that these ways of thinking and behaving are not our fault because they are our organism’s attempt to survive and face the threat, we can say kind things to ourselves when struggling.
You can say something to yourself like, “Scarcity is a safety issue. My brain is feeling threatened. And of course it would, when it feels unsafe.” or “No wonder I’m “in the tunnel” right now. My mind is in scarcity mode.”
Important note: Unequal conditions are real. Many of us will be facing more intense and/or actual scarcity than others. When it’s the case that something concrete is going wrong and your physical safety is compromised, it can help us emotionally to remember not take it on as personal shame that we’re not good in our abundance mentality under these conditions.
It’s also very important to recognize and acknowledge the fear we feel about survival. Whether the threat is real or not, the fear itself is.
The very first step is to recognize and validate the fears, using the phrases above.
It can also help to get curious. Curiosity is an aspect of self-kindness and it alone can sometimes be enough to bring the CEO-self back online.
When you are curious, and you notice when scarcity psychology is affecting you, in the moment you can acknowledge it, and use supportive self-talk phrases such as “No wonder.” “No wonder I’m having trouble focussing on the big picture here. Scarcity psychology is affecting me.”
Curiosity and noticing can cultivate awareness so that when you are experiencing the effects of scarcity, you can help yourself or ask for support.
As a reminder, the effects of scarcity psychology include:
– Flip your lid
– Bandwidth tax
– Goal inhibition
– Lack of slack
– Trade-off thinking
– Opportunity cost
When you’re experiencing scarcity, you can come back to soothing the nervous system first, then ask for help/support to get grounded and curious so you can figure out what’s going on and address it.
If you want support to work with scarcity psychology and cultivate an abundance mentality, find out how to work with me here.