Is the ‘Scarcity Mindset’ Impacting Your Financial Success? Here’s How to Flip the Script

Sometimes, even if you have a steady paycheck—or an abundance of wealth—you can be gripped with negative feelings and all-consuming worry: What happens if suddenly I lose it all?

This type of pervasive financial stress has a name: Psychologists call it the ‘scarcity mindset’ and it speaks to the idea that, regardless of your level of financial security, you’re frequently in a doomsday thought pattern where you believe that at any given moment, that safety net could disappear.

The worst part: Even new financial successes, like paying off debt or getting a raise, don’t negate these feelings. No matter what, you’re in panic mode.

“The scarcity mindset doesn’t necessarily mean you’re a negative Nancy,” explains Pam Krueger, founder and CEO of Wealthramp, a network of fee-only financial advisors. “No one wants to be worried or fear-based, but women may tend to feel a bit more anxious about their finances, especially if they grew up with a parent—perhaps the dominant voice in the house—who always felt powerless about their cash.”

To flip the script, Krueger says you have to eliminate the self-talk that keeps you up at night. “Tell yourself that you have choices,” she says. “Pad your emergency savings and be clear with yourself and your partner about your debt-payment strategy.” She also recommends clients only look at bills when they’re rested and ready to look. “Say, on a Saturday over a cup of coffee vs. at the end of a long, stressful day at work.”

But if fear continues to prevail, Krueger swears by this daily spending habit: Use a debit card (not a credit card) for fun, flexible expenses. “Don’t deny yourself joy out of guilt or fear of spending, but spending money that you’re ‘borrowing’ only adds to the sense of falling behind,” Krueger says. A debit card gives you more control over your financial destiny and enables you to live in the present instead of spiraling about the future.