Do you constantly worry about not having enough money? Are you afraid to spend on things you want or need? This feeling of lack or limitation is known as a scarcity mindset, and it can seriously sabotage your finances. The good news is you can cultivate an abundance mindset instead: This involves focusing on all that you have instead of what you don’t. When you embrace the idea that you can achieve financial security in your life, you’ll be in a better position to make sound financial decisions. Here’s how you can get out of the scarcity trap and create a healthier relationship with money.
Heal your past relationship with money
In many ways, making a budget is only a surface-level solution. It’s tough abiding by a budget when there’s an unresolved emotional root of your money troubles.
Your relationship with your finances runs deep—it’s never as simple as being “good” or “bad” with money. One place to start is by defining your relationship with money. Ask yourself: How were finances handled growing up, and how did you feel about money once you became independent? You might have a lifelong scarcity mindset, one that’ll take serious work to untangle. The key is that in order to change the narrative, you need to get a better understanding of what that narrative looks like now. For more, check out these steps to start healing your relationship with money.
Give yourself permission to spend on priorities and things you genuinely enjoy. Spending money aligns with an abundance mentality when done consciously. Note how it adds value to your life.
Forming a healthy relationship money means indulging thoughtfully. Ask yourself, “How do I expect this purchase will make me feel? What do I want it to make me feel? What feelings am I trying to avoid by buying it?” Allow yourself to indulge, especially if these indulgences improve your overall relationship with money.
You can’t avoid spending money altogether, so learn how to do it without shame (the same shame that only keeps the scarcity mindset in control). Here are some more concrete tips to become a conscientious spender.
Overcome your fear of debt
Sure, debt is a scary word. But not all debts are created equal, and a blanket fear of debt will hold you back from achieving an abundance mindset.
If you want to buy a home or a car, or make pretty much any major financial move, you probably need to get used to debt. And if you’re borrowing money for an asset that will turn a profit in the long run—like investing in real estate or a small business—your debt has the potential to significantly enhance your finances. Here’s our guide to getting organized to pull yourself out of debt.
Celebrate small wins
Note any financial success. Did you stick to your budget or save a little extra this month? Pay off a credit card? Instead of minimizing achievements, acknowledge and reward them. Small wins add up, and you may find your finances aren’t as bad as you think.
Stop comparing yourself to others
Everyone has their own story. It’s no use comparing yourself to a friend with generational wealth or your sibling with a higher-earning job. The only thing you can do is focus on what’s in your control. In a practical sense, that means creating and sticking to a budget. But in a deeper sense, it means keeping your eyes on your own paper and shifting from a scarcity to abundance mindset.
If your relationship with money is weighing you down, something needs to change. Consider finding a financial therapist. Financial therapy combines financial advice with psychoanalysis, giving you a way to unpack the emotional or behavioral barriers to your financial well-being.
Ultimately, these tips to go from scarcity to abundance aren’t just so you feel better. Your approach to money is key to building wealth. When you feel confident that you’re spending only on things you love and not wasting money on things you don’t, you will make much better financial decisions for yourself.
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