4 Useful Insights on Scarcity Mindset
The scarcity mindset doesn’t just apply to the economy. Sticking to a diet, being lonely, and feeling like you don’t have enough time, are all examples of scarcity. Not having enough of what you think you need leads to feelings of scarcity.
All forms of scarcity have the same effects on our minds. Being aware of these effects gives us the opportunity to take note of them and try to learn new ways of responding.
Let’s go over some of the ways feelings of scarcity inhibit us and how we can find better ways to work through the struggles.
1. Tunnel vision
One of the effects scarcity has on our brains is it creates tunnel vision. It creates a hyper-focus on the one area in which we are experiencing scarcity. For example, if you can’t pay your bills, all you can think about is how to pay them.
Borrowing money might seem like a good idea from inside the tunnel created by tunnel vision, but our vision is limited. We don’t see the long-term consequences of borrowing money and having to pay back interest.
Tunnel vision makes you forget things that you would want to remember.
We forget about next month's bills and then get overwhelmed when the new month suddenly appears in the tunnel.
2. Decrease in mental bandwidth
The second thing scarcity does to our minds is it decreases our mental bandwidth. In turn, this causes us to have poor impulse control and make bad decisions. We get tired and irritable. In the long run, it causes a decrease in productivity.
Following a diet or being too busy are two ways in which scarcity is sometimes a consequence of our own behavior. This is not always the case and not all scarcity has the same consequences and impact.
Poverty has a far more extreme impact on people’s lives, whether it’s in the developed world or the countryside of a third-world country.
Poverty may look different in different parts of the world but it has the same effects on people. When you’re not able to meet your physical needs for food, water and shelter, there’s no way you can lower the scarcity by adjusting your needs.
This means apart from the typical struggles that come with poverty, these people also suffer from tunnel vision and decreased mental bandwidth. This makes it almost impossible to escape the vicious cycle of always being one step behind.
Two people can make the same amount of money, but the one who has to pay off last month’s loan is already behind and now has to get another loan.
In some cases, there is something we can do. There’s limited time and money for everyone in the world.
A lot of scarcity is a consequence of our behavior during times of abundance.
3. Budget even in times of abundance
Abundance usually precedes scarcity. We have too little because we were inconsiderate when we had relative abundance. The more abundance we have, the more we waste.
When we have a deadline in four weeks, it feels like we still have a lot of time. We waste our time, and when we only have one or two days left, we panic and start to do the work. This leads to bad quality work and insufficient time to fix mistakes.
When we get paid once a month, or in the case of many farmers, once a year, there seems to be an abundance of money all at once. This money could be enough for the entire month or year, but when there’s an abundance, we are inefficient.
When we have slack on our budget, we waste our money on things we don’t need. Saving money is not the first thing on our minds. It doesn’t feel like you are giving up on something else when you’re buying something.
The more slack you have in your budget, the more money you have with no destination, and the more wasteful you become.
It's good for your mental bandwidth to create some slack. A good balance can be found when we include savings in our budget. It leaves room for mistakes and setbacks and prevents us from having too much money without a destination.
When we have little bandwidth, it is difficult to control our impulses. We become more vulnerable to impulse purchases. With a smaller budget, it becomes more important to stay away from impulse purchases.
It’s best to create situations in which it’s easier to stick to your plan. You can’t rely on willpower in situations where you have low bandwidth.
4. Minimalism as a solution to the scarcity mindset
Minimalism can be a tool to handle scarcity in your life. Minimalism can provide you with more slack in different ways.
By decluttering and only keeping what you need, you become more aware of all the unnecessary purchases you’ve made in the past.
That awareness will make it easier to control impulse purchases in the future. It will help you save money which will give you more financial slack.
Minimalism will help you define your priorities which will help you manage your time in a way that is balanced. Living without any sense of scarcity may make us waste time and resources. It’s all about balance and boundaries.
Scarcity mindset
Being aware of how feelings of scarcity affect our brains can help us to better manage our emotions and our money.
Budgeting even during times of abundance and adopting some minimalist habits are great ways to avoid tunnel vision and decreased mental bandwidth.
If you have thoughts and ideas for managing feelings of scarcity leave me a comment so we can help each other.
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