Millennial Money: A scarcity money mindset can cost you

In 2020, we all witnessed it in grocery stores. The shelves that were once filled with hand soap and toilet paper were now empty. We ran for cover in our houses, cleaning every surface and sometimes risking COVID-19 to get the last remaining hand sanitizer within 50 miles. We felt out-of-control, so we took control of what we could: our bathroom cabinets and kitchen contents.

Today, the fear of scarcity is manifested differently due to rising stock prices, volatility in the stock market, and whispers of a coming recession. We have simply added another set of worries to our list, believing that all resources are limited, regardless of whether it is true.

You might be suffering from a scarcity mentality if your current situation makes it difficult to plan for the future or you fear spending money on unnecessary things. This means that you see your resources, such as money, food, and opportunities for employment as limited. When you are concerned about your access to these resources, it is natural to want to grab what you can.

Sometimes, this impulse can be useful. Courtney Cardin, cofounder of Aura Finance (a financial wellness and investment platform) says that it helped humans survive in times when there were existential threats from the natural world. “Everyone who is here has an ancestor who was able to benefit from scarcity thinking.”

However, if a scarcity mindset doesn’t stem from a genuine need to save hungry lions and preserve food for a season without refrigeration, it can be a negative force that leads to financial decisions that are not in your best interests.

SCARCITY MINDSET – FINANCIAL AND EMOTIONAL EFFECTS

Inflation and supply chain shortages can make it difficult to access the items you need.

“You can picture it’s not very pleasant to be in. To be on guard, to think that you’ve got all the money you have and that you’re going losing it in some way, it’s not an ideal place to be,” Susan Greenhalgh, an accredited financial advisor and founder of Mind Your Money LLC, Providence, Rhode Island. “That’s a kind of vigilant viewpoint, and it’s very difficult to enjoy life.”

You may find yourself holding onto cash in savings because you are afraid to invest. This can lead to constant stress, which could limit your ability to increase your net worth. You could also spend money like there’s no tomorrow, worrying about whether the items you need will be gone. It’s difficult to plan for the future if you are anxious about the immediate.

To lock in wins, you may make risky or inefficient moves. George Blount, founder and CEO of nBalance Financial in Boston, says that every product out there has a solution. “The lottery is going to look a lot worse.” The future of cryptocurrency will be brighter. However, cryptocurrency might not be the right fit for you overall financial picture. Only one person was awarded that million-dollar prize. This is probably not you, unless you are sitting in a superyacht lounge chair reading it.

HOW TO MAKE YOUR ANGER WORK

Anxiety can be an awful feeling, but it can also be a positive emotion that inspires you to action. A recent bank statement was scanned and credit For example, card statements can give you a better idea of where your money is going each month and where you may be able cut back.

You can feel more confident about being able to pay unexpected expenses by setting up automatic money transfers to an emergency savings account. You might also be updating your resume in fear of being laid off at your company. No matter what happens, you will be ready to start job hunting immediately.

Obsessive tracking of stock prices, falling for make-money-quick schemes, or continuously monitoring the news are all not productive. A lot of people shout, even though they don’t understand the situation but still have opinions. You should allow yourself to take the time to assess your needs and values. Then you can establish appropriate financial goals and create a plan in case things don’t go as you planned.

Greenhalgh states, “We have to stop and be quiet and figure these things out.” “Once you do that, once your mind is connected to money, you can reduce the noise a bit.”