What’s Your Money Mindset?

Some of us are spenders and some are savers. These behaviors come from within us, from our specific mindset. Terms I’ll use to describe this mindset dichotomy are scarcity and abundance. And all of us can be great at moneying. The key is knowing and using the tools customized for our individual mindset.

Here’s a bit about each. A person who sees money from a viewpoint of scarcity thinks, “I might need this money for an emergency, so I’ll save it now,” and is likely to be really good at saving and not so good at spending. Some of these people could even be over-savers. And the reverse is likely from someone who lives with an abundance mindset. They likely think something along the lines of, “Easy come, easy go,” or “Spend it now, save later.” They could either spend mindlessly or very intentionally but might not be a very disciplined saver, believing there will be more money available when it’s needed.

These mindsets can be adopted through nature or through experiences. But regardless of which side of the spectrum you fall, you can be very good at moneying. However it’s likely you could use some balance to bring you closer to the middle of abundance and scarcity - to healthy - which is the ideal zone.

As over simplified as it sounds, a key for scarcity-minded folks is learning how to spend more. Using your resources for things or experiences that bring joy - identifying what those things are and then making a plan to spend on them.

Alternately a key to achieve balance as an abundance-minded spender might be to save automatically. Some experts call this “paying yourself first.” I call it automagic saving.

And the most important key to finding balance from either side is making a spending plan. With your numbers at a high level, you can easily see where you need to adjust to achieve a balance.

I have a scarcity mindset, a combination of my nature and my experiences. And I’ve been through phases of my life where I saved well over 50% of my income. And then as life does, things changed. But my mindset didn’t adjust with my circumstances. I still expected to be able to save 50% of earnings and beat myself up when the math wasn’t mathing. I needed a mindset shift. I needed to find balance. I needed to think about money with more abundance and trust myself.

It took an embarrassingly long time to stumble on this realization, but once I did it caught fire. Discovering that I could balance my spending was a game changer and I haven’t looked back.  I scaled my saving percentage back from 50% to 20%, and I’ve worked to keep it there pretty consistently since.

For the abundant mindset, sprinkling some scarcity-thinking can really help. And automagic savings, too, of course. Look back and recognize the times when you’ve needed a pile of cash to pull from - an expensive car repair, unexpected medical bill, or just tight cash flow - and imagine the ease you’d have felt with the buffer of savings to pull from. Also imagine yourself at age 65. Really picture that person. You’ve lived a long life, learned oh so much, and now it’s time to slow down. How will you make that happen unless you’ve planned for it?

These thoughts can trigger anxiety. “Finanxiety,” to coin a term. And those anxious feelings are there for a reason - to inspire action. So you can stuff those feelings down and let them quietly gnaw at your insides, or you can take action today and start the work to find a healthy balance.

What’s your money mindset? Are you on the scarcity or abundance side of the spectrum? Or are you somewhere in between?