What did we learn from our biggest financial mistakes

When most of us think about financial wellness or building wealth, our mind immediately goes to making more money. Especially over the past few months, I’m sure you’ve witnessed the onslaught of Instagram posts, articles, videos and just about everything else reinforcing the importance of multiple income streams. Whilst it’s definitely useful to have multiple streams of income (and this post doesn’t debate this) improving our relationship with money starts with examining our mindset. So, today, we’ll be doing a deep dive into the ‘scarcity’ and ‘abundance mindset’ looking where these originate from and how we can have a positive outlook towards money.

What is a ‘scarcity mindset’?

In short, a belief that resources are finite. The actual term was coined by Stephen Covey, author of the 7 habits of Effective People who said that a scarcity mindset makes people view the world as a commodity or ‘pie’ that can run out. One of the most obvious ways that this can show up is in jealousy- the idea that someone else taking ‘part of the pie’ leaves less of it for us, leading to envy.

A scarcity mindset can also apply to things other than money. A lot of students might struggle with competition at university or at school because they want to get the ‘top grades’. Whilst at school, the number of ‘A’ grades might be capped, beyond this stage the same principle doesn’t apply. Someone else getting a first in their degree doesn’t stop you from doing so and someone else receiving a scholarship doesn’t prevent you from also getting one.

So what is an ‘abundance mindset’?

Well, you could simply say it’s the opposite of a scarcity mindset. An abundance mindset allows you to view the world as an expanding pie, as opposed to a finite one. People with an abundance mindset tend to believe that there is enough for everyone.

Ever had that one person in school who would always refuse to share any revision resources, opportunities or information which could help others in the class? Well, I do and the downside of this was that they would also receive less information and help from everyone else and when it was exam season, no one shared revision their tips with that person. I think cultivating an abundance mindset requires us to stop viewing each other as competition but rather as colleagues working together. An example of someone with an abundance mindset would be the one who was always happy to share any resources or information they came across which could help other students.

How can we cultivate an abundance mindset?

It won’t be an overnight miracle but there are little and big changes we can make to cultivate an abundance mindset.

1: Start with gratitude.

There was a period somewhere in between the various lockdowns where I just felt like my plans had been put on hold (as had most people’s). As you can imagine, I began to lose perspective of all the things I also had to be grateful for. So, I decided to start gratitude journalling and this was really helpful for changing my mindset. As I started to recognise all the things I was grateful for, not only did my mood improve but also I started to see more avenues of potential opportunities around me.

2: See other people’s success as evidence that it’s possible not as a reason to be envious

I heard Lamide Elizabeth speak about this in a YouTube video about saving and her point really resonated with me. She mentioned that when you see someone succeed in an area you’re interested in, take the principles behind their success which you can apply to your own goals and leave anything that’s not relevant to you.

3: Comparison is the thief of joy so focus on your own goals and growth.

If you have a strong idea of your own goals, you’re able to take principles and lessons from other people’s stories which apply to you without changing your initial aim. For example, if you hear someone share the strategies they used to save £50,000 towards their first property and your aim is to save £5,000 before your second year of university, you can still use any relevant and useful strategies without having to change your goal or feeling like your goal is insignificant. Developing a growth mindset is also key for expanding our belief of what is possible so do feel free to have a look at our post on how to develop a growth mindset.

Comparison is the thief of joy so focus on your own goals and growth. If you have a strong idea of your own goals, you’re able to take principles and lessons from other people’s stories which apply to you without changing your initial aim. For example, if you hear someone share the strategies they used to save £50,000 towards their first property and your aim is to save £5,000 before your second year of university, you can still use any relevant and useful strategies without having to change your goal or feeling like your goal is insignificant. Developing a growth mindset is also key for expanding our belief of what is possible so do feel free to have a look at our post on how to develop a growth mindset.

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