There are two different mindsets when it comes to money: scarcity and abundance. We looked at what can happen with a scarcity mindset. Others grow up with having all their needs met and more, and this can cause them to have an abundance mindset.
I never lacked anything growing up. I may have thought I did because I didn’t get everything I wanted, but the reality is that my family had more than we needed. This and some of my other upbringing caused me to have an abundance mindset.
Let’s look at how having this mindset can affect how you handle your money.
When you have an abundance mindset, you think money will always be there for you, and it will never run out. People with an abundance mindset focus on the long-term more than people with a scarcity mindset.
People with an abundance mindset understand that the financial pie is not limited. If my neighbor is successful, we know that we can still be successful, because the pie is not limited. The pie keeps growing.
Abundance Mindset Issues
It sounds like having an abundance mindset is better than having a scarcity mindset. Hold on! That isn’t the case all the time.
Sometimes this can cause you to take on debt since you always think you will be able to pay it off. People with this mindset think they will always have money coming in, and they think they can handle as much debt as a bank will give them.
We spend money because we think it will always be there. We take on debt because we think we will always be able to pay it back, or we don’t save what we should because we think we can always make money.
I remember when I bought my first vehicle. I was congratulated by everyone for the “success” of buying it. Everyone knew it was on payments, and financing vehicles was normal. Everyone around me had the same mindset and took on debt knowing hoping they could always pay it off.
People with an abundance mindset think they can borrow their way into becoming wealthy. This is not how you build wealth! You don’t borrow money to invest. Maybe the math works out for you, but math doesn’t consider risk.
All of us were raised in different circumstances and have gone through changes in our lives that also cause us to have our mindset. Having an abundance mindset can help you build wealth, but you need to be careful not to fall into the “debt is good” trap. Keep the good but get rid of the things you learned that are preventing you from building wealth. Save, pay off your debt, and then start investing to build wealth.