Scarcity vs Abundance Mindset: How to Understand Each

  • By: Ryan Kane
  • Updated: April 12, 2022
  • Time to read: 6 min.

When I was a kid, there’s one thing I always remember from my experience at restaurants:

We ordered water. Always.

“And… five waters, please.” That was the end of nearly every order we ever placed.

And you know what? I learned a lot from this, along with other spending habits picked up from my parents. 

It’s important to learn how to not waste money on things you don’t value. By doing this, you can save and spend on things you do value. I’m lucky that this was modeled for me. 

But I also took it too far. At one point in my twenties, surviving on beans, rice, and eggs became an art form. My money philosophy was simple: saving and investing was good. Spending was bad.

This is the scarcity mindset. When you’re coming from a place of scarcity, the uncertainty of the future drives conservative behavior, regardless of whether you actually have the resources to spend more or take more risk. Your focus is on limitations and what’s not possible.

The abundance mindset, on the other hand, focuses on possibilities instead of limitations. Abundance comes from a place of being open to opportunities, thinking bigger, taking risks, and trusting in the outcome.

Let’s dive into the differences between the scarcity and abundance mindsets, and how rewiring your mind to come from a place of abundance can help unlock new possibilities. 

Understanding the scarcity vs abundance mindset

Scarcity Mindset vs Abundance Mindset Comparison
The scarcity mindset is about fear and survival. The abundance mindset is about trust and allowing bigger possibilities.

The main difference between a scarcity mindset and an abundance mindset is that with a scarcity mindset, your belief in your own potential and your optimism about the future is constricted. Scarcity causes you to hold onto what you have, focus your attention on costs, and think small. 

Abundance, on the other hand, is a way of looking at the world that zooms out and considers the full range of possibilities. Abundance is about thinking big, focusing on opportunities, taking risks, and betting on yourself.

Abundance MindsetScarcity Mindset
Thinking big-pictureThinking small
Focused on opportunitiesFocused on costs
Optimistic about the futureNeutral or pessimistic about the future
Trust, not fearFear-based outlook
Life is about flourishingLife is about survival
No limitsSignificant limits
Mindset of gratitudeMindset of lack
Long-term focusShort-term focus
Expansive visionConstricted vision

Living in a place of scarcity

A scarcity mindset is often associated with growing up with limited resources, or going through some kind of trauma. But you can take many routes to a scarcity mindset. 

In many ways, it’s society’s default cultural script. It’s easy to get obsessed with how you can save money on your Netflix subscription, rather than how you can build a business or find a job that helps you never worry about the cost of your Netflix subscription.

Back to my own history with scarcity. 

Beyond my obsession with eating frugally, I tried to bike wherever I could, instead of driving. I also ordered the cheapest thing I could on restaurant menus. Trips by airplane sometimes turned into 2-3 layover, 20+ hour trips in an effort to prioritize money over my experience. 

At one point, I even remember trying to coast my car downhill instead of accelerate, to save gas. (Which apparently doesn’t even work anyway. Go figure.)

Behind all of this scarcity-based behavior was fear driven by the uncertainty of the future. To cope with uncertainty, I was choosing to spend as little as possible and squirrel away resources.

At the same time, my most obsessive focus was on the far-off dream of an early retirement, which would be funded by investing as much of my paycheck as possible. Building my savings and net worth became more important than using money to create a life I was excited to live. 

In a scarcity mindset, deferring dreams until retirement becomes easier than imagining you can have it both ways: living a life you love now, while still succeeding.

A scarcity mindset caused me to spend years playing small.

The power of the scarcity stories we tell ourselves

The underlying story I was following was this:

“You have some money saved up, but it’s not enough. You haven’t reached your goal. Spending money now is irresponsible. It’ll mean dealing with pain and discomfort later. You’re not that kind of person, right?”

But even worse was this unconscious script:

“Sure, you don’t like your job. But there’s no perfect job. Your best bet is to play it safe and keep saving. In 15 years or so, you’ll be able to quit and retire. In the meantime, don’t take risks that draw down your net worth. Definitely don’t work on something that drives your curiosity but doesn’t make money.”

By allowing my scarcity stories to dominate, I took small risks and never allowed myself to dream that I might be an outrageous success.

In my wildest dreams, I still made modest amounts of money and lived a pretty frugal life. 

Granted, money is certainly not everything. And an obsessive focus on money isn’t good. 

But abundance isn’t just about money. It’s an attitude towards life that enhances your risk-taking, creativity, and belief in yourself.

Abundance mindset examples

Optimistic man with abundance mentality
Be like this man: dream big and be optimistic about the future

When you’re operating from a mindset of abundance, you come from a belief that there’s enough money, love, and opportunities in the world to go around.

Here are a few other ways an abundance mindset can operate in your life:

  • You’re generous, because you’re not playing a zero-sum game. 
  • You think long-term, not short-term. 
  • You think big and have an expansive vision that leads to a life you love.
  • Opportunities and possibilities are your focus (not costs).
  • You’re optimistic about the future. You see your life getting better. 
  • Life is uncertain and unpredictable, but you come from a place of trust rather than fear.
  • Life is about flourishing and realizing your potential, not just about survival.
  • You reflect on your life with a spirit of gratitude, not lack.

Cultivating a mindset of abundance takes time and practice, but you have two powerful tools at your disposal:

Gratitude and visioning. 

With gratitude, you can start to train your mind to appreciate what you already have, the opportunities coming your way, and your prospects for the future. 

And by creating a vision and allowing yourself to dream big, you can start to break away from limiting beliefs about yourself. Over time, you can replace your story about yourself with a vision that lets you flourish into your dream life. 

Building a mindfulness practice can also help, in order to notice when you’re telling yourself a story based in scarcity. 

Cultivating an abundance mindset

Moving from a mindset of scarcity to a mindset of abundance isn’t easy.

I’m still early in my journey. As I write this, I’m reorienting my energy around a vision for life that I love. But as I put this vision into action, my savings are going down. That triggers my old scarcity stories about risk-taking and saving.

But there have been changes.

In recent years, I’ve been able to spend more freely on things I want.

I’ve dreamed big and created an ambitious vision for a life I really wanted to live, rather than the one I felt I ought to live. 

I’ve taken risks to bet on myself in order to create a better life now (not just in retirement).  

By becoming aware of the scarcity stories you tell yourself, practicing gratitude, and creating a vision that allows you to think big and take risks, more and more of your thoughts will start to come from a place of abundance rather than scarcity.

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