Financial Independence For Everyday People

Click here to see Part I: Find Your Money Mindset…Fear v. Opportunity.

→ Exercise: Scarcity v. Abundance

A key indicator of your money mindset is to listen to the little throw away phrases that you might say to a child or a friend in passing.

Here are a few examples.

• A penny saved is a penny earned.
• There’s more where that came from.
• Easy come, easy go.
• We’ll have to make do.

All of these little expressions reflect both your attitude towards money and the little daily decisions that add up to your financial picture. Let’s take a quick inventory of those phrases that reflect your money mindset.

Directions: Inventory Your Attitudes Towards Money

1. Take out a sheet of paper and make a list of Common Phrases You Use to Describe Money. Maybe you remember a grandparent, parent or other influencer repeating them to you endlessly as a child, or you hear yourself saying them to your own children. See the examples in the previous paragraphs to get started.
2. Look over the list. Are these examples of scarcity or abundance? Circle the one that applies.
   • Words of scarcity tend to indicate a mindset of fear. The benefit of having a scarcity mindset (like I do) is that we can be good savers. We are a bit pessimistic and like keeping our money under the proverbial mattress. The cost is that we have trouble taking the “risks” associated with making investments that grow money.  Some people fear money so much that they completely ignore it, and never learn financial basics.
   • Words of abundance can be a double-edged sword. You may be a fabulous optimist who successfully takes advantage of opportunity. People love to be around you because you seem to have the Midas touch. Or, you may be “living life to the fullest” right now and spending yourself into a well of debt from which it will be difficult to exit.
3. Questions for you and your family.
   • How do you feel about your attitude of scarcity or abundance?
   • How does your family feel as a whole?
   • Is there one person in the group that causes an inbalance for everyone else?
   • Is it best to be more towards one end or the other?
   • Where would you like to be on the Scarcity/Abundance continuum?  Have everyone make an “x” on the teeter-totter to indicate where they would like to be.  What is the family’s goal as a unit?

There are no ‘right’ answers to these questions.  The balance of scarcity and abundance attitudes are different for each person and every family.  If you have habits that lead you to be dissatisfied with how you manage money, then you may need to consider moving your attitude one way or the other on the continuum.

Take a deep breath, because there is one more exercise to think about:  Inventory Your Financial Influencers.