What to know about the scarcity mindset and how it affects women and their finances — and 6 ways to avoid it

• A scarcity mindset is a belief that wealth is limited and that one can run out or never have enough.
• Experts say women might be likelier to have a scarcity mindset. The pandemic has exacerbated this.
• There are ways to overcome a scarcity mindset and shift perspective.

The pandemic brought on lots of change and uncertainty — particularly for women. Many were forced to leave careers to care for family or homeschool their children. Others were affected by the widespread job and income losses in women-dominated industries like hospitality, retail, and education.

These struggles combined with wider economic problems like supply shortages, inflation, and rising prices have only perpetuated a mentality called the scarcity mindset that experts say has long held women back from financial independence and wealth.

Fortunately, these experts say, there are ways to overcome this limiting worldview, shift perspective, and take charge of your finances — even amid a pandemic.

What is the scarcity mindset?

The term "scarcity mindset" was coined by the author Stephen Covey in his book "The 7 Habits of Highly Effective People." There are two main facets: the thought that wealth and opportunities are limited, and the fear that one will never have enough.

"A scarcity mindset is often described as a belief there is simply not enough to go around — not enough money, too few good jobs," said Jill Gianola, a certified financial planner and coauthor of the book "Single Women and Money." "When someone else prospers or snags a plum job, there must be less money or fewer opportunities for you."

A scarcity mindset can also come with an obsession with what one is lacking. This creates a tunnel vision of sorts, making it more difficult to move forward and achieve financial goals.

"Someone with a scarcity mindset is one that focuses on the lack of things," said Marian Valenza, a self-described manifestation coach and speaker. "This mindset can be crippling and can hold one back financially because they focus on the money they don't have instead of seeing the endless opportunities around them."

Note: A scarcity mindset is sometimes referred to as "bag lady syndrome," a term coined in the 1970s to describe a fear that women would end up penniless and homeless in retirement.

The scarcity mindset and how it affects women

Experts say that, anecdotally, the scarcity mindset has historically affected women more than men — and for many reasons.

"Although men are not immune from a scarcity mindset, in my experience women are more prone to this view of the world," Gianola said. "Because women earn less than men on average and can be subject to discrimination in the workplace, the competition is more intense for rewarding, higher-paying jobs."

Women are more often the primary caretakers of their children, which can mean leaving the workforce and putting career goals on hold. They often also manage the household and take on the bulk of the mental load in relationships.

"There is little dispute that women naturally incur more emotional labor in their lives and partnerships than men," said Daryl Appleton, a psychotherapist and executive coach. "This undue burden can leave many women feeling constantly in survival mode, thus kicking in their natural reaction to prepare for the worst," she added.

The pandemic only exacerbated these fight-or-flight feelings, leaving many women struggling to stay afloat.

"The pandemic has shown all of us that the worst can happen and blindside us," Appleton said. "With the women I have worked with, who were already pouring from an empty cup, the pandemic wiped them out of any emotional reserves and left them feeling like they were always preparing for the worst."

6 ways to avoid the scarcity mindset around money

Experts say there are ways to overcome the scarcity mindset and shift your perspective — from seeking professional financial help to making small, daily changes.

"It is very easy to fall into the scarcity mindset and become so obsessed with a lack of something, like money or time, and it can become difficult to think about much more," said Gigi Verrey, a vice president of wealth management at GCG Financial. "But there is hope, and you can change your mindset."

Here are six places experts suggest you start.

1. Focus on abundance

The opposite of a scarcity mindset is an abundance mindset: the view that there is limitless wealth and opportunity in the world. To start shifting your focus toward abundance, make it a point to track daily achievements.

"Keep a list of daily financial wins — ways you are moving forward," said Violette de Ayala, the founder of FemCity, a networking platform for women. "This helps to move you out of a mindset of lack into one of prosperity."

Maya Zack, a mindset coach and hypnotherapist, said that practicing gratitude can help too.

"An abundance mindset is not only the belief that there is enough to go around but an appreciation for what we already have," Zack said. "Practice feeling grateful. This puts you in a far more positive, clear, and calm state of mind that will allow you to see more opportunities and take action around them."

2. Flip the script

The scarcity mindset comes from a pessimistic view of the world. To combat this, Verrey suggests conditioning yourself to flip your thought patterns.

"Consider thinking the exact opposite of how you are feeling and repeat the positive thoughts often," Verrey said. "For example, turn 'I can't imagine starting a new job with better pay' into 'I've got this, and I am more than qualified to succeed at (fill in the blank),' or 'I can't wait to meet new and interesting people' instead of 'I am a terrible networker.'"

3. Work with a pro

Engaging a financial planner can help you feel more empowered in your wealth-building decisions.

"A financial planner — preferably a fee-only planner who does not sell products — can provide a clear view of the risks you are taking and how well prepared you are to meet the future," Gianola said.

Experts also recommend working with a career coach who can help you explore more opportunities — and, in some cases, a therapist. Appleton said they could "help challenge these limiting beliefs and begin to cognitively restructure your thoughts to a place of healthy and pragmatic abundance."

4. Improve your financial education

Learning more about personal finance, investing, and wealth-building is a path toward empowerment as well.

"Take small steps to learn more about your finances," Valenza said. "Read articles, listen to podcasts, watch YouTube videos. Knowledge really is power. Learning more about money makes it not so scary."

5. Celebrate others

Part of the scarcity mindset is seeing others' wins as personal losses — thinking that their success reduces your piece of the pie.

To distance yourself from these thoughts, Zack recommends using success stories as motivators and evidence that wealth and success are possible for you too.

"Look at others for inspiration rather than envy," Zack said. "Remember that all success stories that had started as less abundant had a turning point. You never know how close it might be, but to experience it you simply need to keep going and believe it's possible."

6. Set goals

Finally, start setting small, achievable goals — and write them down.

"Journaling is the No. 1 form toward working through obstacles and problems, especially related to sorting out finances," said Jackie Ruka, a business coach and therapist. "Set weekly, monthly, and quarterly goals with action steps daily to reach those goals."

Over time, Ruka added, this forms a habit and "perpetuates a success loop that encourages the abundance mindset."

The bottom line

The scarcity mindset is common, particularly in today's challenging economic climate.

But it is not permanent, and there are many ways to shift your mindset and feel more empowered in your financial planning and decision-making.

If you feel that a scarcity mindset is holding you back, consider speaking to a financial advisor or therapist — they can help you determine the best path toward achieving your goals.

• Read more from Women of Means:
• As a queer woman, I never thought I'd be able to buy a home or build wealth — but I did, and a perspective shift made all the difference
• I spent my 20s living life to the fullest — and when I looked up, I was $57,000 in debt. Paying it off has changed my life.
• 5 strategies that helped a 31-year-old travel to 27 countries and save for a home at the same time
• I never planned to be a stay-at-home mom, but now that I am I'll never let money take me by surprise again