The way you think about money can have a huge influence on your ability to create wealth. Poverty mentality is a mindset that people develop over time based on a strong belief that they will never have enough money. This mindset is driven by fear and can cause poor financial decision-making.
Here are some common characteristics of poverty mentality:
- Being constantly worried about money or thinking about it often. People with a poverty mentality spend a lot of time thinking about their lack of money, wishing they had more, and being envious of people who have more money than them.
- Having a strong dislike of ‘rich’ people, yet wanting to have what they have. This can lead to reckless acts where, as soon as money is acquired, it is spent on luxuries. This is self-sabotaging behaviour which makes it difficult for someone with a poverty mentality to accumulate money.
- Making decisions based on fear. This can often lead to financial loss. For example, fearful people can be afraid to set up direct debits for bills in case they don’t have enough money in their account when the bills are due. This in turn means they can be late in paying their bills and incur penalties or miss out on discounts.
- Thinking small rather than thinking big. Small goals lead to small outcomes. Big goals require an optimistic attitude and willingness to take risk whereas small goals arise from pessimism and fear.
Poverty mentality is commonly found in people who have experienced poverty in childhood. It is a barrier to enjoying happiness and financial security. The remedy is to find ways of changing beliefs about money and focusing on what you have rather than what you don’t have; a process which sometimes requires assistance from a counsellor.