What is a poverty mindset? How do you break free from your poverty mindset and switch to an abundance mindset?
If you live in actual poverty, can you ever be successful and have a change of perspective? Breaking free from a poverty mindset is not about making more money: changing your thinking and adopting a growth mindset.
What is Poverty Mindset?
Having a poverty mindset is a fear that you will never have enough. It holds you back by convincing you that your circumstances will never change for the better. This way of thinking manifests in two ways:
- Always spending what you have because you may not have more later.
- Hoarding and not spending what you have because you may not get more later.
A poverty mindset traps you in a cycle of fear that doesn't allow you to break free from the cycle of worry and negativity. This type of thinking does not mean that you do or don't have money. Your thoughts are not necessarily rooted in reality. Beliefs and mindsets grow from perceived reality. The way you perceive your circumstances may not be the way an objective observer perceives your situation. Therefore, the poverty mindset in which you are trapped can be changed.
When you look at rich people, you can see that it is not only the people that have the most money who are powerful and effective. It is the people who see themselves as worthy of being powerful who eventually become so. The actual amount of money they have is of no consequence. In society, we see this with the concept of “impoverished gentry”- people who used to be rich but are no longer wealthy. However, they still occupy and control a position that allows them to be “rich and powerful” even without the true riches. So having actual wealth does not necessarily translate to being “rich.”
“Where money talks, the poor have no voice.” ― Matson Dhliwayo.
However, it's not actually money that is doing the talking. It is the appearance of money. The entitlement towards money. The wealthiest people have a mental attitude that allows them to collect money as their due. They accept it. They attract it. They expect it.
Rich Mentality Vs. Poverty Mindset
Having a poverty mindset means accepting and believing that nothing will ever change for you, and therefore you should make peace with your lot in life. A poverty mindset means not thinking that learning and growth or social mobility is at all within your grasp. Accepting failures without looking to improve and grow is all part of a poverty mindset.
There are so many reasons why breaking free from the poverty mindset, and then eventually, the cycle of poverty is so important. If you are interested in making a better future for yourself and your family, you need to change your thinking and mindset. It would help if you adopted an abundance-mentality and a growth mindset to be successful.
While you should work on accepting what you cannot change in your life and being happy with what you have, you can also at the same time work towards changing things. Even just slightly. Every tiny action that you take will have ramifications that can slowly, very slowly change your life.
Those who have a hunger for change and a strong sense of mental toughness will see change faster than those who are more content with their lives. However, just anger or disappointment with your situation will not lead to breaking free from a poverty mindset and to a life of wealth and abundance. In fact, such feelings can lead to frustration and depression if not properly channeled towards positive actions.
Breaking out of poverty is not simple, nor is it easy to break your poverty mindset. However, you can start by taking some small, actionable steps to change the way you live, and that will make a big difference.
A lot of what we attract to ourselves has to do with our mindset. This attraction is not because we can literally control things with our thoughts. The only thing we can control is ourselves. However, our beliefs and attitudes do control our actions. Once our mindset is changed, then our actions will change as well. As soon as our actions change, we can change the way the world perceives us, and therefore attract more positivity and opportunity in our lives.
The most important thing about changing your poverty mindset is the effect you will have on your family- especially if you are a parent; by projecting abundance and confidence, you will encourage your kids to do the same. Our mindsets are shaped by a variety of experiences and some inborn traits. By encouraging the positive qualities that your child is born with and creating a growth-oriented childhood experience, you can significantly impact your child's mindset and how they view themselves and the world.
These are character traits that can be learned, especially in an educational setting. Success in life is directly related to the extent that you believe that you are capable and can succeed. This has less to do with talents and abilities and more to do with the desire to be a life-long learner and a passion for learning and acquiring new skills. This type of education is less about memorization and school-learning and more about developing a learning mindset.
Educators who are forcing children into mimicry or even into mastering math or economic theory do not encourage the type of learning process that can help them escape poverty. Children need to develop a mindset of growth and learning to lead a growth-minded future. Academic achievement is not the difference between rich and poor. However, access to good educators can mean the difference between a scarcity mentality and an abundant mentality.
Manifest Your Way to Wealth
While this may seem like an Instagram or self-improvement trope, you can affect change in how the world reacts to you by just changing your thoughts. No, you cannot just switch to positive thinking, but you can get rid of your limiting beliefs and embrace a different mentality. Negative thoughts affect your self-esteem. Negative thinking creates obstacles towards personal growth. Having a negative attitude is not the cause of global poverty. It is certainly not why someone is on food stamps, but getting rid of your negative mentality can help you move towards a life of wealth and contentment.
Thoughts create reality. By acting confident and acting as if you are open to the world's possibilities, you will be sending a subliminal message to those around you (and yourself) that you are ready and willing to accept opportunities. In turn, people will change the way they react towards you. You become someone with potential, someone with power, someone to whom good things come. When people see that, then they turn to you when they have something with potential, something that needs energy, something good.
When you are ready to embrace the possibilities, you will jump at opportunities that come your way and prepare to take them.
Poverty vs. Poverty Mindset
A poverty mindset doesn't allow you to look towards the future. It doesn't let you be confident or open about tomorrow. It doesn't allow you to be working towards a better end.
There is a difference between poverty and a poverty mindset. Poverty drains you. Poverty makes the immediate moment the most important thing. Just like illustrated in Maslow's Hierarchy of Needs- you are continuously occupied with the essential things humans need: food, water, and shelter. While you are continually working on being busy with those three things, you do not have time, mental space, or energy to work on anything beyond that.
One of the crueler comments in the personal finance world is that “poor” people waste time on things that don't enhance the mind, while the “rich” spend time on things that improve them, that make them more broadened. “Poor people have televisions, and rich people have books.” This judgment's particular cruelty is because it points to something as the cause of poverty rather than a symptom. It suggests that watching TV makes you poor instead of suggesting that being poor drags you down to the point where you can't spend time on other pursuits because you are too busy and too occupied with being poor.
Many poor people (and unfortunately many rich people) think that the key to wealth is by working hard, by slogging away- as if by grit and determination you can will the impacts of poverty away. However, poor people work hard. They work back-breaking jobs and persevere until the job is done. It cannot be that hard work alone raises someone out of poverty.
You have to work hard to make more money, that is true. However, if you were born into a low-income family, you cannot expect work alone to catapult you to wealth. If you were born with assets and wealth, then a little hard work may get you higher, but to get that initial push, you need to change and break free from a poverty mindset.
There is a difference between living in poverty and having a poverty mindset. Similarly, there is a difference between being rich and having an abundance mindset. However, having a poverty mindset is developed by living in poverty, and it is tough to break when you are living a hand-to-mouth existence. Deprivation and poverty can lead to a poverty mindset, but poverty does not necessarily mean poverty.
Before changing your mindset, you need to take care of your physical needs first. It will be challenging to change your perspective when you are literally thinking of food and water all day. When we discuss global poverty and homelessness, we have to understand that you cannot have a flexible mindset if your most basic needs are not adequately cared for. When there is no food and no drink, there is no future, and there is certainly no mobility.
Once those most basic needs are taken care of, even if you are not rich or even comfortable, you can start breaking free from your poverty mindset.
Breaking Free from a Poverty Mindset
So what to do? How do you break free from a poverty mindset?
Know this: Thoughts lead to feelings, which lead to actions.
The first step is to change your thoughts. Once your thoughts are changed, then your feelings will change. Once your feelings change, then your actions can change.
Here are some examples of Poverty Mindset:
Thought: I have no money
Feeling: Despair, terror, anxiety
Action: Hoarding your money
Thought: I will never have more money than I have now
Feeling: Panic, frustration, anxiety
Action: Buying everything you want now
Now, let's add a “Stop, Erase and Replace” after the first step. After you have an initial thought: Stop. Erase the thought and replace it with another thought.
Thought: I have no money
Stop. Erase. Replace.
Thought: I have no money YET
Feeling: Hopeful, optimism, possibility
Action: Look for ways to improve your income and get more money
Thought: I will never have more money than I have now
Stop. Erase. Replace.
Thought: I have money for the things I need now
Feeling: Contented, secure
Action: Buy what I need and put some away for the future.
By switching your thoughts, you will then switch your feelings and then your actions. Changing your thoughts is how you turn yourself from having a poverty mindset to an abundance mindset. Breaking free from a poverty mindset will allow you to look towards the future and create a new life for yourself. You break the poverty mindset by changing your thoughts and, thereby, your attitude and actions.
By discarding your poverty mindset and learning how to think with an abundance mindset, you will become a growth-oriented person. When you are a growth-oriented person, you can change the way you view the world and, therefore, change the way the world interacts with you. When you are open to growth and opportunity, then you will be able to grasp opportunities when they come.
Overcoming Systemic Poverty
We can't overcome systemic poverty by encouraging people to change their mindsets. Breaking free from your poverty mindset will only help you and not help everyone else. By factors that are either mental, social, emotional, or physical, some people may never be able to break free from their poverty mindset. They are not to blame. Instead, those who can break free have a moral obligation to physically and emotionally help others by providing charity and helping those with limited resources.
You have to focus on yourself. Once you are free, you can either bring up another individual or encourage and institute systemic change to increase people. Of course, you can help ease global poverty by reducing the struggles of poor children and adults. Those with wealth should feed poor children and help those below the poverty line with their basic needs: abolishing hunger and providing shelter and medical care.
We should lobby our policymakers to do their best to reduce poverty, especially child poverty. We need to do this without blaming or judging. How someone chooses to lift themselves out of poverty is not our business. Making sure all human beings have access to basic needs is all of our business.
A poverty mindset keeps you trapped and uncertain, with no way to rise. An abundance mindset allows you to be open to opportunities and to work hard to make the changes you need to make in your life. Changing your thoughts and then your feelings and then your actions will break the poverty mindset and open you to the world of having an abundant attitude and real wealth and riches.
Robyn is a millennial mom with a passion for personal finance. She has her MBA and has been studying Personal Finance on her own for as long as she can remember.
She has always been “into” personal finance but got inspired to start her blog after a period of extended unemployment. She says that experience really changed the way she viewed her relationship with money and the importance of accessible personal finance education. Read more at A Dime Saved.