When Enough is Never Enough
The Money Scarcity Trap and Major Life Transitions
This is part of a three-part series on Money Traps during major life transitions. My last blog explored the conflation of income and self-worth.
Financial risk is one of the top concerns when it comes to leaving stable jobs or lifestyles. The thought of earning less-to-no money can stall or even prevent many of us from choosing to make a major life transition.
Much of that has to do with what I’m calling the Scarcity Money Trap.
“Mind on my money and my money on my mind.” -Snoop Dogg
The pursuit of money permeates our daily decision-making. We’re bombarded with societal messages that we need more: generating a fear that what we have is not enough. This can be a particularly strong feeling for those who grew up without basic necessities; but it can apply even to those who came from generational fortunes.
We want to create a financial cushion to avoid the discomfort and pain of deprivation. The problem is the cushion can never be too thick, leading to hoarding behaviours. The drive to amass has no bounds unless we stop and ask: how much do I really need?
“Of wealth, there is no limit that appears to man, for those of us who have the most wealth are eager to double it.” -Solon, 6th century BCE
Here are three Money Scarcity fallacies to look out for.
Scarcity Fallacy 1: Enough is Never Enough
It’s hard to tell the difference between what we need and what society tells us that we need (e.g. MORE, MORE, MORE!). That’s what makes Money Traps so sneaky and subtle, and how we get locked into the Golden Handcuffs.
Realistically, there’s a certain level of money that’s necessary to cover our basic needs. We have bills to pay, and there may be people who depend on our paychecks. But how do we know how much ‘necessary’ is? Most likely, that amount of money is much lower than what we instinctively feel is needed. I’ve included an exercise to help calculate this bottom line at the end of the blog.
Scarcity Fallacy 2: Money as Safety
Have you ever thought, “I need more money so that I’ll be safe”? With this line of reasoning, leaving a full-time job, spending from our savings, or having a reduced income means that we’re unsafe. We’re in danger. And it is therefore too risky to make the life changes that are necessary for a transformation to occur.
Obviously it is easier to take financial risks knowing you have a safety net (e.g. friends or family who can bail you out, or accessible cash in the bank). I call this the “Privilege Floor.” If Buddha’s transition from Prince to ascetic didn’t work out, surely he could pop back to the family kingdom for a nice meal and a comfortable room. Not every garage entrepreneur to multi-millionaire (or billionaire) took on the same level of risk, and I think it’s important to recognise that before recommending that everyone with a great idea should drop out of college or quit their job and give it a go.
Fundamentally, safety is a subjective sentiment affected by many factors outside of our control. What we can do is exercise our agency to build up our internal security, so that it is not as dependent or reactive to external influences— including money.
Scarcity Fallacy 3: Confirmation Bias
Confirmation bias enhances the potency of the Money Scarcity Trap. It leads us to fixate on stories of struggle following financial risk, and overlook the contradictory examples of people who instead achieved material abundance (or ‘enough’). Mindsets can create self-fulfilling prophecies. To counteract this trap, consider people who embarked on major life transitions without a stable future income, yet possessed the confidence that they would thrive— and somehow did make ends meet.
Remember: we tend to underestimate our own capabilities to care for ourselves. Whatever monetiseable skills we have developed to this point, including those that enable earning and saving money, are likely to be valuable in the future too. We can look for a new job, or work below the hoped-for earning potential if needed. Family and friends might be willing to help. And resources may become available that we do not or cannot envisage right now, including non-monetary ones. Numerous possibilities for abundance exist beyond our current perceptions.
‘Enough’ already!
In a world where the pursuit of wealth can feel relentless, it can be easy to fall into the Scarcity Money Trap. The drive to accumulate more money often masquerades as a self-protective safety mechanism, trapping us in the illusion that we can’t make necessary changes in our lives due to financial constraints. Breaking free from the Scarcity Money Trap opens the door for those seeking change to pursue the dreams on the other side of Transition.
As we confront this subtle but potent pitfall, it’s crucial to question whether our concerns about not having enough money are true or artificially constructed. We can do this by re-evaluating our relationship with money, challenging fear-based scarcity mindsets, distinguishing genuine needs from societal expectations, and cultivating greater internal security. In doing so, the concept of ‘enough’ can shift from constraining to liberating.
Reflection: What does it mean to you to be financially safe, or unsafe? How might pursuing your dreams of making a major life change affect your emotional safety?
Exercise: Separating Real vs Artificial Money Needs
To tell the difference between a real and artificial money need, it is helpful to make some calculations.
1. Start by considering what ‘enough’ means for you. What sum of money do you feel you need to be comfortable leaving your current income for three months? A year? An uncertain period of time? For some people— ‘enough’ will surpass the totality of our savings accounts, or be an unrealistic figure. This is true even for people who’ve amassed sizeable financial cushions (e.g. millions of dollars).
2. Estimate your total financial and material wealth to find the worth of everything you own? Could you add to this total by selling some of your material possessions?
3. Draft a statement of your current monthly income and expenditure. Then create a second estimate of what a scaled-down, minimalist annual expenditure could look like. If you have dependants or there’s someone else contributing to your household financially, check with them if any of the expenses are negotiable. It might involve an uncomfortable conversation, but the people we care for are often open to making concessions to help us achieve our dreams.
4. From here, you can calculate how many months of runway you would have, if you were not going to earn an income. How do you feel about the number you’re looking at?
Reflecting on the difference between your answers to the first and final question may clarify whether or not you’re in a Money Scarcity Trap. With awareness, you can then make an empowered decision for how to move forwards in your Transition— with or without more money.
