Anxiety stemming from finances has always existed and continues to be one of the top stressors for many Americans,¹ particularly among younger generations.² There are many factors for this, but one significant impact I have noticed in my practice is the way a scarcity mindset has become increasingly common in today’s world of economic uncertainty.

What Is a Scarcity Mindset?

A scarcity mindset is the belief that there aren’t enough resources to survive or maintain a stable quality of life. The mindset typically occurs when an individual feels they never have enough of what they need most: money, time, safety, or certainty, even when resources may be objectively adequate. What’s more, the mindset can undermine a client’s ability to make clear-eyed decisions.³

Though it’s different for each client, the mindset is typically less about net worth and more about one’s perception of safety under stress, which exists as a psychological state rooted in fear and lack.

The Psychology Behind Scarcity Mindsets

Even before I began working as a mental health thought leader in finance, I noticed that an individual’s relationship with money runs deeper than one might realize. Financial behaviors aren’t just about spreadsheets and budgets; psychological patterns that often begin in childhood and can even extend back through generations of family history help shape these behaviors.

Cognitive Behavioral Therapy (CBT), one of the most empirically supported therapeutic approaches to positive behavior change, teaches us that our thoughts precede our emotions and behaviors. When we engage in catastrophic, negative thinking about money, we create self-fulfilling prophecies that fuel anxiety and stress. These thought patterns don’t just make us feel bad—they actively sabotage our financial success by driving maladaptive behaviors such as excessive risk aversion, hoarding, or avoidance of beneficial economic opportunities.

Clients and Self-Worth: The Foundation of Financial Abundance

An abundance mindset is a disciplined recognition that value compounds when insight, capability, and relationships are developed rather than protected. An abundance mindset assumes that the system can expand through better thinking, better tools, and better coordination, so the work shifts from “How do I not lose?” to “What creates more capacity, trust, and optionality over time?” Abundance is about growth.

And at the core of an abundant mindset lies something far more fundamental than financial literacy or market knowledge—it’s self-worth. When financial professionals understand this connection, they unlock a powerful dimension in their practice that transcends traditional planning.

Self-worth serves as the bedrock upon which financial prosperity is built. Self-worth is the inherent feeling that one is deserving and valuable no matter what. When we genuinely value ourselves, we naturally put ourselves out in the world with greater confidence, stronger negotiation skills, and more assertiveness in financial matters. This isn’t about ego, it’s about recognizing your inherent value and ensuring your financial decisions reflect that worth.

Many clients struggle with financial prosperity, not because they lack knowledge, but because they haven’t addressed their relationship with their own values. The willingness to expand comfort zones, develop new skills, and advocate for ourselves financially stems directly from how deeply we honor our worth.

Clients with a Healthier Sense of Self-worth Find Better Outcomes

The financial manifestations of healthy self-worth are profound. Clients who genuinely value themselves are more likely to:

• Charge appropriate rates for their work
• Negotiate effectively for raises and opportunities
• Make investment decisions from a place of confidence rather than fear
• Seek support when needed without shame
• View wealth as a natural extension of their value rather than something they don’t deserve

For financial professionals, this understanding transforms client relationships. When you recognize that a client’s reluctance to invest, tendency to underspend on themselves, or pattern of financial self-sabotage stems from self-worth issues, you can understand the root cause rather than just the symptoms.

A client’s journey toward financial wellness begins with this inner work: recognizing and embracing your unique value, aligning gifts with needs in the world, and allowing oneself to receive the prosperity that naturally follows. Not all financial professionals are equipped to guide their clients to a different mindset, but all of us can be understanding, compassionate and supportive as clients discover themselves on a deeper level.

Letting Scarcity Go and Supporting a Client’s Sense of Self-worth

One important part of working with a client who is trying to let go of a scarcity mindset begins with you resisting the urge to match it. When clients act from fear (of loss, judgment, or missed opportunity), the planner’s role is not to reassure reflexively, but to reframe deliberately.

“Making room for abundance” means shifting conversations from short-term protection to long-term capacity: clearer decisions, better trade-offs, and growing optionality over time. Abundance is created when clients see that good judgment compounds, that clarity reduces anxiety, and structure replaces urgency. The moment clients trust that their future is not a fragile balance to defend, they gain the freedom to act with intention rather than fear.

Conversations that Support a Client’s Awareness of Their Sense of Self-worth

To help your clients discover and strengthen their sense of self-worth as a foundation for financial abundance, consider providing them with these questions and time for reflection:

1. Ask the client to imagine somebody who believes in them (a best friend, colleague, or mother) is asked to describe their unique gifts and strengths. What would they say? 
2. Ask the client to describe a time when they pleasantly surprised themselves on what they were able to accomplish. How did that feel? What did they learn from that experience that could translate to other aspects of their life? 
3. Ask clients to consider when they feel the most valuable. In which relationships? Why? How did that come to be? Did that opportunity fall in their lap, or did they welcome it somehow? What can they learn from this experience? 
4. Your self-worth reflects how much abundance you are willing to let into your life. Ask a client, on a scale of 1-10, how well do they feel they are doing at embracing their worth as a means to generate greater financial prosperity?  How can you improve this number?

There aren’t right or wrong answers here, and responding to what the client says isn’t necessary beyond acknowledging it and offering to talk more about it. These do not have to be long or deeply personal conversations; the key is to allow them to resonate with the client so they can reflect. This is helpful because an external perspective often reveals talents and values that a client takes for granted.

In my experience, the most effective financial professionals understand the connection between self-worth and prosperity. By helping a client be more aware of this inner work first, you not only transform your own relationship with money but also gain authentic insights to share with clients facing similar challenges.

Simple Techniques to Show Clients How to Adjust Money Mindsets

Financial professionals who understand these techniques possess tools to help clients break free from limiting money beliefs that may be hindering their financial behaviors. These evidence-based strategies can transform how clients think about and interact with their finances.

Interrupting Negative Financial Thought Patterns

“Thought stopping” is a deceptively simple yet powerful technique for disrupting negative financial thinking. When clients notice themselves spiraling into catastrophic money thoughts (“I’ll never have enough for retirement” or “The market crash will wipe me out”), help them to be aware and to say “STOP.” This creates a crucial moment of awareness, interrupting the automatic negative thought pattern before it triggers anxiety and poor financial decisions.

Restructuring Limiting Money Beliefs

Beyond stopping negative thoughts, clients need to actively reprogram their financial mindset through thought restructuring. This involves identifying negative money beliefs and systematically replacing them with more balanced or positive alternatives.

For example, help clients to reframe their situation:

• “I don’t have enough for retirement” becomes “I’m working toward having more than enough for retirement…”
• “I’ll always struggle with money” transforms to “I’m learning financial skills that will improve my situation…”
• “Wealthy people are greedy” shifts to “Many wealthy people create jobs and support important causes…”

These reframes aren’t about false positivity—they’re about creating more accurate, empowering perspectives that acknowledge both challenges and possibilities.

Breaking the Emotional Chain Reaction

Money is not just numbers; it has meaning. A single money-related thought (“I’m falling behind,” “I’ll never feel secure,” “I can’t afford this”) triggers an emotional response—fear, shame, relief, excitement that then drives behavior. Spending, saving, avoiding, or over-working are usually emotional reactions disguised as “financial decisions.” When clients understand this chain, they can interrupt it before emotion hardens into habit.

The key to breaking the chain reaction is in “empowering” the thought, even if one does not yet completely believe it. A shift such as this can have widespread benefits to the client’s financial life and your relationship.

Improved Mindsets Are a Win for Financial Planners Too

Helping clients understand their scarcity mindset potentially produces any of three outcomes for financial planners.

• Decision quality improves. Clients can become less reactive, less loss-averse, and more capable of evaluating tradeoffs calmly rather than defaulting to fear-based choices like hoarding cash, avoiding investment, or over-controlling spending.
• Planning adherence increases. When clients recognize how perceived scarcity distorts behavior, they’re more likely to trust long-term plans, stay invested during volatility, and follow through on agreed strategies instead of abandoning them under stress.
• The planner-client relationship deepens. Clients might feel understood rather than judged, which builds trust, reduces defensive conversations, and shifts meetings from tactical firefighting to strategic thinking.

Net result: better financial outcomes, fewer emotional derailments, and a more resilient planning relationship grounded in awareness rather than anxiety.

To learn more about helping clients shift mindsets, read The Future of Financial Planning: From Numbers to Mindsets

¹ Survey: 43% of Americans say money is negatively impacting their mental health, Gillespie, Bankrate, 2025

² Americans Spend An Incredible Amount of Time Thinking About Money Every Day. You Won’t Believe the Numbers, Aaron McDade, Investopedia, 2025

³ Does scarcity make you dumb? A behavioral understanding of how scarcity diminishes our decision making and control, Monahan, Fisher, Deloitte, 2016

DISCLAIMER

The eMoney Advisor Blog is meant as an educational and informative resource for financial professionals and individuals alike. It is not meant to be, and should not be taken as financial, legal, tax or other professional advice. Those seeking professional advice may do so by consulting with a professional advisor. eMoney Advisor will not be liable for any actions you may take based on the content of this blog.

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