Best Practices

How to Break a Poverty Mindset for Financial Abundance

Date Published: Feb 21, 2023
Jim Hughes, editor at
Sophia Rodriguez, reviewer at
Listen minutes

Do you feel stuck in a cycle of poverty and can't seem to make it out? Does it feel impossible to build wealth no matter how hard you try? If so, you might be stuck in a poverty mindset. A poverty mindset is a belief system rooted in scarcity and a perpetual lack of resources that can be hard to break out of.

However, there are steps one can take to shake this mindset. In this article, we will go over what a poverty mindset is, signs that you may be caught up in it, and steps to break free from it.

What Is a Poverty Mindset?

A poverty mindset is a belief that one lacks resources or money. It is a mindset that can be passed down from generation to generation, making it difficult to break free from. A poverty mentality can lead to helplessness and a lack of motivation to take action.

Young couple stressed over billsWhen one goes through the world with a poverty mindset, they are likely to view money as scarce and resources as few and far between. On top of the stress, fear, and insecurity, this notion of means never being enough can lead to dangerous situations where one is taken advantage of. And, with enough generational impact, this mentality may need conscious steps to ease and, in some cases, be mended completely.

Five Signs You May Have a Poverty Mindset

A poverty mindset affects countless people every day, often causing them to feel helpless and frustrated as they struggle to make ends meet. Despite their best efforts, they may never seem to get ahead financially.

If you find yourself trapped in stagnant routines and limited beliefs about money — you might have a poverty mindset. Here are five signs you might be struggling with this kind of mindset:

You Feel Like You Don’t Deserve Wealth

Though it might sound insensitive at first, a broke mentality may mean that a person believes that they are not worthy of wealth. Many reasons may contribute to this belief of unworthiness, including upbringing, past experiences, or trauma. As a result, people may think they do not deserve the same opportunities as others. This can complicate one’s thinking, as they might regard the steps towards financial freedom as ones they were never supposed to take in the first place.

Internalizing the notion of being unworthy may cause people to doubt their capabilities and remain in different types of poverty. In the long run, being stuck in a poverty mindset can damage future opportunities and affect people’s self-esteem.

You See Money as a Source of Stress and Anxiety

A person with a poor mentality is likely to view money as a source of stress. This can be due to a myriad of factors, such as living paycheck to paycheck, having little to no savings, the link between poverty and crime, or having limited possibilities of increasing income due to a lack of job opportunities. All these circumstances may lead to heightened feelings of insecurity around the concept of money.

Furthermore, people trapped in poverty may feel that money is beyond their control. Financial setbacks, whether it’s an unexpected bill or losing a job, can become overwhelming and lead to feelings of helplessness. Additionally, it can be challenging to see a way out when living in a poverty mindset, so individuals may feel that the status quo is their only option.

You Struggle to Take Risks

A person with a poor mentality may have difficulty taking risks, even when the potential rewards could be significant. For instance, someone with this mentality might pass up better job offers, thinking that transitioning to a new position is too risky.

Close up on individual opening job offer letter Sometimes, it could also be attributed to fear — people may see the new job opportunity as an all-or-nothing situation. As a result, they opt to stay in their current job to retain the security of their current income while protecting themselves from uncertainty in their future career path.

You Stock up on Supplies

People with a poverty mentality sometimes stockpile supplies for fear that they will not be able to acquire them in the future. This fear might be rooted in past experiences or traumas or from a feeling of insecurity in their current financial situation. Stockpiling supplies or hoarding can be a way of gaining a sense of control over one’s environment and relieving anxiety caused by the feeling that they are not doing enough to ensure their future needs will be met.

For those living in poverty, access to resources can be difficult, especially when faced with limited access to support networks. This limited access can lead to the fear that they will not have the resources if an emergency occurs. As a result, hoarding can provide a form of security, as it does not rely on institutions or systems of support. As a result, it also allows them to feel more autonomous and in control of their fate.

You Make Fear-Driven Decisions

People with poverty mindsets may make decisions out of fear because of their past experiences. For instance, people may develop a poverty mindset if they have been exposed to a lack of financial security. This can be due to growing up in poverty, having an unstable childhood, or coming from a low-income family.

Without the experiences of stability and security, a person might become stuck in a cycle of fear-based decision-making. As a result, they may constantly worry about their finances, struggle to make ends meet, and feel trapped in their current circumstances.

Fear of scarcity can cause people to become highly risk-averse. They may opt to stay in a low-paying job because the stability of a paycheck is more important than the potential of a higher salary. They may also make decisions that do not take into account future gains.

Instead, they may prefer the guarantee of small gains now.

How to Break Free from a Poverty Mindset?

If you're struggling with a poverty mindset, know that you are not alone, and your options are not limited. Here are some actionable steps you can take today to improve your financial circumstances:

Acknowledge Your Mindset

The first step to breaking free from a poverty mindset is acknowledging its existence. Once this is recognized, individuals can work to identify the beliefs holding them back from achieving success and abundance.

When one acknowledges their current situation without judgment, they can focus on alternative ways of thinking and acting. This can be done by engaging in uplifting activities, such as reading materials that inspire and motivate, challenging oneself to learn a new skill, engaging in positive affirmations, and setting small achievable goals. These goals can range from examining expenses to setting a realistic budget, sticking to your budget, and working up to saving a little each month.

By recognizing these patterns and actively working to combat them, individuals can take back control of their lives and start creating a new narrative for themselves.

Find a Support System

Individuals struggling with a poverty mindset can benefit from talking to people with a wealth of knowledge and experience. This includes mentors, financial advisors, healthcare professionals, and career counselors.

Individual meeting with financial advisor These professionals can offer valuable insight and advice on how to break free from a poverty mindset and achieve financial security.

  • Mentors can share their knowledge and experiences on how they were able to break free from financial struggles. Additionally, they can offer guidance and resources for the individual to take action and improve their circumstances.
  • Financial advisors can help advise on budgeting and money management to create financial security in the future. They can also offer guidance on increasing income by analyzing one's current job skills and exploring whether additional training could lead to higher pay. Not only that, but they can assist with finding more cost-efficient ways to manage living expenses.
  • Healthcare professionals may teach effective coping strategies for dealing with negative self-talk, identifying triggers for their thoughts and feelings, and working through any past trauma that may be contributing to their current mindset.
  • Through career counselors, job seekers can develop strategies that take into account their individual mental blocks and setbacks and build confidence in their ability to find gainful employment. Counselors recognize that people struggling with a poverty mentality may need serious help breaking old patterns and barriers to be successful. Through mindful conversations, career counselors review the client's situation and skills, assess their challenges, and create an action plan around attainable goals and realistic expectations.

Take Advantage of Available Resources

Making the most of existing resources is also essential. For instance, taking advantage of government assistance programs can help individuals mitigate the effects of poverty by providing access to employment training, healthcare, and other essentials. Here are some benefit programs that may help improve your financial situation:

  • Temporary Assistance for Needy Families (TANF) is a program that assists families with food, housing, utility, and childcare expenses. Additionally, TANF offers job training opportunities to help individuals secure work. TANF bases its eligibility requirements on the family's current income, assets, and debt levels. To qualify for TANF aid, applicants must be unemployed, underemployed, or have low income. The total income for the family must be below the federal poverty level. In addition to the income requirements, applicants must either be the head of the household, have a child under 18 years old, or be pregnant.
  • Supplemental Nutrition Assistance Program (SNAP) is a government assistance program that provides low-income individuals and families with financial aid for food. To qualify, the household income must be below 130% of the national poverty level. SNAP also requires beneficiaries to re-certify their eligibility every six months. SNAP funds can be used in most grocery stores and some qualifying restaurants. However, the money cannot be used to buy alcohol, vitamins, medicine, nonfood items, or household supplies.
  • The Low-Income Home Energy Assistance Program (LIHEAP) is an initiative by the federal government to help low-income households pay their energy bills more affordable. Your income and household size will be checked to determine whether you qualify for LIHEAP. However, if you already qualify for SNAP and TANF, you may also be eligible for LIHEAP.

Individuals who receive LIHEAP assistance can use the funds to cover their utility bills and minor energy-related home repairs. If you don’t qualify for LIHEAP, you can contact your utility service provider to see if they offer payment assistance.

Set Reasonable Goals

When moving from a poverty mindset to an abundance mindset, it is important for one to set goals. Making daily steps toward success can help you stay focused and motivated. Setting weekly, monthly, and quarterly goals are also recommended.

Every week, an individual can set a goal to find one or two ways they can start saving money or spending less on unnecessary expenses. This could involve setting up an automatic savings account or researching low-cost alternatives for items they need.

On a monthly basis, aiming to build an emergency fund may help people take control of their finances and prevent debt from accumulating if an unexpected expense arises. Furthermore, taking big-picture action every quarter could mean developing new skills through online courses or expanding one’s skill set for better job opportunities.

Final Thoughts

For all those wondering, “how do I get out of a poor man’s mindset,” the first step is acknowledging your concerns about money. Instead of letting doubts keep you from progressing, focus on taking decisive action. Implementing small changes consistently can make a big difference. These changes include setting financial goals, budgeting, learning new skills, and seeking assistance from professionals and government programs.

You may be interested in these blogs, too:

Ana-Maria Sanders, author at OpenLoans
Lead Writer
Ana-Maria Sanders is a highly-regarded writer with over a decade of expertise in the personal finance sphere, specializing in loans and credit cards.
Follow me: