Ev BogueIn personal finance, they talk about a mental state called poverty mentality.
This is an incredibly common state of mind for people. I know, because I find myself slipping into it once in awhile.
I know I have poverty mentality when I look at the price of an Americano, and if it's 50 cents more than the coffee shop that's a mile away, I hike the mile to save the 50 cents.
Meanwhile, I've lost an hour of work trying to keep 50 cents.
The most difficult thing about poverty mentality is it's also contagious. If I'm hanging out with a group of people who are coupon cutting, chances are I'll start counting quarters as they go out too.
Last year I read a couple of key books on personal finance in order to wrap my head around how people think about money.
One of the books (I forget which) emphasized that major expenses are really the only ones that we need to worry about. College, a house, a car. These all have price tags anywhere from $10,000 - $500,000. Fancy time machines, hoverboards, and other fancy gizmos probably fall under this range as well -- when they start to exist.
What the book said was this: if you're coupon cutting at the coffee level, you're never going to save up for a big purchase. All of the mental energy that goes into trying to weigh whether the $2.99 coffee is worth it, never pays off. Saving 50 cents every day, for a year, is only $182.50. If we're running a successful Minimalist Business, that's base two-days of solid work to make up that money. $182.50 is definitely not going to buy us a house.
So, how wise is it for me to coupon cut in order to save for a new hoverboard?
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On the hand, there's a mentality that I'm going to call infinite mentality.
This is the mindset that comes forth when I realize that I'm never going to save up for a hoverboard by using a piggy bank for quarters. Instead, I start to invest all of my energies into manifesting wealth instead of hoarding what I already have.
This is a mentality of inspiration, rather than desperation.
How does this mentality come into existence? That's the harder question. Much of it has to do with believing that there is money out there, it's flowing, but I have to figure out how create enough value for it to flow towards me.
It's easier said than done. It's a feeling of arriving and knowing.