Did you know that there are great similarities between a lack of financial security and being pressed for time?
When pressed for time, we miss deadlines just as the poor miss bill payments. We double-booked meetings and promise time we have already committed, while the poor bounce checks. We borrow time from future projects to handle current time pressure, the poor borrow from their future financial scope by taking expensive short-term loans to pay the bills today.
There is a distinctive psychology of scarcity meaning that our minds work differently when we feel we lack something. And it does not greatly matter what that something is. Anyone who feels strapped for money, friends, time or calories is likely to succumb to a similar “scarcity mindset”.
This mindset brings two benefits. It concentrates the mind on pressing needs. It also gives us a keener sense of the value of a dollar, minute, calorie or smile. The poor, it turns out, have a better grasp of costs than people with financial slack.
This scarcity mindset can also be debilitating. It shortens a our horizons and narrows our perspective, creating a dangerous tunnel vision. Anxiety also saps brainpower and willpower, reducing mental bandwidth and liquid intelligence. Scarcity lowers our IQ by as much as a night without sleep.
The Shafir TED talk explains in depth how scarcity affect our ability to make sound and rational decisions. If there is one talk you should watch, this is it.