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Why Your Mindset Is Keeping You in Poverty

Joe Mahlow avatar

by Joe Mahlow •  Updated on Dec. 28, 2023

Why Your Mindset Is Keeping You in Poverty
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You keep telling yourself that money is scarce and that you'll never get ahead financially. But have you considered that your mindset is what's really holding you back? When you believe you'll always struggle, you create a self-fulfilling prophecy. It's time to break free from the mental chains keeping you in poverty and adopt an abundance of thinking.

With the right mindset, you can achieve financial freedom and prosperity. But you have to unlearn the harmful thought patterns that have been ingrained in you for years. You need to stop seeing yourself as a victim of circumstance and start seeing yourself as the creator of your own destiny. You have the power within you to achieve great things, including building wealth, but you have to believe it's possible first.

When you open your mind to abundance and opportunity, you'll start to see solutions where once there were only obstacles. You'll find ways to earn more, spend less, and make your money work for you over the long run. But it all starts with the way you think.. 

Table of Contents

The Poverty Mindset vs. The Wealth Mindset
How Poverty Thinking Damages Your Finances
Signs You Have a Poverty Mindset
How to Change Your Money Mindset
Tips for Developing an Abundance Mentality
Start Now By Building Your Credit Score
Get Advice From The Experts: ASAP Credit Repair

Keep reading to learn how shifting your mindset from poverty to prosperity can help you escape the cycle of lack and finally achieve your financial goals. The power to change your situation is within your grasp; you just have to reach out and take hold of it.


The Poverty Mindset vs. The Wealth Mindset

The poverty mindset believes that life happens to you and that your situation is out of your control. The wealth way of thinking believes that you are in control of your life and financial situation.

The Scarcity Mindset

Those with a poverty mindset have a scarcity mindset. They believe there is a fixed amount of money and opportunity in the world and that they will never have enough. This leads to feelings of lack, fear, and helplessness. People with this mindset spend money as soon as they get it and don't save because they don't think they'll ever have more.

The Abundant Mindset

In contrast, people with a wealthy mental attitude have an abundant mindset. They believe that there are unlimited opportunities and money to be made. This leads to feelings of hope, motivation, and determination. Those with an abundant mindset save money regularly because they know more will come in. They invest in themselves and their education because they know it will lead to greater opportunity.

The attitude you have largely determines your financial situation. By shifting to an abundant mindset, you open yourself up to more opportunities. You realize you have control over your situation and can improve your life through hard work and perseverance. With this outlook, you can eliminate debts, save money, invest in your future, and build wealth over time. An abundant mindset is key to overcoming poverty and gaining financial freedom.

How Poverty Thinking Damages Your Finances

To improve your financial situation, you must first address any poverty mindsets holding you back. These limiting beliefs and behaviors can seriously damage your finances.

Learned Helplessness

If you believe you have no control over your financial destiny, you won't take action to change it. This "learned helplessness" means you accept your circumstances as unchangeable, even when there are steps you could take to improve your situation. You must recognize that you have agency and influence over your finances.

Short-Term Thinking

Those in poverty often focus on immediate needs, unable to plan for the future. But short-term thinking prevents you from improving your situation. You must develop financial goals and budgets that plan for important long-term needs like saving, investing, and eliminating debt.

Lack of Financial Literacy

Without understanding basic financial concepts, you cannot make informed decisions. Educate yourself on issues like building credit, reducing debt, saving money, and investing for the future. 

Read books, take a course, and speak to a financial counsellor. Knowledge is power.

With hard work and perseverance, you can overcome poverty mindsets. Develop an internal locus of control, practice long-term thinking, and build your financial knowledge. You have the power to improve your situation and achieve financial security. Success starts with changing how you think about money.

Signs You Have a Poverty Mindset

A "poverty mindset" refers to beliefs and attitudes that keep you locked in a cycle of lack and limitation. Do any of these sound familiar?

  • You believe money is scarce. Rather than seeing abundance, you view the world as a place where there's only so much wealth to go around. This scarcity mentality causes anxiety, stress, and a tendency to hoard money rather than invest in growth.
  • You have a negative relationship with money. You may see money as evil or corrupting. You feel guilty about earning or spending it. This unhealthy attitude prevents you from attracting more money into your life.
  • You blame outside circumstances. You attribute your financial struggles to situations beyond your control, like the economy, your upbringing, or a lack of opportunity. While external factors do have some influence, blaming others disempowers you and stunts your progress.
  • You don't take risks. Fear and self-doubt hold you back from taking chances that could significantly improve your financial situation. You stay in your comfort zone to avoid potential failure or disappointment instead of pursuing new income sources or investments.
  • You lack financial knowledge. You may not understand the basic principles of earning, budgeting, saving, and building wealth. This ignorance, whether willful or not, perpetuates the cycle of poverty and financial struggle. Continuous learning and skill-building are required to change your situation.

The good news is, that you can change your mindset by challenging unhelpful beliefs, taking responsibility for your situation, and educating yourself on financial matters. With conscious effort, you can develop a prosperity mindset and break free of limitations. The path to financial freedom begins in your mind.

How to Change Your Money Mindset

To improve your financial situation, you must first address your underlying money mindset. The beliefs and attitudes you hold about money greatly impact your earning potential and ability to build wealth.

Examine any limiting beliefs you may hold, such as "money is the root of all evil" or "rich people are greedy." Release these negative perceptions and replace them with more constructive views. For example, recognize that money itself is neutral, and it is how you pursue and use it that matters. Prosperous individuals often provide value to others through businesses, investments, and philanthropy.

Pay attention to your self-talk regarding money. Do not say things like "I'll never earn more than I do now" or "I can't afford that." Instead, affirm positive statements such as "I am increasing my income each month" or "I have more than enough to cover all of my needs." Over time, your financial situation will follow your dominant thoughts.

Another key step is taking responsibility for your financial circumstances rather than playing the victim. Do not blame outside factors like the economy, your upbringing, or a lack of opportunity. You have the power right now to make choices that can improve your financial situation. Stop making excuses and start taking action. 

Develop an abundance mindset. Do not view life as a competition where there are only limited resources and opportunities. Believe that there is more than enough wealth to go around, and your prosperity does not prevent another's success. Focus on creating value rather than competing against others.Making the mental shifts to change your money mindset is challenging but essential work. Commit to ongoing self- reflection and education around your financial beliefs and habits. With consistent effort, you can cultivate a mental attitude of prosperity and open the door to greater abundance.

Tips for Developing an Abundance Mentality

To develop an abundance mentality, you must change your mindset. Follow these tips:

Focus on opportunities, not obstacles.

Rather than seeing obstacles in your way, look for opportunities and possibilities. View setbacks as temporary rather than permanent. Seek out new prospects instead of dwelling on limitations. An abundance mindset sees a world of possibilities rather than a world of lack.

Practice gratitude.

Express gratitude for what you have. Appreciate each blessing and moment of abundance in your life, no matter how small. Gratitude shifts the way you think from lack to abundance. Keep a gratitude journal and write down things you are grateful for each day.

Help others.

When you help and give to others, your own sense of abundance grows. Make a habit of assisting those in need through volunteering or donations. Giving helps take the focus off yourself and cultivates an attitude of plenty.

Continuously learn and improve.

Commit to constant self-improvement and expanding your knowledge. Take online courses, read books, and connect with mentors. Continuous learning exposes you to new ideas and helps you see more opportunities. It also boosts your confidence in your ability to succeed.

Celebrate wins, both big and small.

Do not dismiss or minimize your achievements and milestones. Celebrate all your wins and successes, both large and small. Take pride in your progress and accomplishments. Celebration reinforces an abundance mindset and motivation for continued growth and improvement. Make celebrating a habit.

In summary, shifting to an abundance mentality is key to overcoming a scarcity mindset. Put in the work to change how you view the world and your circumstances. Developing an abundance mentality can open you up to new possibilities and help create prosperity.

Start Now By Building Your Credit Score

To improve your financial situation, focus on building your credit score. A good credit score opens up opportunities for better interest rates, credit cards, insurance, apartments, and jobs. Even if money is tight, there are steps you can take now to start improving your score:

Check your credit report

Request a free credit report from Annual Credit to check for any errors or signs of fraud. Dispute inaccurate information with the credit bureaus to get it corrected quickly.

Pay bills on time

Payment history is the largest factor impacting your score. Make sure to pay all bills on or before the due date each month. Setup automatic payments or alarms to avoid missing payments. Late or missed payments severely hurt your score.

Keep low credit card balances

Keep balances low relative to your credit limits, ideally under 30% of your limit. High utilization ratios indicate high risk to lenders and hurt your score the most. Pay down high card balances as much as possible each month.

Do not close old accounts

The age of your accounts impacts 15% of your score. Do not close old credit card accounts unless there is a fee, as this can hurt your score. Old accounts in good standing demonstrate your long-term credit reliability.

Apply for new credit sparingly

New credit inquiries can lower your score slightly. Only apply for new credit when needed. Check if you pre-qualify for offers first to avoid unnecessary hard inquiries. New accounts will also lower your average account age, impacting your score temporarily.

Building a solid credit history and working to improve your score over time through responsible habits are key to overcoming financial difficulties. Stay determined, start with small steps, and keep working at it consistently. Your perseverance and patience will pay off.

Get Advice From The Experts: ASAP Credit Repair

To improve your financial situation, seek advice from credit repair experts. They have the knowledge and experience to help you develop an effective plan to resolve credit issues and build your credit over time.

Check Reviews and Credentials

When choosing a credit repair company, ensure they have a solid reputation and verified credentials. Check online reviews from independent sources like the Better Business Bureau and confirm they are properly licensed to operate in your state. Legitimate companies will have experience helping clients in situations like yours.

Understand Your Credit Report

Credit repair experts will thoroughly evaluate your credit reports to identify any errors or outdated information. They can then work to dispute questionable items on your behalf. Be prepared to provide details on any legitimate disputes you are aware of, as the more documentation and evidence you have, the stronger your case.

Develop a Customized Plan

A reputable credit repair company will develop a tailored plan based on your unique credit issues and financial goals. They will advise you on the necessary steps to take in the proper order to effectively rebuild your credit, whether it involves negotiating with creditors, disputing errors, lowering balances, or other strategic actions. Strictly follow the plan they lay out for the best results.

Stay Committed to Success

Credit repair is not a quick fix. Expect the process to take time and dedicated effort. Stay in close contact with your credit repair advisors and provide any additional information needed promptly. Be willing to make lifestyle changes to curb overspending and commit to paying bills on time going forward. With the guidance of professionals and your commitment to change, you can achieve good credit standing and financial well-being over the long run.


You have the power to change your financial situation. A scarcity mindset and negative beliefs about money have been holding you back, but now that you understand how they negatively impact you, you can work to shift your mindset to one of abundance. Start by practicing gratitude for what you have. Appreciate the small wins and blessings each day. Challenge any negative thoughts about money and replace them with more constructive ones. See money as a tool that can be earned and used to better your life and help others.

Educate yourself on personal finance and investing. Knowledge is power. The more you learn, the more in control and confident you will feel. Take action and start building wealth through budgeting, paying off debt, and investing. It will feel uncomfortable at first, but with time, it will become second nature. You already have everything within you to become financially independent. Change your mindset, gain knowledge, and take action. Break free from the chains of poverty and open yourself up to abundance. The power is in your hands. Seize it!


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