The Psychology of Scarcity: Learn to Avoid the Deprivation Thinking Trap

When we experience emotional deprivation in childhood, this feeling of not being important or lovable enough can persist into adulthood as a “deprivation mindset.”  We may never feel as if we have enough of the things we need.  This sense of insecurity can harm our close relationships. We may expect our loved ones to let us down, never express our needs directly or choose romantic partners who are avoidant of intimacy. Feeling deprived of important resources like love, food, money, or time can lead to anxiety or anger. We may obsess about the thing we are deprived of.  Or we may feel like we need to operate in emergency mode—penny-pinching or scheduling every second of our days. New theories and research about the psychology of scarcity provide some insights into how perceiving scarcity negatively impacts our brains and behavior.

Time-Management Mistakes

The topic of scarcity is fascinating to me because I never feel as if I have time.  Perhaps it is because I was born premature, as one therapist friend suggested. She reminded me of Macduff in the play Macbeth, who was also “”from his mother’s womb untimely ripped.” More likely it’s because I’m a busy working mom trying to run a therapy practice and write a book proposal. When I wake up in the morning, I never feel as if I have had enough sleep and I have to pull myself away from all the interesting things I want to do to go to bed at night. I am bad at time management and have to rely on good traffic flow to arrive on time. This is not a good strategy in Marin country, with its plethora of slow drivers! I also don’t know where the years went since I still feel 25 inside, despite the sagging and wrinkling. I double schedule appointments and then have to waste time changing them, and I am notorious for paying my credit cards a day late and then wasting time calling to ask them to drop the $35.00 late fee.

I thought I was just losing it because of age, but it turns out I’m not the only Ph.D. who is incompetent at managing time. I was delighted to read that the first author of the recent bestselling book, Scarcity, a famous Harvard economist and winner of a $500,000 McArthur Genius Grant had the same issues with time that I did. Not only did he double book his time and overcommit like I did, he also regularly allowed his car registration to expire, then had to waste time avoiding traffic cops. Rather than just feel sheepish about the whole thing, as I do, this productive individual turned the whole experience into a new theory of scarcity, which he developed with a Princeton psychologist colleague. It turns out that people living in poverty make similarly poor decisions about money and that this is not their fault, but rather a result of how our brains naturally react to scarcity.

How Scarcity Affects Our Thinking

A scarcity mindset narrows our time frame, causing us to make impulsive, short-term decisions that increase our difficulties in the long-term, like putting off paying credit card bills or not opening the envelopes, hoping they will magically disappear. Poor farmers in India do better on cognitive tests at the end of the harvest when they are flush than at the beginning of harvest when they are running out of money. The size of this effect was equivalent to a 13-point drop in IQ! Dealing with extremely limited resources increases the problems and barriers we have to deal with, resulting in mental fatigue and cognitive overload. Other studies show that being lonely or deprived of food results in an unhealthy obsession, hyper focus, and overvaluing of the thing we don’t have. Ironically, the nature of scarcity itself impedes our coping efforts.

Scarcity and Motivation

Stress and anxiety associated with scarcity interfere with motivation, causing us to be more vulnerable to temptation. Do you notice how people buy stuff they don’t need at after-holiday sales when they’ve already spent most of their money? Perceiving scarcity, we’re unable to resist the time-limited super-bargain. Similarly, crash diets make us more likely to binge eat—not to mention the physiological effects of hunger on thinking and performance.  Lonely people see themselves and others more negatively and may counterproductively avoid joining group gatherings and activities for fear of rejection.

What to Do

So, how do we overcome this scarcity mindset without becoming too complacent and living in ‘la-la-land’?  While different people may be comfortable with different levels of scarcity versus abundance mindset, the following suggestions can help you feel less deprived.

Practice Gratitude – Deliberately focus your mind on what is good about your life, including the people who support you, the sense of community in your neighborhood, your achievements, or your exercise and healthy lifestyle. This can stop you from magnifying the importance of any one scarce resource like time or money.

Don’t Compare Yourself With Others – You will always be exposed to people who have more time, money, or possessions and may experience a touch of envy. But in reality, you don’t know what it’s like to walk in that person’s shoes. As the saying goes, “Don’t compare your inside to everybody else’s outside.”  Your struggles may have created inner strengths that you don’t fully appreciate.

Stop Obsessing – It is easy to get caught up in mental scripts about all the wrong decisions you made or worries about “what if.”  To break these cycles requires a lot of effort and preparation. Make a plan for what you will do if you catch yourself ruminating. Getting up and getting active can activate the left side of your brain, which breaks the depressive emotional focus. So, take a walk, call a friend, tidy your closet or read a book.

Take Preemptive Measures – Make a list when you go to the supermarket or program automatic appointment reminders and deposits into savings accounts. Don’t take your credit card to the mall—take a frugal friend with you instead. Put the cookies on the top shelf or give them away before starting your healthy living plan.

Don’t Be Greedy – When resources are scarce, people get competitive because they think that more for somebody else means less for you. In fact, when you help somebody else grow their business, they may be more likely to refer extra business to you. Being helpful to others can lead to deeper friendships, gaining respect and reputation, creative bartering, or making allies.


Melanie Greenberg, a Clinical Psychologist, and expert on Mindfulness, Managing Anxiety, and Depression, Succeeding at Work, and Mind-Body Health. Dr. Greenberg provides workshops and speaking engagements for your organization and coaching and psychotherapy for individuals and couples.


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