The Scarcity Mindset
Why We Earn, Why We Spend, and Why We Stay Broke
“We Grew Up Without Enough”
Close your eyes and think back to your childhood.
Was money something people in your household talked about calmly? Or was it always a source of tension, silence, or fear? Was there ever a month when fees were late, light was cut, or a meal was skipped?
For most Ghanaians, money was never neutral. It was stress. It was scarcity. It was the thing there was never quite enough of.
And here is the thing about growing up in that environment. Your brain adapted to it. It had to. Survival required it.
“Scarcity mindset is not a character flaw. It was once a survival skill. The problem is that many of us are still running that survival program long after the circumstances have changed.”
Psychologists call this the scarcity trap. When your brain is wired for lack, it makes decisions based on the short term. It cannot easily think about next year. It can barely think about next month. It is focused on right now. Because right now is where the danger always was.
This explains so many behaviours I see among Ghanaians that look irrational from the outside but make perfect sense from the inside.
You Save in Cash Under Your Mattress
The bank feels abstract. The cedi in your hand feels real. Growing up, the lesson was: keep what you can see and touch. The formal financial system — with its bank runs, collapsed microfinance institutions, and Ponzi schemes — gave you every reason to distrust it.
In 2019, over GHS 8 billion in deposits were locked up in failed microfinance institutions. Hundreds of thousands of ordinary Ghanaians lost their savings overnight. Is it any wonder people do not fully trust the system?
But the cost of keeping money in cash is invisible and brutal. Inflation eats it quietly. In 2022 and 2023, Ghana’s inflation peaked above 50%. If you had GHS 10,000 in cash, it was effectively worth GHS 5,000 in real purchasing power within twelve months. Your money was dying in your hands, and you could not even see it happening.
You Cannot Invest Because Losing Feels Worse Than Winning Feels Good
There is a concept in behavioural economics called loss aversion. It was identified by Nobel Prize-winning psychologists Daniel Kahneman and Amos Tversky. The principle is simple: the pain of losing GHS 100 is psychologically about twice as powerful as the pleasure of gaining GHS 100.
Now, imagine you grew up watching people lose money. In bad investments. In family lending, that never came back. In businesses that collapsed. Your brain’s loss aversion is not set at 2x. It is set at 10x. You would rather earn nothing and lose nothing than risk growing your money.
This is why so many Ghanaians leave their money in a regular savings account earning 3% while inflation runs at 3.5%. The guaranteed loss feels safer than the possible gain of investing.
That is not wisdom. That is fear dressed in the clothes of caution.
The “Eat What You Kill” Mentality
Growing up in scarcity teaches you another dangerous lesson: consume what you have, because tomorrow is uncertain.
This is not unique to Ghana. You see it across Africa, across developing economies globally. When the future feels unstable, spending today feels rational. Save for what? Another crisis? Another devaluation? Another unexpected family expense that will wipe it out anyway?
Recent research from the University of Cape Coast in Ghana found that financial well-being scores among rural respondents averaged just 3.26 out of 10. That is not just low income. That is low confidence in the future. And low confidence in the future is the enemy of saving and investing.
How to Break the Scarcity Mindset
I am not going to tell you to “just think positively.” That is not financial advice. That is a motivational poster.
Here is what actually works.
First, separate your childhood reality from your current reality. The scarcity your parents faced was real. But is it your reality today? Take an honest inventory. If you have a stable income — even a modest one — you are not in the same position. Your brain needs to be updated with new information.
Second, start investing tiny amounts. Not because the amount will change your life, but because the experience will change your psychology. Open a Ghana Stock Exchange account. Put GHS 50 in a Treasury Bill. Put GHS 100 in a mutual fund. Do it not for the return, but for the feeling. The feeling of your money working while you sleep is one of the most psychologically transformative experiences you will ever have.
Third, track your wins. A scarcity mindset is maintained by focusing on what you lack. Deliberately notice what you have built. Keep a financial journal. Write down every small financial decision you make well. This rewires the neural pathways.