Scarcity mindset actively blocks financial security in a lot of ways. This is something I have worked on with all of my clients, without fail, although they are all over the map when it comes to actual income, career, wealth, education, age, gender, and family background. It makes perfect sense to me. Chronic disorganization exists in a feedback loop with stress and financial problems. This is part of how and why financial anxiety feeds on itself.
When I start a job with a new client, especially during home visits, I explain what to expect. I lay out the rules, which are that I’m there to sort and help make decisions, but that I’ll never throw anything away, not even the tiniest scrap of paper. That’s the client’s job. I also say that a couple of the side benefits are finding unexpected money, and weight loss. They react to the latter with surprise and curiosity, but to the former with firm conviction. Will I lose weight? Neat! Will I find money? HA, not likely. I know it will happen, though, because it always happens. The more insistent the client is that if they had any missing money, they would certainly have found it by now, the more likely there is to be some.
A root cause of this problem is learned helplessness. In response to stress, my people resort to pessimism and hopeless certainty. OH WELL, they think, HERE WE GO AGAIN. They also think THIS ALWAYS HAPPENS. They tend to retreat and isolate themselves, rather than reach out to anyone, ask for advice or help, do research, brainstorm multiple new approaches, find innovative ways to get around the problem or raise money, or especially to take any kind of action. This is why they can get hit with an unexpected expense and somehow forget that they have uncashed checks sitting on their desk, or nice green cash dollars in a pocket.
More obviously, my people will receive cash, checks, refunds, and gift cards... and set them down somewhere. They will go on to stack random stuff on top of that money, burying it under junk mail, flyers, and newspapers. (What the more frantic type of broke person will do is clutch that check or cash as tightly as possible and sprint directly to the bank, beating on the window if that branch is closed).
One of the most visible indicators of my people is that they leave coins strewn all over the place. There will be coins on the dashboard and floor of their vehicle. There will be coins shaking loose in the bottom of their numerous plastic grocery bags. There will be coins on the kitchen counter, on the bathroom sink, on the nightstand and dresser, on bookshelves, on the desk and on top of the microwave and TV. There will be coins in the windowsill. Usually there will be coins on the carpet as well. Coins, coins, coins. One penny at a time, it doesn’t seem like much, but I have a one-cup jar with over ninety dollars in it, all from pennies and other coins I’ve found in the street since 2005. Coins are cash, too.
There are other indicators of lack of focus and awareness around money. It’s not just common, it is UNIVERSAL that my people will find uncashed checks after they have expired. Sometimes I am able to convince them to contact the sender to have the check reissued. (Sometimes it doesn’t work, but usually it does). More commonly, they dig their heels in and refuse, feeling actively affronted that someone might suggest they are entitled to their own earnings.
The links between chronic disorganization, stress, anxiety, and financial problems become more clearly defined and easily recognizable.
My people, as a rule, do NOT trust electronic banking. They may sometimes accept direct deposit, if it’s required by Social Security or if someone very nice helped them to set it up. Usually, though, they’ll hold out until their dying breath because they are afraid of fraud and bank errors. Automatic payments are another story. If receiving money in an instant is scary, then having it withdrawn is among their worst nightmares. From my perspective, my people’s insistence on paper-based, snail-mail banking makes their organization problems an order of magnitude more difficult.
Snowdrifts of papers, sealed envelopes, unopened bank statements, and a total lack of filing system contribute to the impossible conundrum of finding all those lost checks and gift cards. Nobody, but nobody, can find anything if there are more than about ten sheets of paper on a surface.
Distrust of electronic banking is one thing. My people also resist setting up automatic transfers or payments because they have a justifiable fear of being overdrawn. Banks are not helpful here, as they have been known to deliberately process deposits and payments in a way to generate the maximum fees. Being one day or one dollar off in your calculations can potentially result in hundreds of dollars of overdraft or over-limit fees. Been there, done that, sold the t-shirt at the consignment shop to try to pay my overdraft.
Behind this same fear is tolerance of a system in which every payment is due on a different date. This is what broke people do when we’re afraid we’ll have to pay several bills on the same day, a day when our accounts are empty. At least having stuff due on different dates means we have more time to come up with the money? Here we are seeing the way that financial anxiety shortens our timeframe and erodes our ability to plan into the future. We don’t even notice that we’re, say, 10% over limit every month, or that our income and expenses are really pretty predictable. We just build up a sense of dread and learn to sputter along that way.
Looking back at my own broke days, back before e-banking and before we could withdraw cash at the grocery store without an ATM fee, I was maybe $25 from peace of mind. I needed only a very small buffer at the bottom of my bank account. It could have been quite literally the identical $25 from one year to the next. If I’d understood that, I would easily have raised that money and left it there, and it would be there today (which, now, it is). At the time, I constantly felt the danger of being overdrawn, of having to put groceries back, of having insufficient funds or having my card declined. It was real, yet also an illusion, realistic, yet also unnecessary.
I can identify my people on sight, or even from part of a photo. Papers everywhere, unopened shopping bags, lots and lots of STUFF of every description, coins here and there, and a general lack of ease or prosperity. I recognize it because I work with it and because I also used to live that life.
On the other side, it really is easy. I’ve had all my payments automatically deposited for, what? Fifteen or twenty years now? I’ve never once had a problem with a deposit. Not once. My husband and I also pay all our bills electronically. If the service provider doesn’t have automatic billing, then we set it up with our bank. We get our statements electronically. It takes about one minute to pay the few bills that require our attention. The result is that we’re never late, we never pay extra fees, and we both have credit scores over 800. This makes us eligible for lower interest rates, reward programs, upgrades, and the ability to set up new accounts without paying a deposit. In other words, the more you have, the more you get. Unfair it may be, but games have rules, and I was broke long enough that I’m not exactly going to fight off free goodies.
Financial anxiety feeds on itself. Disorganization leads to more disorganization, as entropy takes over. Anxiety and disorganization eat away at mental bandwidth, replacing focus and concentration with stress and emotional flooding. It goes from bad to worse. The same person with the same finances, though, can use mental clarity to create order from chaos. It’s possible to dig out, find those lost checks and cash and gift cards, sell off extra stuff, lower your expenses, renegotiate contracts, increase your income, and one day, look back at what has become just one sad chapter in a longer, more interesting story.
I've been working with chronic disorganization, squalor, and hoarding for over 20 years. I'm also a marathon runner who was diagnosed with fibromyalgia and thyroid disease 17 years ago.