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  • Danielle Seurkamp, CFP®

What The Toilet Paper Hoarders Can Teach Us About Money

Updated: Jun 1

There aren’t enough tests. The meat aisle is empty. Jobs are disappearing. Everyone is out of toilet paper!


As someone with a history of not always having enough, the pandemic has set off all kinds of alarm bells for me. Even though I haven’t gone an hour without the things I need to survive, knowing that critical resources for our health and wealth are in short supply has on several occasions raised my blood pressure and sent me into squirrel mode, stocking up on things just in case.


Nobody wants to admit that they are buying more than what they need but given the widespread unavailability of basic items, there are apparently a lot of us who respond emotionally to the idea of not having enough. Was it rational for me to by 80 rolls of toilet paper from Amazon? No. Did the sight of fully-stocked bathrooms give me a warm and fuzzy sense of calm? Absolutely.


If, like me, you have found yourself experiencing moments of panic about running out of things or stuffing every nook and cranny of your pantry, fridge, and freezer, then you and I might share a scarcity mindset. This thought pattern centers on the idea that there isn’t enough, resources are limited, and we have to compete with others for what we need.


Even if this isn’t your default way of thinking, you’ve likely experienced these thoughts at one time or another. Imagine what happens when you learn there is a 90%-off sale that ends at midnight or while supplies last. Suddenly, there is a sense of urgency. You want to take advantage of the sale before time or supplies run out. You have to hurry before someone else snaps up all the deals. This is an advertiser’s way of triggering a scarcity mindset because they know that by activating certain thoughts and feelings, they can compel a predictable reaction, namely buying whatever it is they are trying to sell.


Unchecked, our scarcity mindset can cause us to irrationally spend, whether it’s on a limited-time offer or the last few paper products at the store. We happily exchange money for a stockpile of goods and the peace of mind of knowing we have what we need. Of course, hoarding doesn’t start and stop with toilet paper. Sometimes the stockpile that makes us feel the best is a nice healthy balance of money in our bank and investment accounts. When this is the case, a scarcity mentality forces a very different set of behaviors. Rather than driving us to spend, it drives us to save.


When a sense of safety comes from having plenty of money, the cost of spending goes well beyond the price tag. To give up some of what makes us feel safe, we demand a significant benefit from what we spend money on. If we’re not entirely convinced of the benefit, it feels better to keep the money.


The emotional demand to either spend or save often conflicts with our other goals. For example, we might want to stay on budget to pay off debt but have the urge to spend on something that will decrease our anxiety. We might want to take a vacation and enjoy time with our family, but feel a high level of stress about spending that money. When we have competing priorities like this, the option that provides an immediate sense of emotional relief is often the one that wins. The more affected we are by a scarcity mentality, the more often we will be faced with these difficult, conflicting decisions and the more often we will take the emotionally satisfying route, even if it decreases our happiness in the long run.


So, how do we avoid being hijacked by a scarcity mentality? To begin, we need to recognize that our thoughts are not the root of the problem. Our thoughts are merely a reaction to the underlying emotion of fear. Our fear creates a set of thoughts (i.e. I’m going to run out of food) that ultimately drives us to do things that soothe the emotion (buying more food than we need). To effect change, we need to address the underlying emotion that is creating the thoughts and driving the behavior.


To do that, try this journaling exercise:


1. Write down your greatest financial fears.

2. Next, assume they are being realized. What is the worst thing you can picture happening? Where would you live? What would you lose? How would it affect your self-concept, your emotions, your goals, your quality of life?

3. In this situation, what would you do? How would you get your needs met? What would you say to yourself? How would you cope with your feelings?

4. What could you do to improve your situation? Assuming you made progress, where do you see yourself in 5 or 10 years? What might you have learned from this experience? How might it have helped you?


We often get stuck focusing on the thing we are afraid of and how we can avoid it rather than digging into the fear and examining how we could survive it. When we look beyond the catastrophic moment, new ideas emerge that lessen the grip that fear has over us. Perhaps we realize that we’ve been worried about something far more extreme than is likely to occur. Maybe we realize that we have the strength and skills to get through even a worst-case scenario. Or maybe we realize that we’re afraid of losing things that are unlikely to go away even if our financial fears become reality.


Whether you crave a pantry full of food or a bank account full of cash, relying on our money to soothe our fears can cause us to abandon our long-term goals or unnecessarily sacrifice things that would bring us joy. These are the high costs of reacting to a scarcity mindset rather than remedying it. By comparison, spending a few minutes exploring the root of your mindset is a much less costly proposition.

Exercise credit: Brad & Ted Klontz, Financial Psychology Institute

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