Have you ever had a large, unexpected car bill? Or credit card debt? Or lived paycheck-to-paycheck, struggling to cover your expenses each month? If so, then you know how money can consume your thoughts when it’s tight.

There’s a psychological phenomenon behind this. It’s called scarcity, and it can have major effects on how we think, feel, and act. So let’s talk about how scarcity changes our thoughts and emotions, as well as what can help loosen its grip.

What is scarcity?

Scarcity is when we must make do with too little of a necessary resource. This could be money for lower-income individuals, time for busy professionals, or calories for chronic dieters.

When someone lives under scarcity, they tend to get tunnel vision around how to survive under this constraint. The term for it, appropriately enough, is tunneling. It’s when our attention fixates on how to get by with the limitation.

Tunneling isn’t inherently bad, as the mind is just trying to help us survive. But it can come with trade-offs.

Scarcity’s consequences

In general, scarcity teaches the mind and body to survive in the short term at the expense of thriving in the long term. This can happen in a few ways:

We prioritize short-term solutions

When someone tunnels, they often focus on solving short-term problems even when those solutions come with long-term consequences. For instance, low-income individuals may turn to short-term loans even when interest rates approach 800%. That choice may seem irrational from the outside, but under scarcity’s grip, it can feel necessary to solve the emergency in front of you.

White-collar workers often do something similar with their time, pushing themselves to the point of burnout for a tight deadline.

Another consequence: tunneling consumes so much mental energy that it affects how well we can solve other problems. That’s why, in one study, lower-income individuals tended to have lower spatial and reasoning skills when they received an unexpectedly high car bill—but not an affordable one. It’s also why basic life tasks can feel overwhelming when a work deadline looms.

We overlook long-term solutions

If someone constantly tunnels, they put so much effort into the short term that they slowly stop planning for the long term. That may be one reason why lower-income individuals are less likely to invest today’s money into education that pays off later. This isn’t to blame or shame the working class, but rather to clarify how scarcity could lead anyone—even white-collar workers—to do the same.

I’ve seen something similar happen in corporate jobs. In fast-paced cultures, employees learn to complete many tasks very quickly, developing a kind of corporate tunnel vision where they avoid long-term strategic thinking that could reduce their daily work.

We carry emotional wounds

Someone who constantly lives without enough can feel intense distress, which can intensify anxiety, frustration, overwhelm, and other emotions in daily life.

People living under scarcity may also feel less hope and more powerlessness around getting out of their situation. Shame can also make it harder to engage with money at all, creating a cycle where avoidance leads to more financial stress, which leads to more shame.

These experiences can teach our nervous system that we’re in constant danger, allowing emotional wounds to scar. That’s one reason why anyone who achieves class mobility may still struggle with emotions that affect how they approach money, work, and risk in general.

Loosening scarcity’s grip

How do you solve scarcity? Get more of the constrained resource. I know, I know. Captain Obvious over here. The whole point of scarcity is that you cannot easily do this.

But here’s my deeper point. Scarcity makes us obsess over the short term at the expense of the long term. The challenge, then, is to claw back enough mental and emotional energy to plan beyond the immediate crisis.

Below are a few strategies that can help:

• Emotional regulation can reduce scarcity’s intensity, allowing us to think more clearly even if the problem remains.
• If we reduce daily decisions through routine, automation, meal prepping, etc., we conserve energy for long-term planning.
• Create incentives to complete long-term tasks. For example, you might set a goal to apply to three trade schools by next month. Otherwise, you forfeit $50.

Where this leaves us

I understand this advice is way easier said than done, as I grew up in a lower-income household. But I also made it out by putting all my energy into the long-term plan of school. That doesn’t mean college is right for everyone, nor that everyone can get there. I had some lucky breaks.

But when the world fails us, all we can do is focus on what we can control: in this case, how we respond to scarcity’s emotional toll. Even that isn’t always under our control, as we’re in a fight with our own biology. If you’re living under scarcity, I hope this article helps you feel compassion for yourself.

To anyone else, I hope you see why scarcity makes it even harder for someone to just “pull themselves up by their bootstraps.” It’s one reason we should work toward a world where no one must live under scarcity. (Which, btw, research suggests improves the overall economy.)

It’s one reason we should work toward a world where no one must live under scarcity.

In the meantime, I’ll continue to explore how emotions affect us, including our relationship to money.