Why a positivity mindset doesn’t always work with money

The idea that mindset dictates wealth is an old but common trope. Believing that the power of thought changes worldly conditions might feed a deeply-seated psychological desire, yet as Jennifer Sheehy-Skeffington, an assistant professor of social psychology at the London School of Economics, writes, this is especially dangerous when expressed to people in poverty.

In her research, Sheehy-Skeffingtonis has found that beginning in the 1950s and ‘60s in the UK and America, economic poverty became analogous to moral failing. This assumption emerged from four psychological factors that became embedded in middle-class ideologies:

• Locus of control: belief in one’s power to change circumstances
• Self-regulation: the ability to stick to one’s long-term plans
• Approach orientation: remaining positively proactive toward one’s situation
• General social trust/agreeableness: leveraging one’s relationships to their advantage

The combination of these four psychological phenomena created a belief in free-floating mindsets: the notion that your mindset can be separated from your social and economic conditions. Sheehy-Skeffington pushes back:

Mindsets are not free-floating. They are neither optional strategies that everyone can freely adopt nor value-neutral ways of enhancing wellbeing. Instead, they are embedded in life conditions that have material, social and ideological dimensions, and this is just as true for those of us living in poverty as it is for the rest of us living in financial comfort.

Anecdote is not data

What led to the idea that financial impoverishment is a moral failing? While pinpointing an exact answer is challenging, we know people outweigh anecdotes versus data and often don’t recognize their advantages, which skews their viewpoint.

In her article, Sheehy-Skeffingtonis responds to each of the four psychological phenomena.

While believing you can change your circumstances through mindset is appealing to those who have their basic needs met, things change when environmental threats are constant. If you don’t know how much money you’ll make next week, or if you’ll have time to swing by a food bank to secure dinner, seeing a brighter future can prove daunting.

As much as the positivity impulse seems helpful, Sheehy-Skeffington points to research that has found the opposite. The ability to self-regulate is nearly impossible when every day could bring ruin.

When studied experimentally, the tendency to prioritise rewards in the future rather than the present diminishes among those who feel low in power or perceive instability or uncertainty in their environment. The apparent failure of self-regulation – a trait admired in those who have it, and taught to those who don’t – is not a psychological impairment, but an adaptive response to having little actual control over one’s future.

Sheehy-Skeffington notes that living in an environment in which everyone is in the same economic strata provides constant reminders of your socioeconomic status. Stress builds like a pressure cooker. Studies show that earning low wages in a rich country decreases happiness and approach orientation. Pessimism isn’t mindless or blind; it becomes a matter of emotional regulation.

And so social trust and agreeableness becomes lessons in naivety, not positive affirmation about future possibilities. Trust is infeasible when resources are scarce. Life is a series of protections. Positive thinking, as emphasized in pastel Instagram stories by financial life coaches, endangers the reality of their situations, another threat to avoid.

Money matters

These four components of a positive mindset do not fit into the context of low-income neighborhoods. Staying attuned to present threats is a necessary survival skill; wishing for a brighter future is a distraction. No mantras will change this.

Yet hope is not lost. Change is possible, but not without material assistance and legislation that positively impacts low-income neighborhoods. One of the advantages of technology, for example, is the creation of an entirely new generation of financial services tailored to benefit individuals that need assistance, and not only the company that creates them. As she writes,

What those who are socioeconomically marginalised need is not mindset coaching, but action that addresses the material deprivation, financial precarity and social devaluation inflicted on them. Such action gets overlooked when these mindsets are discussed as if they are accessible and beneficial to all – free-floating – as opposed to tailored toward a privileged few.

Importantly, Sheehy-Skeffingtonis writes that free-floating mindsets are a myth. Researching how such neighborhoods are formed, especially in wealthy nations, is the first step in creating sustainable change. Wishing otherwise only provides empty promises. What’s actually needed is systemic change in how money moves through these societies.