What does your scarcity mindset look like?

Today Gwen interviews JD Roth live at FinCon! JD started blogging over 20 years ago, and started his personal finance blog in 2005. He explains what growing up poor taught him about money and how he manages his temptations nowadays.

You'll love how real his story is.

We also chat about...

How JD discovered FI
Why buying an old house and repairing it is expensive
How he controls his spending habits
His scarcity mindset and what it means for him

Enjoy this chat with JD Roth, and please subscribe to us in iTunes if you enjoyed it!

Show notes and links from today's episode

JD's blog: Get Rich Slowly
Paula Pant's blog: Afford Anything
Financial Independence subreddit

Key takeaways from our chat with JD Roth
1 - Rent is the ceiling, the mortgage is the floor
Both Gwen and JD agree that fixing up an old house can be very expensive and can be a never ending hole in your pocket. After repairing the house, JD then wanted a hot tub and a nice deck, which meant even more expenses he hadn't planned for. So as Gwen says, the good thing about rent is that it stays the same every month and won't go higher (hopefully), whereas a mortgage is the minimum you'll spend, and can easily increase.

Keep this in mind next time you plan on buying a house!


2 - If you had a spending problem as a young adult...
JD tells us how he grew up poor and had some crazy spending habits when he started earning money. Gwen had the same issue growing up, which explains why she bought so much 'stuff' once she had money. This is the scarcity mindset that a lot of people who grow up poor deal with.

JD explains it as some kind of 'FOMO' (Fear Of Missing Out); he's scared that he might need the thing in the future, so he buys it just in case.

Gwen describes it as a big fear of being poor again. After quitting her job, the lack of income caused some stress and worry as it brought her back to her 'dark days' of poverty.

This goes to show how your money situation at a young age can deeply affect how you deal with money as an adult.


3 - How to avoid temptation
JD loves spending money on comics and videogames, and so has to control himself to make sure he doesn't overspend. He does this through avoidance. To make sure he isn't tempted, he simply stays away from comic book stores and videogames - he doesn't even check the subreddit anymore! By managing the triggers and reducing exposure, JD is able to control better his spending. Go JD!


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