Has financial trauma given you a poverty mentality that you're unaware of?

You're doing your morning routine. You've had a shower and are squeezing the tub of your lotion to get some of the nourishing cream to apply on your body, but nothing is coming out. What do you do? Throw the tub in the bin and make a note to buy another, or think to yourself: "I know there's still a good amount of product in there that can't go to waste" and proceed to get a pair of scissors and cut it into two to reveal and use the significant amount of product left at the bottom?

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Let's take another scenario: You're heading to a mall to shop and although they offer free parking for the first 15 minutes, you won't be eligible because it's going to take you longer to shop, and there's probably going to be a queue at the counter. So what do you do? There's parking outside the mall, but it's managed by the City Council, so you ideally need to pay for it. Do you park within the mall - where your car will probably be safer - and pay the parking fees; or do you scan around for anyone wearing a yellow coat (City Council uniform) and if you see no one, proceed to park outside without paying and hope you won't get an SMS on your phone alerting you to pay a penalty for parking in a City Council zone without paying.

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These two scenarios might sound funny, but many people have found themselves doing the extremes - cutting lotion tubs and parking without paying hoping to dodge City Council officers.

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The question then comes about where to draw the line between being frugal and 'taking care of pennies so that the pounds take care of themselves'; and when it's a case of poverty mentality that may or may not have been brought about by financial trauma.

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Financial trauma has been defined as the emotional and psychological distress caused by negative financial experiences that significantly impact an individual’s well-being.

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This can in turn lead one to one having a poverty mentality, which Alan Weiss, an entrepreneurial coach, describes as "behaviors consistent with beliefs that money shouldn't be spent, opportunities are limited, any risk at all is dangerous, any success is temporary and non-replicable, and generally remaining in the back of the pack is safest."

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While it is good to be prudent with your finances, a poverty mentality can do more harm than good and end up being very costly.

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For example, when it comes to matters such as health, quality, not the cheapest option, should be a key deciding factor on what option to pick, where possible. There are people who will go to the cheapest facility, not because they do not have the funds, but because they don't want to be 'ripped off' by an 'expensive' specialist medic.

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We are in a period in Kenya where medical interns are demanding for the implementation of a Collective Bargaining Agreement that sets better pay for them and while there are many moving parts in the case, as the Government says it doesn't have the money being requested for, the reality is that specialised skills come at a cost. When one is unwell, it's better not to take chances in the name of cutting costs by self-diagnosing, opting to go to a chemist and treat symptoms, rather than any underlying cause that may be revealed should you have done tests, or going to ‘cheap’, ill-equipped facilities with staff with inadequate training.

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Let's go back to the lotion we talked about earlier to give another scenario.

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Say you are looking for a specific brand of lotion, whose recommended retail price is Ksh. 1,000. Most stores stock it at that price, but you find an online store selling it for Ksh. 500. Instead of questioning the large price difference, you consider yourself lucky to have found a vendor selling items at an 'affordable' price.

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However, no sooner have you started using the product than you get skin breakouts that become so bad that you need to visit a dermatologist, whose consultation fees is more than the Ksh. 1,000 you would have paid for the lotion. You later realise the cheap lotion was counterfeit and who knows what harmful ingredients were being mixed in the backstreets where they are produced and sold off as originals.

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Cheap can be very expensive.

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This week, my challenge to you is to examine your habits and determine whether you are prudent, frugal or if financial trauma has led you to having a poverty mentality that may be doing you more harm than you think.

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At Coinversations with Claire, we champion the prudent use of money but encourage people to examine their habits to see if there might be experiences that have caused financial trauma that need to be dealt with to be able to adopt an abundance mentality for financial wellness.

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Have a thoughtful week ahead.