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Path to Money Maturity


I could summarize a question (often asked in the form of a complaint) that I get over and over again – how do I instill money maturity in my children?

Based on what I’ve seen so far, the only perfect kids are grandkids. And I’m pretty sure no one has come up with a failsafe plan for how to raise those.

But I do believe if you at least know what you want, you know where to focus your efforts. So here’s my two cents on the path to maturity in life. And the ripple effect of this maturity will not only be felt financially, but also in every other area of life.

Stage 1 is Dependence. We’re all born dependent, aren’t we? But it is important that a young child learn that those on whom he is dependent (a.k.a., Mom and Dad) are depend-able. If the most important people in your life prove dependable, you can learn to trust. And trusting develops our capacity to love.

It’s not only parent-child relationships that start with dependence. Often employer-employee relationships start here. Or coach-athlete. Or mentor-protégé.

The foundation that must be laid in this stage is learning that there are people in my life that can be trusted. Be dependable to those depending on you.

Stage 2 is Independence. The process of raising a child, training a new employee, grooming a protégé or developing any other human being starts with doing everything for them and ends with them doing everything for themselves.

Among other vital character qualities, in this stage you are trying to develop confidence, which develops the capacity to leave. For a child, that means leaving the home. For an employee, that means leaving the heavily supervised stage of employment and entering the freedom of delegated authority and responsibility.

Real confidence is not the bravado of a professional athlete strutting his stuff before a camera. Real confidence is developed when an individual has demonstrated to himself that he is capable to doing the thing being asked of him. Appropriate levels of self-confidence empower us to delay immediate gratification, confident that our investment of today’s resources (of time, effort or money) will be rewarded in the future. And the ability to delay immediate gratification for the likelihood of a greater future reward is the cornerstone of financial maturity.

Interdependence. In the final stage, maturity is the result of the dependence stage and the independence stage coming together in harmony. In the dependence stage, we learned to trust and love. In the independence stage we learned that we can trust ourselves as we develop real self-confidence.

When the trust of the dependence stage can successfully merge with the confidence of the independence stage, we get humility. Humility is a quiet strength that knows its capacities and limitations.

Confidence allows you to value your capacities and make your unique contribution. And trust allows you to face your limitations, secure that you can depend on others to provide strength and capability in those areas of weakness.

You want to see financial maturity in your kids? Show them that you are dependable and trustworthy. Gradually demand they become more and more self-reliant. Teach them that by contributing their strengths and leaning on the strengths of other trustworthy people, great things can happen.

Do that as best you can, and I’d say you’ve got a decent chance of one day seeing maturity (financial and otherwise) in the lives of your own children.

Byron is a Certified Financial Planner and Managing Director of the Planning Group at Argent Advisors, Inc.
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