In his astonishingly thoughtful book, Seven Stages of Money Maturity, author George Kinder identifies (obviously) seven stages of money maturity. It’s not a quick read and I’m not finished with it yet.
So far, I have learned that, in spite of my recent breakthrough, I’m still a ways off from money maturity.
In fact, I am just moving out of stage 2.
The first two stages happen in a figurative childhood phase. I say figurative, because you don’t have to be a child to be in this phase. You just have to be child-like. It’s about state of mind.
Stage one is innocence, and stage two is pain.
Unfortunately these are not linear stages, they’re cyclic. That means innocence leads to pain, which leads to innocence, which leads to pain, and so on, Â until one wakes up and notices being stuck in a cycle that Kinder refers to as suffering.
Can I get an amen?
Kinder writes: “Most of us recycle between Pain and Innocence in a way that prevents us from moving forward toward Money Maturity.”
I got that. For example, in my youth I believed that there would be plenty of time for me to save for retirement, and that I might not ever have kids so there wouldn’t be a need to save for college for anyone. That was Innocence.
When I got to age 39 and had my first child, and still didn’t have anything set aside for retirement, I realized I didn’t have the resources to stop working even for a few months to devote my full attention to my baby. That was pain.Â But we got through that, and I had a good business going, so I was sure it would all work out. Innocence.
Then the second baby came along at age 43 (me, not him), and I still hadn’t started saving for the first child’s college fund. At that point, I realized saving for retirement was probably moot because I’d be working until I dropped.
And the cycle is just as pernicious on a small scale as on a large one. Like at the grocery store, when I spend too much on groceries because I’m “positive” I’ll get a check in the mail by the end of the week (innocence). Â Then the next day my client calls to say she can’t pay me til the middle of July (pain).
As a nation, Americans seem stuck in this same cycle.
The economy booms, housing prices soar, and we take out loans we don’t really need and don’t know exactly how we will pay in full (innocence). The economy slows, housing prices crash, and there’s no money to make the loan payments (pain). But the economy always gets better, so if we can just hang on another week, another month, another quarter…(innocence).
We even commonly refer to the economy as a cycle, and we accept that it moves from boom to bust and back to boom. We are programmed to stay stuck in this cycle in a way that prevents us, as individuals as well as collectively, from moving forward toward Money Maturity.
So how do we break the cycle?
It’s all about awareness. First we must recognize that we are cycling and recycling, and that cycles are fundamentally stagnant, not forward-moving.
It’s really hard to do this when one is in the innocence phase, because innocence feels good, and why question a good thing? Pain is a much better motivator. When we are in pain, the pain is a signal to wake up. It’s uncomfortable, and we’re in a rush to get out of it.
But Kinder suggests that instead of narcotizing pain by choosing to cycle back to innocence we should wake up to the fact that cycling back to innocence is only a set-up for more pain.
It’s like taking an aspirin to quell a toothache: ah, the relief. Three hours later: oh, the pain. Perhaps it’s not an aspirin we need, but a dentist.
So this is where I find myself, per my last post: I’ve become aware of the cycle, and I’m working on using the pain to propel myself out of it. What’s next?
According to Kinder, I’m ready for the first of the three stages that happen in the adult phase of money maturity.
More on that next time, World of Dreamers. And in the meantime, do you see the innocence/pain cycle in your own money maturity behavior, past or present?
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Jayne Speich is a small business coach/consultant who writes, thinks, and coaches extensively on customer service, business finance, and ways to thrive in the new economy. She has an exciting new business venture with sister dreamerÂ Remy Gervais, calledÂ The Gazelle Goal. She is the owner ofÂ Onsys21 Dental, a coaching/consulting firm for dental practice owners. Plus, you can find her atÂ theselfreliantentrepreneur.com. Jayne’s post day is Saturday.