Dave Ramsey has great money tips for adults, and he also has great money tips for kids. In fact, as I looked over the book he wrote with his daughter, Rachel, I noted some great ideas: have your kids work at home on commission; set up a “Parents 401K” for their first car, and bail them out financially…at the right time.
The money tips in this book are equally important for parents and children. Parents will learn how to handle specific situations so that they can train their children to save, share, and spend their money well.
Check out Dave Ramsey’s Top 5 Money Tips for Kids, and if you want to get started on training your children to be financially savvy, use our Share, Save, Spend Printable today!
1. Work is not a Four Letter Word.
Dave and Rachel say their “family business” is work. Rachel says that one of the standard chores in their home is keeping their bedroom clean. Dave and his wife Sharon didn’t expect the cleaning to be up to military standards, but they did expect the job to get done—for no allowance. Instead, the Ramsey family believes in paying a commission for work done. Sure, they say, you can surprise your children with gifts or money here and there, but their motto is: Work, get paid; don’t work, don’t get paid.
2. Retail Therapy is Not a Joke.
Want to get Dave Ramsey upset? Tell him you’re going shopping for a little “retail therapy.” In his book, Dave writes, “You are sending a horrid message to your children. You are saying…that anytime they feel sad…buying stuff will make it all better. Your example is everything when teaching your children about money.” So if you want to go shopping, fine, just be sure that you have the money to pay for what you’re buying and try not to present it as a cure-all to use when you’re feeling down.
3. Patience in Purchasing.
Rachel says her mom taught her the “wait before you buy” habit when she was a teenager. “Mom and I were out shopping. I saw a shirt I liked, but I kept going back and forth on the decision. My mom watched all of this happen and she strongly encouraged me to put the shirt on hold overnight. ‘But, Mom, if I leave it here, someone else will buy it!” When the next morning came around, Rachel didn’t want the shirt any longer. The lesson she learned and the one we can teach our kids is: “Waiting overnight takes the pressure off…it’s often as though a fog lifts and you can think clearly again. If you wake the next day and it still feels like a good purchase (and you can afford it), then go for it and enjoy it!”
4. The “Parents 401K” Plan.
“Mom and Dad told us from a young age that there wouldn’t be a brand new car in the driveway with a bow on it on our sixteenth birthday,” says Rachel. “They told us they would pay for half the cost of our cars. Whatever amount of money we saved, they agreed to match it. Dad likes to call this his “401Dave” plan.” This is a great idea. It encourages our children to save for a car and it encourages us to plan ahead too.
5. When to Bail Out Your Kids.
“Parents shouldn’t always step in and rescue their child when she doesn’t have enough money for her purchase,” says Rachel, “but please, please don’t go overboard with this.” Rachel goes on to tell the story of meeting a mom whose 10-year-old son had saved $300 for a PlayStation. When they got to the checkout, he didn’t have money for the taxes, so they left the store without it. “What?” Rachel says she thought, “Your ten-year-old worked and saved $300! You pay the tax!”
Use wisdom when deciding when to bail out your kids, but there will be times when it’s a great thing to do.
Find more great ideas for teaching your children in Smart Money, Smart Kids.
How do you handle the topic of money with your kids?