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Hey Little Spender 

Father-daughter duo Dave Ramsey and Rachel Cruze share tips for raising money-wise kids.


Spirit: Why teach children money management? 

Dave: Parents should adopt the idea that teaching a kid about money is a life skill. We teach them to brush their teeth and drive a car, so we should teach them about personal finance. Your economic strata, the neighborhood you live in, and your race don’t enter into it; it’s something anyone can do. 


S: Where to start?

D: The first step is to get your own act together because your kids are observing you. It’s going to be very difficult to motivate them to do things you’re not willing or able to do yourself. You don’t have to be perfect, though. I don’t have to have gotten a 4.0 to require my children to study, but I do have to make the effort.

RACHEL: The idea is that more is caught than taught, and your kids are watching.


S: If parents shouldn’t try to turn a spender into a saver or vice versa, what should they do?

R: Since people are generally wired one way or the other, you’re trying to find a balance between the two. If you live your whole life as a saver, it’s going to be pretty boring, but if you’re a spender, you’ll have no money left. Your goal is to teach your kids to find the balance between enjoying money when they make it and being responsible and saving up for things like retirement.


S: What’s one tip parents can implement today?

R: We recommend using a commission system: kids work for their money, and then you divide it up into three envelopes: “give,” “save,” and “spend.” But don’t make the mistake of holding on to those earnings yourself—then you get 16-year-olds who don’t know how to write a check or swipe a debit card. And when they’re 18 and they go out into the world, they have no foundation for managing their own finances. I encourage parents to let kids experience money on their own—but with Mom and Dad’s guidance.   


Dave Ramsey and Rachel Cruze are the authors of Smart Money Smart Kids: Raising the Next Generation to Win with Money.

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