Latest / The Action Catalyst / REMASTERED: Smart Money, Smart Kids, with Rachel Cruze (Finance, Parenting, Debt, Author)

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REMASTERED: Smart Money, Smart Kids, with Rachel Cruze (Finance, Parenting, Debt, Author) · The Action Catalyst

• 0:00
  Host: So blessed and lucky to be bringing to you Rachel Cruze.
• 0:35
  She is a great communicator. Rachel's in the media, and she's
• 0:38
  just quickly becoming a celebrity and a superstar that's
• 0:42
  making a big difference in the world. Rachel, welcome to the
• 0:45
  show. Thank you for being here.
• 0:46
  Rachel Cruze: Oh, thank you so much for having me. I've been so
• 0:49
  excited about this. Thank you.
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  Host: So tell us. I mean, just, what is it like growing up,
• 0:53
  Ramsey, like, what is it like growing up in a house with Dave,
• 0:56
  and what are some of the things that are really different about
• 0:59
  you from him, in terms of the way that you grew up, and just
• 1:02
  kind of talk to us a little bit about that.
• 1:03
  Rachel Cruze: Sure. Well, yeah, everyone's always curious about
• 1:06
  growing up in Dave Ramsey's house for sure. And I think some
• 1:09
  people have the misconception that we had, like mutual fund
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  parties and budget retreats on the weekends and that kind of
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  thing. And thank goodness that was not the case. Mom and Dad
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  were obviously intentional with teaching us about money. But it
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  was, it was sort of cool style parenting in the sense that they
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  just saw teachable moments, you know, throughout the day,
• 1:29
  throughout the week, so they would talk to us about money.
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  And I think some people, you know, think that we were like
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  little money robots or something, and we were all
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  obsessed with money, and that was not the case. And really the
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  great thing mom and dad did that helped us now as Ramsey kids,
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  there's three of us in the family, so now we can kind of
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  stand on this solid financial ground and win, and thankfully
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  win not because we're Dave Ramsey's kid, but because we are
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  top these principals. So now we get to apply that to our own
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  lives.
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  Host: So the book Smart Money, Smart Kids. Why is it that more
• 2:00
  parents don't teach their kids about money in the first place?
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  Rachel Cruze: Yeah, I really don't think parents are I think
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  Host: So if I'm a parent, I'm listening to the show. What are
• 2:06
  money is a very shameful topic. I think it's a very intimidating
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  topic. And so some parents look back on their own mistakes and
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  some jobs that parents can do with their kids at all the
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  they think, you know, there's no way I can teach my kids about
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  money. We handle money horribly. You know, parents though, so we
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  don't have the right we don't have the knowledge to teach our
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  kids. So I think there's some of that. And honestly, I think
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  there is a portion of America, and a large portion that is
• 2:27
  stressed out about money, you know, in their own sense. So
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  they're living paycheck to paycheck, they have debt,
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  they've like they're not able to invest for retirement, you know,
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  all these stresses. So they don't even think about it. I
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  don't think they don't have the time to sit down and talk to
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  their kids. And so I think it's kind of a mixture of all of
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  that, but I am finding kind of this lack of knowledge, if you
• 2:47
  will, on this subject, and so it's not taught in schools. And
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  sadly, a lot of parents aren't talking to their kids about it.
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  And if you know mom and dad's story at all, they actually
• 2:55
  filed for bankruptcy when I was six months old. And so and they
• 3:00
  can bounce back and teach us to avoid those mistakes. Any parent
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  different ages, right? You know, like, at what point can they
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  can do that. And so with this book, you know, I really, I look
• 3:07
  at dad's message as kind of the emergency surgeon, and I'm the
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  preventative medicine. You know, your kids are your do over.
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  They're your clean slate, and so don't feel like your mistakes
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  have to haunt you into your parenting by any means.
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  start helping around the house? And what are some things as
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  parents that we can do to put our kids to work early, to sort
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  of teach them about money and create these teachable moments,
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  as you call them?
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  Rachel Cruze: Yes, well, giving them the value of work is
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  tremendous. I mean, a job well done, feeling like you completed
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  something, you've accomplished something, there's dignity
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  attached to that. I think some parents are fearful that they
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  don't want their kid to feel the hard shifts in times of life,
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  and they don't want them to have to make hard choices at their
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  time and all of that. But doing those things and making your
• 3:57
  kids work, it really is a guess, and you can start that we pay as
• 4:01
  early as four years old. I mean, a four year old can pick up a
• 4:05
  few toys and, quote, unquote, clean their room. But we all
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  know four year old does it clean the entire room up to four and
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  so they pick up seven or eight boys and and I say at that young
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  pay them instantly. So if you're financially able, whatever it
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  is, you know, a quarter or $1 bill, whatever it is, pay them
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  instantly and show them that money come from work. Making
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  that connection for them early is so key. So it's a four year
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  old. So you're not, you know, setting up a boot camp for small
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  children a bit those four year old can maybe have two or three
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  responsibilities. You have made matching socks in the laundry,
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  or helping feed the dog, or just little things they can do. And
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  again, you know, maybe 2, 3, 4, things and pay for, and as they
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  get older, their responsibility should increase. And so, you
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  know, doing things like cleaning their room, their entire room,
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  making their bed, helping with the kitchen, helping with the
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  laundry, taking out the garbage. I mean, there are plenty of
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  things kids can do around the house. And again. I would
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  encourage parents to pay your kids on those chores. And there
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  will be some chores your kids will do because they're part of
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  the family. And so for us, growing up, of room to kid, the
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  kitchen was always a place. We never got paid. We always were
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  expected to set the table, to help clean up, to help mom do
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  the dishes. The older we got, because that was just, you know,
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  to show my mom that we love her and we appreciate her. So there
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  is some act that you're going to do around the house just because
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  you're part of the family. You're not just trying to raid
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  good kids. You're trying to raid good adults. And so that's what
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  you're doing, is you're giving your kids a tool set. So when
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  they leave the home at 18, whether they're going to college
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  or just out to the real world, they know how to handle
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  themselves. They know how to take care of themselves.
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  Host: So there's this concept, which I just think is hilarious.
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  Can you explain what the 401 Dave plan is and and why that's
• 5:48
  important, and how that worked?
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  Rachel Cruze: Yes. Well, growing up, mom and dad always
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  told us that they were not going to pay for our cars we turned
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  16, that we had to pay for them, but what they were going to do
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  is actually match the amount of money we saved. And so Dad
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  coined the phrase 401 Dave. That's what he called it, the
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  401, Dave. So the matching plan, if you will. And so, yeah, this
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  was great. I mean, it made us, you know, depending on that How
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  nice of a car we wanted, depending upon how hard we
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  wanted to work and how much we wanted to save. And so going
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  through that process was incredible. And writing that
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  check at 16 years old, I actually say that $8,000 so,
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  yeah, I had, I got $16,000 to pay for my first car. Well, I
• 6:31
  always tell parents, you know, maybe it's not the amount,
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  necessarily, or even the match. I mean, if you're not
• 6:34
  financially able to match your kids, then, then that's fine.
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  But just the process of saving up and paying for something.
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  It's just tremendous. I mean, this is such a culture, such a
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  generation of instant gratification, that we cannot
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  anything we want when we want it, and so making your kids stop
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  delay that gratification, have the patience to say, to reach a
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  goal, to have something out, you know, in the future that you're
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  that you're working towards. I mean, it's incredible. The
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  saving money, I don't think, is just to put money away in a bank
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  account and just watch it grow. I mean, you're teaching your
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  kids a lot of life principles through this process of saving
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  money.
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  Host: Another thing you talk in this book about the power of
• 7:13
  giving and how and when and why, you can teach your kids to give.
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  So can you just give us some ideas on how and why and when we
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  should be teaching our kids to give?
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  Rachel Cruze: Sure, well, I suggest parents, you know, once
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  they do their chores and they get paid some money, yes, to
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  teach them, the very first thing they need to do is give. And
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  this can be giving to, you know, maybe a church or a non profit
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  or a charity organization or the homeless shelter, find something
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  that maybe you're you're child passionate about, and see if
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  there's an opportunity to match their passion with a giving
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  opportunity. We don't have a bunch of selfish world. And so I
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  think you know, when you give, you're saying no to yourself,
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  and I think that's an important quality to have. Sometimes. I
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  think giving is the antidote to selfishness and selfishness, I
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  think, in arrogance and entitlement, it's all kind of
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  wrapped in together, almost. So this idea that it's mine, you
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  have a close fit, and I deserve this, you know? And it's all
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  these kind of emotions. And people who win this money are
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  givers. They give of their time, they serve people. They're
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  surrogate leaders. They give of their money as well. They're
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  giving spirit. So when you live with an open hands, it's not a
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  prosperity gospel kind of thing, but I do believe you're blessed,
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  and not in a financial sense, but for your heart. I mean, it's
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  amazing when your heart changes as you're able to help people.
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  And honestly, I think giving is probably the most fun you can
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  have with money. I mean, you can buy some fun things, some fun
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  toy, the fun car. I mean, there's some things you can buy
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  with money. That's fine, and it's enjoyable. It's a joy of
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  giving. There's nothing like it. And so to be able to experience
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  that as young as 5, 6, 7, years old, all the way up through
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  being a teenager, giving your kids the ability to give and let
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  them experience that, it's almost contagious, and when you
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  think of a child, he's grateful and he's willing to help, who's
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  learned to hold a door. I mean, these little attributes
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  magnified when they're able to give financially at things. I
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  think giving can start anywhere in your life, but when you're
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  able to hand over your your own money that you worked for, that
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  that sense of gratitude and and thankfulness, I think, just
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  flows out of you.
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  Host: So one of the things that's a big expense for people
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  in life is paying for college, right? What are some things that
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  both parents and students can do to help them pay for college
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  without getting into debt?
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  Rachel Cruze: Sure, well, there's lots of options, which
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  is wonderful. So if you are a parent, first and foremost, I
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  would say, do not feel the pressure. Don't feel shame.
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  Don't feel like you're a horrible parent if you're not
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  able to help out your kid college. College is not an
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  entitlement, it is a blessing, and that you as the parent are
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  not responsible for that if you are able to help that the gift
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  at the blessing your child should be very thankful. But it
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  is not an entitlement. It's not a right for them to go to
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  college and you pay court. Sure. So, you know, open up a 529 plan
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  or an EFA, look into saving for your kick college. But if you
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  had a teenager in the house and you out there, headed up the
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  school in the next year or two, and you don't have money saved,
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  there's still ways to go to college debt free. Number one,
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  choose an affordable school. So for a lot of students, that's
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  going to mean staying in states, taking in thick tuition, or even
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  going to a community college for the first year, or maybe even
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  the first two years, and then transferring. But do that, I
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  mean stepping over a state line to go to the public schools of
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  the state next. You can call up at the three times the amount,
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  and you're basically getting the same education. So don't do
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  that. Private, fancy schools, and do they have great
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  education? Sure, absolutely. But that you don't have to have a
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  degree from where those schools to go out and win in the
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  marketplace. So don't believe that lie either. Now if you have
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  the money to send your kids anywhere, and that's fine, but
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  going into debt for an out of state school or a private
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  university is just not wise. So going to that affordable school
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  number two, scholarships and grants apply for as many as
• 11:00
  possible. I was talking to a girl in Texas, as she said, her
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  mom was a single mom made her apply for two scholarships a day
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  to doing that. And then lastly, research has shown that that the
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  average college student can work, or will work 20 hours a
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  week. They can pay their way through an in state school. So
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  you can literally work your way through. And so by doing those
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  kind of thing, talking to your financial aid office, then we'll
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  even break up a semester into a cash payment plan, where you pay
• 11:28
  a little bit at the beginning and then some in the middle, you
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  know, maybe they can work with you with that. So if you have
• 11:34
  your child that's a junior even, you know, starting a junior of
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  high school next fall, there's still time. And just doing those
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  three things, I promise you can go to full debt free.
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  Host: The one word that appears in this book Smart Money, Smart
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  Kids over and over, and I really love this word, is just
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  contentment.
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  Rachel Cruze: Yeah. I think contentment is a key principle
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  when it comes to teaching our kids about money. If you do not
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  have content kid, they will forever be trying to fulfill
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  themselves with stuff and spending money and figuring out
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  what's going to make them happy. And so being content is not
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  being, you know, apathetic or thumping lazy, but it's really
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  having peace with this where you are in life, and just being
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  content. And I think contentment comes from a heart that's
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  grateful, and that grateful heart, again, kind of wraps back
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  around to when your kids are giving.
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  Host: I love it. Well, Rachel, you are a joy. It's a joy to see
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  you. It's a joy to interact with you. It's a great book.
• 12:27
  Rachel Cruze: Thanks for having me on.