I like the way this book gives two perspectives. The first is from Dave Ramsay who explains how he taught his children money skills and the second is from his daughter, Rachel Cruze who explains what those lessons meant to her as a child and how her life was forever changed.
If you can set money management examples for your children, you can then teach your children how to manage their money. You will have given them the knowledge to be rich beyond their dreams. But to teach your children, you need to get your house in order first. I believe this book will give you the inspiration to do that.
Dave Ramsay is an American icon, who was sent bankrupt at the age of twenty-six when he was in real estate and the banks called in all his loans. At the time, he had a very young family. Dave and his wife vowed they would never borrow money again and they would instill in their children money values. Many of their beliefs are based on a deep religious conviction.
For his children, the first lesson from a very early age was to develop a work ethic. You work and you get paid. Next they had system where each week, the children received their ‘earnt money’ or commission as it was called. The children had to decide how much they would put into three envelopes:
If you need a kick-start to how you reduce your debts or how you teach your children to grow up not thinking everything is bought with a credit card, please watch this 4-minute inspirational video. Research has shown that adults are failing with money because of the money habits they learnt as children. Dave says that Personal Finance is 80% behavior and 20% head knowledge.
Reading this book will give you some fantastic ways to not only change the way you manage your money but give you children the money skills they need. As the title says:
Smart Money Smart Kids
Dave and his daughter have a system called “ The Five Foundations”, which I believe is an excellent system to start your new money management skills. These are the five foundations:
- Save a $500 Emergency Fund
- Get out of debt
- Pay cash for your car
- Pay cash for college
- Build wealth and give
One of Dave Ramsay’s famous sayings is:
If you fail to plan, you plan to fail
While this book is American where some of their tax and credit score rules are different from that in Australia, there is a wealth of information for people who want to manage their money better. The book title is “Smart Money Smart Kids”, but I would also say:
Smart Money Smart Adults
Glenis Phillips SF FIN – Good Financial Reads