Frank and I were raised completely differently when it came to money and spending. I learned from an early age to save 5%, tithe 10%, and frugally spend the rest. I opened my first savings account in kindergarten and proudly squirreled away money for the end goal of a new toy. In high school, I had saved enough to visit friends in Estonia, which began a love of independent travel. Even on my meager teacher’s salary, I always managed to save enough for an international trip each summer.
Frank was raised to “spend it like you got it… and if you don’t got it, spend it like you got it anyway.” By the time he was in his early twenties, working at a well paying job, living at home, he was buying rounds of drinks for friends and racking up credit card debt. Fortunately, before we met, he had been converted to the Dave Ramsey school of thought: Live within your means, Save, Pay cash. When we were engaged, Frank had me read The Total Money Makeover, a book that changed his life.
In Smart Money Smart Kids, Dave Ramsey’s daughter, Rachel Cruze gives insights and practical advice to raising money-smart kids. Especially as we talk about how we want to instill financial values in our kids, I appreciated the step-by-step guides to gradually releasing money responsibility to kids as they get older. In the beginning, learning to earn to spend is all you need to focus on. As they get older, learning to spend thoughtfully and save responsibly becomes the focus. As teenagers, allowing more freedom and budgeting choices teach lessons that carry into adulthood.
Throughout the book, Cruze and Ramsey emphasize grace. There are no cut-and-dry scenarios – sometimes parents need to bail out their kids. Sometimes kids make bad choices and have to learn from the consequences. They repeatedly remind the reader to not be legalistic. I appreciated this underlying theme, as it can be easy to just want to follow the rules or formulas for success.
There were a few pieces of advice that I didn’t agree with. I don’t believe every teenager needs to save for a car. I chose to share my dad’s car in high school and it taught me how to be flexible with my schedule. It was also the first time I tangibly prioritized my love of travel and desire to save my money for that. Ramsey also devalues out-of-state colleges, saying that you learn the exact same material in-state. While my time at a private university in Paris probably didn’t teach me anything academically that I couldn’t learn at a college in Colorado, the life experiences I had and the worldview I gained were invaluable.
I would recommend this book for its financial advice. I do think it is so important to instill a groundwork of financial responsibility and understanding in children. Theologically, I feel uncomfortable with Ramsey claiming that wealth is biblical. He cites many verses supporting this idea, and even cites Luke 9:59, when Jesus talks about the Cost of Discipleship. Ramsey stops with the young man who needs to bury his father, and talks about how that’s an example of raising money-smart kids. Looking at the entire set of verses, they end with Jesus telling him to leave his father and follow him. That doesn’t seem financially sound…
All in all, I found the financial advice helpful in considering how we raise Bea, but wish Ramsey and Cruze had focused more on that and less on the theology of wealth.
What’s your favorite financial advice book?
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