Smart Money Smart Kids: Raising the Next Generation to Win with Money

Dave: The first group I ever spoke to about how to handle money was a Rotary Club with forty-three people in the audience. I used an overhead projector, and I actually had hair. That was a long time ago, many air miles ago, and several million people in audiences ago. When I finished my big presentation that I had practiced for hours in front of the mirror, I walked to a table in the back of the room to sell copies of my little self-published book, Financial Peace, for twelve dollars each.

After I covered the basics of money (which is what I still do), everyone at the seminar agreed that common sense is not really all that common. I’m sure as that first person—a middle-aged woman—walked up to the book table, she saw a young speaker relieved that his big speech was finished. I will never forget her comment. Holding my little book, she looked at me and said, “Dave, that was great information. Why don’t parents teach their children about money? Why don’t we teach basic money skills like this in schools? Our kids need to know this information.”

She was right. This mom knew she had never been taught how money works, and she felt inept. She knew she could learn and work toward a better understanding of money, but she also had a sense of sadness knowing that she had not taught her children about money. Nor had anyone else.

For the last several decades as I have done media, spoken to millions in audiences, and traveled America, that scene and those questions have been repeated thousands of times—“Why don’t we teach our children common-sense money principles?”

Virtually all of us teach our children about things in which we feel competent. I have a friend whose dad is an excellent mechanic. That guy spent hours talking cars, laying under them or leaning over them. The dad and son built engines, played with gears, and did brake repairs every weekend and most evenings. And when they weren’t working on something mechanical together, they were talking about it. Is it any wonder that my friend is a serious gearhead? He loves anything with a motor, and he is great at it. It is a family tradition.

I have another friend whose father was a two-term governor of our state and was the youngest governor in our state’s history. So my buddy was a little boy living in the Governor’s Mansion. That family spent most of their energy, time, and dinner conversations on politics or public service. He literally cut his teeth on politics. Just by being present, he was taught by osmosis. Is it any wonder that he loves politics, became a U.S. congressman, ran for mayor, and served in multiple high-ranking public service offices? He loves anything having to do with public service. It is a family tradition.

I have another friend whose mother is a well-known author. . . . You finish the story. I have another friend whose father was always starting businesses, making them successful, then selling them. . . . You finish the story. I have another friend whose father loves aircraft, piloting, and aircraft history. . . . You finish the story.

We all have a family tradition. Sometimes it is a sad legacy, one that you work not to repeat. Children are sponges—they are going to absorb whatever is around them, so we need to be intentional about what surrounds them. The good news is you can choose your family tradition for the next generation. It is a choice.

People with wealth—who also have a healthy understanding of wealth—don’t obsess about money or worship money. They are, however, intentional about how it is handled, and they make sure their children know how to handle money. It is a family tradition.

When my wife, Sharon, and I went broke, lost everything, and filed for bankruptcy, we were two twenty-eight-year-olds with a toddler and a brand-new baby. I did stupid things with money, which wrecked that portion of my life. When I discovered common-sense, biblically based financial principles and applied them, our lives started turning around and we began to win with money. As we got to where we could breathe, the first thought we had was to make sure financial stupidity never happened to the Ramsey family again. The second thought was to safeguard the next generation. We declared not only that we would never be in that situation again, but also that we would permanently sear proper money principles into our children’s beings so they would never be in the same situation. We declared that we would change our family tree.

So Sharon and I, that scared and scarred young couple, made the declaration that where money was concerned, we would start a new family tradition—a tradition of money knowledge, money character traits, and wealth. The good news is, it worked. Our lives and family tree have been changed because we have raised three money-smart kids.

This book is about you starting a new family tradition with money. Rachel and I are going to teach you practical, tactical, spiritual, and strategic principles that will change your family tree. You will either intentionally teach your children how to handle money or they will live in your basement until they are forty. You will either model how to handle money or they will struggle like the rest of our culture, where common sense isn’t common.

I will never tell you that the Ramseys have it all together or that we’ve done the things in this book perfectly every time. There were times I was an awful money dad. There were times Sharon folded under the pressure of a whining kid in a store aisle. We are not perfect, nor were we perfect when raising our money-smart kids. But we did model good money principles, and we tried hard to intentionally create teachable moments about money for our children.

You may be late to the party with older kids. You may be excellent with money or not. You may be just starting your family. Wherever you are, you can teach from today forward and begin a new family tradition with money. You don’t have to be perfect, nor do you have to be paralyzed by the mistakes of the past. You simply have to start. You can start today and grow money-smart kids.

While we have never perfectly executed the money-smart principles we teach in this book, we have succeeded in raising money-smart kids. Of all the successes, accolades, and fame I have been blessed with, what I am most proud of are my children. Sharon and I have three competent, confident, poised, and wonderful adult children. They are winning at their spiritual walks, their marriages, and their careers, and all of them handle money well.

Our daughter Rachel has become a world-class communicator teaching these principles to audiences of every age and size all across this country. Her favorite thing to do is guide and teach families how to start new money traditions like we did. Of course I am her proud dad, but as you read her words, you will quickly say to yourself, I want to raise kids like her. And you can.

The bottom line is this: If the Ramseys can go from stupidity on steroids, to bankruptcy, to a new family legacy and a new family money tradition, you can too. Hold on. This is going to be a wild and exciting ride.