How to Talk to Kids about Smart Money Management

This podcast will focus on how to talk to kids about smart money management with Rachel (Ramsey) Cruze. Many kids don’t learn about how to save, spend and give money until they are out on their own and in need of sharp money skills. During this podcast, we learn how to talk to kids about money so that they have the skills and knowledge early. When they learn about money management when the stakes are low and they are under their parents’ roof, they have the safety net they need to make mistakes. Then, when they are out on their own, they have the knowledge they need to make wise money choices.

Many children grow up with no clue about how money works—what it means to save for something they want, how to spend wisely, how work can translate into money and why we must give to others in need as part of our life’s journey. Somehow, in our busy lives, discussions about money get pushed off until later. But of you think about it, when kids don’t know how money works when they are younger and under your roof, it can set them up for some big money mistakes when they are away at college or off on their own. So “money talks” are some important discussions we all need to have with our kids.

My next guest knows more than a thing or two about these money talks as she’s been having these conversations as long as she can remember with her own parents—that’s just part of growing up Ramsey.

As a #1 New York Times best-selling author, host of The Rachel Cruze Show, and The Rachel Cruze Show podcast, Rachel helps people learn the proper ways to handle money and stay out of debt. She’s authored three best-selling books, including Love Your Life, Not Theirs and Smart Money Smart Kids, which she co-wrote with her father, Dave Ramsey. You can follow Rachel on Twitter and Instagram with the handle @RachelCruze and online at or

The podcast provides:

  • Why we need to pay our kids “on commission”
  • What children should get paid to do
  • What children should do simply because they are part of the family
  • How to teach the kids about saving and spending
  • What every child should be taught about money
  • What to say when your child says “but everyone has ______ but me!”
  • What to say in sticky money situations
  • Rachel (Ramsey) Cruze’s top tip

Important Messages:

  • We want kids to learn at an earlier age the tools that they need when it comes to money so they don’t have to re-learn it as adults.
  • Rachel’s parents filed for bankruptcy when she was a baby and it changed the course of her life. They decided they were going to budget and be in control.
  • Rachel was never just handed money- she worked on commission. You work you get paid- you don’t work, you don’t get paid. That simple. This sends the message that money is tied to work.
  • Put together a chore chart and put it up where everyone can see it. What do they have to do? How often do they need to do it? What do they get paid to do? How much will they get paid?
  • Pay day once per week. They learn cause and effect. If they did not do the chores, they don’t get paid.
  • Let kids make small, inexpensive mistakes when they are young so they aren’t making huge mistakes later on the car lot.
  • Have the kids save money to put towards something specific- maybe a 20 dollar item. It teaches learn delayed gratification.
  • When your kids have earned the money and they can save the money for something specific- they feel so good about being able to pay for the very thing they want.
  • Have some grace!
  • Be intentional as a parent about teaching about money.
  • When you don’t have the money for extras: You don’t want to scare your kids. But you can say; “this thing costs X- amount of dollars. And that’s a lot of money for Mom/Dad right now. Mom/Dad’s priorities are to make sure you are taken care of and our goal is ___________ (i.e. paying off debt, saving for something) That’s what we’re focused on but let’s make it a goal for the future to purchase something fun like this. We can- stuff is not bad but it’s only when you have the money are you able to do it—and right now, we don’t.”
  • When you don’t want to raise entitled kids: “Stuff is fun. But stuff does not cause happiness. You’ll get to see a lot of nice stuff and fun stuff because we live in a society where we see a lot of stuff. But this is just going to be another pair of shoes in the closet in 2 weeks. It’s exciting to get something new but the newness wares off so let’s focus on what you already have.”
  • When you want your child to save for it him/herself: “Good news! You get to buy it!” If it’s really expensive- and if you do have the money- you pay for half if they save for half. If they can do it on their own say; “let’s look at some opportunities for you to save some money. You can take out the trash X number of times…” Give them a road map- so they know when it ends and what they need to do.
  • We all have to deal with comparisons- use empathy. “Yes, I totally get that.” Share your situation – like friend at the beach. Comparisons are normal even for adults. “But here’s the deal- at the end of the day, your stuff is not your identity. It’s not what makes you who you are. And as your parent, I love you too much to allow that to be a stance that we take as a family.” Focus on their character quality.
  • Andy Andrews- “You’re not just trying to raise good kids, your trying to raise kids to become good adults.” 
  • Chores- they are a sign of obedience. You have to learn how to do these things because you have to learn how a household is run because I’m not training you to be an 11 year old kid your whole life, I’m training you so when you leave the home, you have not only the character qualities to have a good life but you have the tools in your pocket so you can win.
  • Admit that chores are not always fun but they have to get done or there are consequences – trash piles over, for example.
  • We can have higher level conversations with our kids- it pulls them upwards so they can rise to the occasion.
  • Reality- the house belongs to the parents not to the children. “I love you too much to allow you to spend your money on these things- I have a say.”
  • Keep values consistent even as you are allowing your children to earn and spend money.
  • Debt is one of the most damaging part of our money. People live pay check to pay check. Teach kids to live below their means.

Notable Quotables:

  • “Growing up as Dave Ramsey’s kid, my parents were so great about teaching us about how money works and how to avoid many of the mistakes they made.”
  • “We want kids to know that debt does not need to be part of their story. There’s a different way.”
  • “I looked at my Dad, Dave Ramsey, as the emergency surgeon and I was the preventative medicine.”
  • “When parents understand money and have a financial plan—not only does it change their life but it changes the legacy that they leave.”
  • “Children should work on commission rather than just being handed money. You work, you get paid. You don’t work, you don’t get paid. Wen you do that with your children, they learn that money comes from work—not from Mom or Dad’s back pocket- and they have skin in the game. When kids earn their own money, they give it differently, they spend it differently, they save it differently, they interact with it differently.”
  • “When it comes to money, there are so many teachable moments. And when you learn them at 6, 7, 8, 9, or even 15- it’s a blessing. You can make these small, inexpensive mistakes- and there is safety in it since they are under their parents’ roof instead of having their first time be on a car lot making a 30,000 dollar mistake.”
  • “It’s not the dollar amount you give for chores that’s important, it’s the lessons the kids are learning.”
  • “Too much grace is enabling but too many rules is legalistic.”
  • “When you’ve learned that the only way you can by something is when you have the money, it forces you to have the patience and it forces you to save. That character quality goes into other parts of their lives.”
  • If your child pushes back on chores: “You have to learn how a household is run because I’m not training you to be an 11-year-old kid your whole life, I’m training you so when you leave the home, you not only have the character qualities to have a good life but you have the tools in your pocket so you can win.”
  • “I think we can have those higher level conversations with our kids and not always dumb them down.”
  • “Some kids believe that the axis of the world runs though the center of their head. Some parents have built their lives around their children. Children can’t craft ownership around things that are not theirs. You are still the parent.”
  • “Teach kids to live below their means.”


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