The Rachel Cruze Show - How to Teach Your Kids About Money

Episode Date: April 1, 2019

If you don’t set the foundation for what your kids learn about money, they’ll pick it up somewhere else. So in this episode, you’ll find out: How to teach your kids about money the way I learned from my dad, Dave Ramsey The best ways to break down the walls between you and your teen to make a real connection (Guest: teen and millennial expert Anthony ONeal) How a family of four paid off $303,000 in debt and got their kids involved in their debt-free journey Resources: Start reading The Contentment Journal for Free Buy The Contentment Journal   Smart Parent event                 Smart Money Smart Kids        The Graduate Survival Guide  Learn more about your ad choices. Visit megaphone.fm/adchoices

We didn't have a penny to our name. I couldn't believe I had gotten this bad. For a lot of parents, when they're talking to their kids about this, there's this balance of sharing but not scaring them. We brought them into the whole mix. Told them what we were doing. Kids want to be good kids. What it deals with is the character of who the kid is.

Parents need to come together and say, hey, son, I know you have the right heart. Let me teach you how to be this. Hey, guys, I am so excited about this episode of the Rachel Cruise Show podcast, because it is all about you, your kids, and of course, money. That's right. So in this episode, we're going to talk about my top three tips for teaching your kids how to win with money. I'm going to have my friend and teen expert Anthony O'Neill on to help us break down the

walls and really connect with our kids and teenagers. And then last but not least, we're going to have a couple on who paid off $303,000 in debt. Yeah, $303,000. Unbelievable. Their story is absolutely incredible, and they're going to talk about how they taught their kids along the way, which is even more inspiring. And so before we dive into all of that, I want to tell you guys something that I'm really, really excited about. And that is my new contentment journal.

Oh, I cannot wait for you to see this, to go through it, because contentment is something that so many of us struggle with. And it's a word that's thrown out a lot. That's everyone hears and they're like, oh, yeah, contentment. Like it's like something that we all know we should have, but we don't know how to get there always. And so through my own personal experience of understanding contentment, I have learned that there's kind of this three-step process, starting with gratitude, which leads into humility, which leads to contentment. So I kind of took these three buckets of character qualities, really, and decided, man, if you could sit in these over a period of time, how helpful that would be. And I personally have this love for journaling. I do. I love to write things down. I love to journals. I thought, man, what if I pair journaling

and this idea of contentment together in one thing? And so what it is, it is a 90-day guided journal every day throughout the 90 days. You will have prompts. And again, you'll spend the first 30 days with gratitude, the next 30 days in humility, and the last 30 days in contentment and breaking down and teaching on each of those subjects. And hopefully you go from a point where maybe you're feeling discontent with your life, maybe your career, your relationship. your lifestyle, whatever it is, and through these 90 days, through this process, this guided process, you will find contentment. So I'm so pumped about it. So click the link in the show notes to get your copy or to even start reading for free. We're going to give you a sample. So make sure to check that out.

All right. The first thing we're going to dive into when it comes to your kids and money is my top three things to know when teaching your kids about money. Here are a couple things to keep in mind. Number one, you have to realize it is your responsibility to teach your kids about money. It's not the school's responsibility. It's not the church's responsibility. It's not TV's responsibility. No, it is your responsibility. You really do. You have to take that weight on yourself, that it is up to you. And a lot of parents are like, well, who am I to teach my kids about money? Like, we're living paycheck to paycheck. We're deeply in debt. Like, we've been terrible with money. Who am I to teach my kids about money? Who are you? You're their parents. Yes.

I don't care what you've done in the past. That does not have to dictate your future and it does not have to dictate your kids' future. I mean, I look at my parents' story and they filed for bankruptcy the year I was born. And thank God, Dave and Sharon Ramsey weren't like, well, who are we to teach people about money? We're terrible at it. I guess that's just who we are. No, they didn't. And because of that, my life has changed and so many other people. So like, you do. You have to take that responsibility. Now, more is caught than taught. So your kids are watching you. So parents, get your stuff together. That's going to be important. But take it on. Don't let those past mistakes dictate your future or stop you from teaching your kids. Also, keep all things when it comes to money age appropriate, okay?

Working and learning that your kids, you know, need to work and that they get paid for chores, that they're not just given an allowance, that they are. on commission is really important, but you're not going to make your four-year-old go mow the lawn. Like, okay, we're going to keep it very age-appropriate. You're going to teach them to give, save, and spend. Again, all those things. And I think it's great for kids to save up for things, even like a car when they turn 16 years old. I think that's a great thing they can be saving for. But you may not want to start that when they're four. And last but not least, I love Andy Andrews quote. He always says, you're not just trying to raise good kids. You're trying to

raise kids to be good adults. And I love that because what that shows is not just the tactical things that you're teaching your kids, but it's also the character issues. It's all of it. And so what you have to understand is like some parents think, oh, well, I don't want to make my kids give. I don't want to make my kids do certain things. And I'm like, well, you make them brush their teeth. You make them do their homework. Why? Because that's going to allow them to do better in life later on. And the same is true with money. And so look at it as not just being good in the present. Look at it that who they become is what you're going for. Think about the future. And my parents said this a lot with me. I remember being just a young 14-year-old. My sister, 16. And my dad came in to the living

room one day, and he set us down and he said, girls, I want you to learn how to run a business. And we looked at him and thought, you're crazy. We don't see. We don't see. that to him because, well, things would happen. We just thought in our heads, both of us, like, what? You want us to run a business? And he was like, all right, you guys, think about a business idea tomorrow. We'll regroup. And I want you to tell me what you're thinking. And he left. And we were like, what? And so we grew up in a household that, like, if the parents said it, the kids did it, kind of thing. So we were like, okay, what is he doing here? So Denise and I came up with a business idea. Hold on to your seats. I know you're very curious about it. I'll be telling you in just a second.

But we went in. We had to present our idea to him. And then he helped us make like P&L sheets and understand profit and loss and margin and all the things. And so we started our very own business. My sister and I did that year. A little bit unhappy about it, but we did. So we came up with an idea that in his office building, there were different kitchens on the levels. They had two levels at the time of this office building, and these kitchens and vending machines outside the kitchens. And the vending machines were like way overpriced. And we're like, well, what if we put snacks on the counter,

drinks in the refrigerator, we charged less than our competitors' prices, aka the vending machines, and we made some money. And people bought snacks from us. So we started a snack business, and we called it Your Integrity Snacks, because you had to pay for it. So Denise and I started it. So we went and got into her Mustang. Yes, Denise drove a Hunter Green Mustang with a lay around the rearview mirror.

And there we went off to Costco, loading up the flatbed with cases of coax and diet coax and Dr. Peppers and Snickers bars and Reese's and bags of chips. People are very healthy at my dad's office, obviously, at the time. but all this stuff, like all these things did it. And we came back. I remember the first week, and we opened up those little plastic jars, and we were like, my gosh, there's money in there. People actually bought from us. Like, it was actually pretty amazing.

And so we'd take the money, we'd sort it out, we'd go buy more inventory, and the cycle kept going. About six months then, we did realize that we were short some money. More snacks and drinks were gone than money in the little plastic jar. So, true story. Dad actually had to send the company-wide email to remind everyone to pay for their snacks because some people were not having integrity. And so they were taking our snacks, but they all paid. And then we actually had like a major surplus the next month. So I think they felt bad and gave us some extra money. But I remember this little business we had, and I remember the first big investment we made. We were so proud of ourselves. we bought one of those electric coin sorters. So instead of like manually putting the coins in,

the little wrappers, which we had done for about four months, we ordered, I think off of a 1-800 number, off a TV commercial, but you pour all the coins in, and it sorts it all. And you could just go to the bank and bring the rolls, and it was so easy. But to this day, does it live on about 15 years later? Yes, it does. For real.

Now we have like five different buildings here in Nashville. so everyone's spread across all these campuses. But yes, in all of the kitchens, other people have taken on your integrity snacks. And what's so fun is not only does the legacy of your integrity snacks live on, but these people legitimately are making money. They're putting it towards their debt.

They're using it to go on family trips. Like, it's awesome. I feel like I totally should have franchised that I could have begun to cut all these years, but that's another story. So yeah, so we did this whole thing, and I'm telling you, we were not happy about it all the time. But I really am thankful mom and dad did that.

It's a little extreme. I'm not telling you that you have to make your teenagers to open up their own business. But there is something about empowering your kids and showing them that they can do things that they may not think is possible. And there is. There's a sense of pride when you do something

and you carry those big cases of coax up the stairs and your little 14-year arms are shaken. But then you take that money out of the jar. There's something about it that you just feel good about. And so seriously, press in. Your kids can take it. do more than what you possibly think they can do. And when they start to learn responsibility, it's an amazing thing how that trickles in to other areas of their life. All right, hope you

enjoy little Your Integrity Snacks. I should have copyrighted that title, but you can take it for your kids if they want to use it. Totally fine. All right, coming up next is fellow Ramsey personality and expert when it comes to talking to teenagers, Anthony O'Neill. When I think about teenagers, that's like the one type of parenting that really intimidates me. So if that's you two, Anthony is about to put us all at ease. He's going to tell us the four things that kids want their parents to know, so you don't want to miss it. You are like brilliant when it comes to talking to parents about teenagers, because you worked with teenagers for years and years. So you have four really great points when it comes to things that parents need to know of what their

teens are thinking. So walk us through that. Well, I wouldn't say I'm brilliant, but I would definitely say I'm passionate about helping kids and teenagers connect better to their parents. Because I believe those two have to be connected so that the teen can have a better future. So one of the first things that I'm seeing is that teens are saying, you know what, our issues are real. And where we are right now may not be the same from when you were a kid. Okay. That's good. And so what they're simply saying is like, hey, growing up in school today in the year 2019 is not the same as 10 years ago.

Yeah. They're saying times are different. And so just understand where I am and understand what I'm going. going through and just value that and help me go through it right now. That's so good. Okay, what's point number two? Point number two is, you know, the kids are saying, we're listening even if I don't show it. So, like, even if you think I'm not listening, Mom and Dad, I am listening.

Yeah. And this generation is a little bit more different on how they express themselves. They tend to keep things on the inside. So just be there and just understand. And ask them, did you hear me? Yes, ma'am. Did you hear me? Yes, sir.

Okay. And then move on. Just ask. Unless they roll their eyes. No. They may not have done that a few times, Dave Ramsey. That was not good. Yeah, this is the Rachel Cruz.

Respect is still in play, but they may not look. They may not look very enthusiastic as they're listening. I'm still scared of my eyes and my mama now. I know. That's right. Okay, what's next? The next one is, believe it or not, Rachel, kids want to be good kids. I've never met a kid that says, I want to be a bad kid.

I want to be a horrible kid. No, I just believe that they make bad decisions. But I think here, their definition of good may be a different definition to parents. And I think parents need to come together and say, hey, son, I know you have the right heart. Let me teach you how to be this. That's good. Let me show you how to become a good young man or a good young lady. Right now, you're a young kid.

That's good. All right. Last but at least. This is when I really agree with Rachel. Let them be kids. Let them be 10 years old. Let them be 15, let them be 18, let them be young kids. I think oftentimes parents have, man, you're going to be this doctor, lawyer, this, this preacher, this, this, this, this, no, right now, he's 11.

Yeah. Let him enjoy playing soccer. Yeah, that's so good. And I love all those points because what it deals with is the character of who the kid is and the parents and the teenagers aligning, which is hard. It's a hard seasonal life. And so you're great at navigating that, so I appreciate it. Okay. So I went into our Facebook community.

Okay. And we got some questions. Okay. So I wanted to dive into three of those questions. Lauren asks, how do I encourage our commission system when Nana pays 10 times what we do? The kids don't want to do chores at home when they know they can make more elsewhere. We tried talking to Nana about it, but she has taken the act now, ask forgiveness, later approach. All of our requests seem to have fallen on deaf ears.

Well, those are smart kids. They know they can make more. making bed at nannas than they get in your house. No. This is a tough one because I feel like when parents or extended family try to help out, but they kind of trump almost what the parent is doing, either with the amount of money or maybe they're totally negating the whole commission system in general. It can be hard.

So I think that the fact that you guys have had conversations is really, really important. I think that's great. But what you could do is say, okay, the money that you're going to earn at nannas, you're going to be making more. So we're going to be saving up for a more expensive toy. And that money goes into this little savings account. And so we're going to expect more from you because you're making more here. And I don't know.

That's a hard one to navigate. Do you have any thoughts? Something like this is happening with my nephews and my sister's son. One thing I love that belief in my sister did, they went ahead of a conversation with NETA. Yeah, hey, mother, this is what we're trying to do at our house. Can you help us with this over here because it's causing an issue? Yeah, yeah. have the same expectations.

Have the same expectations. Yeah, that's good. Jennifer asks, I need to know how to best help my teen son with contentments, especially when it comes to vehicles. Ooh, that's a tough one. If you are a parent and you are driving a high-end car and everything about your life is very high-end, one thing that you say, Rachel, which I love, is more is caught than taught. And so if your kids see this high-end lifestyle, then they're naturally going to win a high-end car.

So the very first thing is probably self-evaluate what are you and your husband or you or your wife presenting to your children. After that, too, explain to them, you're still young. And so you don't need a big expensive car. You're going to get right in this price range and I always recommend every high school student spends no less than a thousand. Because we want a quality car that's going to run. And no more than $3,500. And that they make 50% of that and their parents matches that 50%. Good. And so even if you want to get a $10,000 car, tell them like, hey, not right now.

Yep. But have the conversation. Be honest. Be understanding. Be loving. But tell them up front, we're not doing it. I think that's a great point, especially if you're driving a nicer car. You can't just be absolutely shocked in Florida that your child wants a nicer car too. I never really thought about that. But like, yes, that's a great point. So good. All right. Lisa asks, what do you do when you're in baby step two and you'll be there another three to four years, but you have two kids? kids going to college in four to five years, how do we save up in time for that? They already plan on doing two years of community college. Great job. First, but are hoping to get some funding. Obviously, we can't depend on that, though. You know, I just love this as a parent. They're already thinking about their children's future. Yeah. I love it. So just follow the babysat. Get out of debt, get you three to six months set aside, and then start focus on your retirement. Then I start setting aside for college. Once you get out of that, I would definitely say if they're younger,

looking to an ESA or 529 plan. And then if they're already in school right now, check out my book, The Graduate Survival Guide, and her book. That's right. We co-wrote it. But then also grants to scholarships. Yes. The key thing is, do not take out loans.

Yes. Anthony. Rachel. So glad you came over. Seriously. So fun. So fun. Guys, make sure to check out everything that Anthony is doing on YouTube and Instagram.

And you have a really fun events with Meg Meeker called Smart Parents. What cities are you guys going to be in? We're going to be in Sacramento, California, and we're going to be in Minneapolis. So that's going to be fun in May. It's just going to be absolutely amazing. Tickets are moving right now. So it's going to be exciting. So fun.

Thanks, Anthony. Thank you, Rachel. I'm so glad you guys got to hear from Anthony. He is so passionate, and he's just so awesome. I love working with him. And if you're curious about the Smart Parent event, you can click the link in the show notes to get tickets to that. All right. Coming up next is an amazing family.

Justin and Jana just did an incredible. incredible job of getting out of debt. But more importantly, they brought their kids along and they communicated with their kids about money. And I know a lot of you guys probably grew up in a household where money wasn't talked about. And you're thinking, okay, so how do I start talking to my kids about it? And they're just a great living example who are doing it so well. And it was fun because the kids were actually on set with us. We've never had kids on the Rachel Cruz show. And so they were so sweet. I mean, it was so fun having that whole family there. So here's our conversation.

I always felt like I had to keep up with the Joneses. We felt trapped. He made a lot of money and we had nothing. The worst moment was when I had to call my husband at work. I had to tell him not to buy anything. We didn't have a dollar in the bank, a dollar on a credit card, nothing. I was upset with myself. Couldn't believe I had gotten this bad.

And she was there in wait, just ready with a plan. And we knew that, you know, this would affect the kids. And the kids were amazing about it. We brought them into the whole mix, told them what we were doing. One thing we always made sure was to have them take any credit card applications that we got in the mail and rip them up. I just wanted to instill in them that, you know, credit is not something that we do. We don't want them to do the same things we did. They're putting their own value on things, and it seems like their goals were our goals eventually.

Before everything, every purchase was with a whole bunch of baggage attached to it. That's the most freeing feeling ever. Well, thank you guys so much for being here. Thank you so much for having us. All the way from Phoenix, Arizona, a little bit of a trip. But you're here because you're celebrating something fun. We are. Absolutely.

What are you guys doing? Get our debt-free scream. Yep. We're celebrating our debt freedom. Amazing. So how much debt did you guys pay off? $303,000. $303,000.

Okay. And that includes the mortgage. Yes, it does. But still, you guys, you don't have a house payment. No. Like, you totally have no payments. Okay. So I'm dying to know what was life before this journey.

It was waiting for the paycheck to pay the bills, you know. Had to wait for it. I had to wait for it. You know, the second it came, I'd pay all the bills and that was that. So what was the breaking point that you were like, okay, we have to do something different. Like, something has to change. We didn't have a penny to our name on a credit card or in a bank. Yes.

Justin, did you know all of this? Yeah, I didn't know it was as bad as like. thought it was, but it was pretty, pretty bad. Yeah. Before our financial journey, I thought life was great because we just bought anything we wanted and put anything on the credit card. One thing led to another, you know, one bill led into another bill being late and more and more debt and it just snowballed in the wrong.

For the wrong. Very wrong. Noball. Yes. So you look up and you're like, okay, we have to change. So that shift of living where you can buy anything you want, I'm sure you kids, you guys, could get whatever you wanted for the most part. I'm sure you weren't overly.

I'm sure your parents said no to you a few times. But yeah, you kind of just lived as you all wanted as a family. And so making that shift was a big one, I'm sure. So I know for a lot of parents, when they're talking to their kids about this, when they're kind of starting that new journey, there's this balance of sharing but not scaring them, right? So do you feel like you found that good balance? Yes.

I think so. I mean, to be honest, the kids made it easy. I mean, we would tell them everything. We told them how much the mortgage was. We told them how much the electricity was. We told them everything. And then it's like, no, we don't have to worry. All the bills are paid.

We're always going to have food. That's not a problem. But we're doing all the extra to the debt so we can just be done and do whatever we want. Okay. I'm going to pause for just a second. So this family chose to share all the numbers, like out in the open. And I'll say there's not a wrong or right way to do this. Some families choose to do this.

And they're like, hey, we want our kids to know the value of a dollar and how much it takes, to pay the mortgage and the food and they see all the numbers. And then some parents are in the line of thinking of like, they don't really grasp exactly, you know, what hundreds or thousands of dollars are and we don't want them to know how much we make. We don't want them to see certain numbers. So again, there's not a right or wrong. I grew up in a household where we were never given numbers, specific amounts. I mean, maybe the grocery bill every now and then, but we like, we didn't know how much things like specifically cost or how much mom and dad made or any of that. And I think Winston and I, I think I'll probably choose to share maybe a little bit.

I think I kind of want them to know, like, yeah, do you see that $50 on the gas machine that we just filled up? Because I've been running you around all town. Yeah, like that's $50 that cost and gas. So I think there will be some elements I definitely will be intentional pointing out. But I really don't think I'm going to honestly share probably like what we make or that kind of thing. I'll probably keep that until they're like emotionally mature enough to handle certain

kind of information from us. We definitely explained all of that. Yeah. But yeah, they weren't deprived. Totally. Absolutely. That was very important to make them not feel deprived. Yes, absolutely.

One of the big things was we opened up a banking account for both of them. And they went to the bank and they opened it up. They talked to the teller. They handed over the money and they had complete control of it. And every month they get a bank statement in the mail and they open it up. They look at it. Yeah. And they know.

All right, I'm going to interrupt again. I can remember being 15 myself and walking into that bank and opening up my checking account and all the things. And that was such a huge memory for me. And I think when parents do this, I love that they did this with their kids, when you start to give your kids responsibility, you start to give them almost this weight of the adult world, they get a grasp onto what's going on. And when you can learn that at 12, 13, 14, 14, 15 years old, what a blessing versus

the first time you're having to deal with an issue. and going to a bank or calling a bank or whatever it is that you're like 22 out on your own. Like, I mean, learning this stuff early and the experience of actually going through the motions, I think is so awesome. So I love that they did that. So what other tactical things did you guys use with the kids to help teach them about their own money? I mean, you guys obviously opened up a bank account, which is awesome for them, and they're already being introduced to so much.

Is there anything else that you guys did that you feel like really worked? Well, we did get them, Financial Peace Jr. Oh, yeah. So they read all the books. You guys have your banks. The triangle banks. What's your most favorite thing you've ever paid for on your own? Probably my Nintendo Switch.

I actually raised up all that money. Oh, for the whole thing. How much was that? Probably like $300. How did you earn $300? Doing chores. Yes. Yeah.

So good. After you do your chores, do you guys like check them off? Yeah, we have chore sticks now. Okay, so what is that, Quentin? Tell me about that. Oh, it's like popsicle sticks and just had, The chores written on them, the smaller ones that if we do them, we get a single dollar, but the bigger ones, then we get $2. Dependent on the popsicle stick and the size.

Oh, y'all, that's so creative. That's so good. So good. Because life is crazy, right? Like, oh, yeah. I even remember growing up with, you know, and us doing it even as Ramses, I'm like, we'd forget weeks at a time. Sometimes, I mean, like, it's just, it's life is nuts. And so the consistency is good, but even a little bit goes such a long way.

But you guys are doing more than just a little. I mean, you are totally changing your family legacy. So what encouragement would you give a family who thinks, okay, we have, maybe they have $30,000, maybe it's not $300,000? And they're thinking, we have kids, like, we're doing life, we're busy. Like, I don't think it's possible for us to buckle down and do this. What would you say? It is.

You have to? You have to. There's just no way around it. I mean, do it for your kids. I mean, we love it even more when we can buy something, when we really, really want it. And we recognize whether we really, really want it. I mean, we have talks with them when we're at the store. You're like, well, do you really want that?

Like, what are you going to do with that? What do you need that for? Actually, a funny story. Emma had an Amazon gift card. She wanted to go on Amazon and see what she wanted. And I was like, do you really need anything? And she's like, well, not really. And I was like, isn't that nice?

Isn't that a nice place to be? You know? So it was awesome. See, what a good conversation. and leading into contentment and just learning like, yeah, you can be okay. You know, there's 39-year-olds who don't have with that. That's what I told her. Yes.

Yes. That's what I told her. Well, you guys are absolutely amazing, truly an inspiration to so many families. And you kids are awesome. Seriously, you guys are awesome. So great. So thank you all for coming on and share your story. Thank you.

I am always so grateful for families coming on and sharing their stories because it is such a personal thing in their life. And I know so many. you get so many great things out of it when you're seeing someone else who is walking this journey or has walked it and already out of debt. So I'm so glad that they came on. Well, thanks you guys for listening to this episode. This is such a huge part of my heart, getting this next generation on board. And as you parents are getting your money in control, your kids are watching you. And I always think back to my story whenever I see families that are doing this. I always put myself in that kid's position where I see that kid. And I'm like, man, I was.

that little kid, like that was me. But when my parents decide to change their life and to do things differently and look through scripture and use common sense and start applying those things to their lives, ultimately it trickled down to completely change my life and my siblings' life. And so you're doing an awesome job if you're on this journey and you're getting out of debt, you're saving up for your emergency fund, you're being intentional with your money, you're budgeting, you're doing all of these things. You truly are absolutely leaving a legacy. So I want to thank Anthony for coming on this episode. And again, thanks to Jana and Justin and their kids for coming on. Now, if you've not hit that subscribe button, make sure you do that on Apple Podcasts or wherever you

are listening to this podcast. And again, if the spirit leads and you want to leave a review, you are welcome to do that. And as always, you guys, remember to take control of your money and create a life you love.