The Rachel Cruze Show - What Everybody Gets Wrong About Generational Wealth

Starting point is 00:00:01 Well, hey, you guys. So today I'm going to talk about breaking the cycle. And when we talk about breaking the cycle, again, that can be for a lot of different things. But when you talk about your money habits, we say, hey, break the cycle of your bad money habits so you can put good money habits in place that's going to help propel you forward to be financially successful, which means that's going to cause your family and your family tree to change because you have broke the cycle of just maybe living paycheck to paycheck or always using. credit cards are always using debt to say, okay, I'm going to do something that is good for myself financially. And because of that, then your kids, your family are going to be the beneficiaries

Starting point is 00:00:45 of that. And so, you know, when I talk about this stuff, you may be thinking, oh, my gosh, well, you're Dave's daughter, like, you know, how much do you know about all of this? Because he's the one that really, you know, did it all. Right. I hear that kind of stuff all the time, which is true. So we're going to talk about that today. And I want you to stay tuned to later because I'm going to share my top three ways to reverse the toxic money cycle and really change your family tree. So like I said earlier, the disclaimer is, listen, I am fully aware that Dave Ramsey is my dad, okay? I am not shocked. I understand. And I know deep in my heart the advantages that come with that. Like, I know I was with parents growing up that even though they filed bankruptcy the year

Starting point is 00:01:24 I was born, they chose a different way of living with money. And because of that, the knowledge and what was shown to me, the example they proved out, was one of really good money habits. And that's a gift as a kid to get that and to literally live in a world where you're like, oh, I never have to use debt because I'm never will go to in that because I'm going to choose not to and like have that hard line drawn when you're like 10 years old. Like that's a powerful thing. And then also financially, yes, mom and dad have done very well. And so they've been able to do things like pay for our college and all of that, which again puts me at a different starting point than some other people. So I fully acknowledge that. But when we talk about this idea of changing your family tree,

Starting point is 00:02:04 it is a huge benefit. And some people, I think, do cringe of like, oh my gosh, I just don't want to give my kids everything and, you know, entitlement and all of that, which can be there for sure. And you want to do this in a really healthy way. But the beautiful part of you doing the hard work today is that you do allow your kids to still have dignity for sure and what they do in their own money habits as they become adults, but maybe they get to start a little further down the road, which which is a gift, and that's part of the idea of changing your family tree. So if you're like me, and maybe you're fortunate that the groundwork was laid for you by the people in your life, I don't think that's anything to be ashamed of. And it's really simply a gift that, you know,

Starting point is 00:02:43 can be turned around and be paid forward because instead of just feeling like, okay, the second generation, which would be me, right, Dave and Sharon, me, and my siblings, instead of us just wasting our money and like doing whatever we want and being trust fund babies, maybe we can actually use the money that we earn to continue to invest for our kids. And then our kids will do the same for their kids and you keep changing that family tree, which is a really beautiful thing. So when it comes to breaking the cycle of debt and bad money habits and really changing your family tree, the first thing I want you to remember is that it's okay to want better for your kids. And this can look a lot of different

Starting point is 00:03:16 ways. For some people, they didn't learn, you know, financial habits until later on in life. So if you have older kids and you're just now discovering the baby, these steps, you're starting to change your family tree, then offer your kids some really good financial principles and talk to them about where you are. Because again, deciding, you know, what you're going to show and tell your kids is up to you. But if you're doing this and you have teenagers in the house or college students or even adult kids, bring them into the conversation and just like, wow, we are starting to look at money differently. And it's really encouraging. When you hear your parents changing and knowing that they're learning and they're growing, it's a really beautiful thing.

Starting point is 00:03:54 you are doing that, bring your kids into it. Now, also, understanding that, yeah, everyone grows up with a different level of knowledge when it comes to money. So maybe your parents talked about money all the time. Maybe they didn't. Maybe there was high emotion around money. Maybe there wasn't. But regardless of where you came from, being able to say, hey, the landscape in front of me, I get to change. Now, one easy way to get some of this knowledge and to start looking at, hey, what can I do differently, is with FPU. Financial Peace University. It is one of the best and practical things that you can do when it comes to personal finance because you're able to get the basics. And again, this could even be a gift. Like if you know someone getting married or maybe your

Starting point is 00:04:33 kids going off to college, you know, things like that. Getting this knowledge as early as possible is huge. So I will leave a link for you down below. All right, the second thing I want you to remember is if you're someone who has either given or benefited from financial generosity, own that and continue to do that work with dignity. Luke 12 at 48, says, to whom much is given, much is required. So if you are someone, maybe like me, and maybe your parents helped you pay for college or helped you start invest early, or maybe, again, you're just, you started financially with a firm foundation, which is such a gift. You don't have to be ashamed of that, but continue to propel that forward, okay? Be someone that continues the change, be someone

Starting point is 00:05:17 that lives out these principles and someone that, again, if you have your own family, nuclear or family and your own kids, it's going to help them. And that's going to give them dignity. Again, it's that balance of, hey, I'm going to search you off on the right foot, clear the pathway so you can, you know, as they would say, they walk so I could run. That whole mentality is so beautiful. And then, of course, balance with they still need to earn a paycheck and go to work, because that's good for them as human beings. But being able to start a few steps ahead, it is a gift. It is a gift. Okay, so now that we've clarified some of that, here are three practical tips to break the toxic money cycle that you may be in yourself for you and future generations.

Starting point is 00:05:56 Number one is just to get out of debt for good. Like this could be a black and white issue for you. And again, we can be very legalistic. Here at Ramsey when it comes to debt because we're basically like, nope, never, ever, ever, except for a mortgage. But other than that, just say no. But what that does is that avoids so much pain and so much of going backwards financially. When you have autonomy over your life and your money, it's a beautiful thing. When your kids are able to start off with that, mindset it's amazing number two is to invest consistently so once you are out of debt and you get a fully funded emergency fund of three to six months of expenses then I want you to start investing in building wealth so 15% of your income can go into retirement and you're going to start

Starting point is 00:06:35 letting your money work for you so part of building wealth is looking and planning ahead which is really key which leads me to number three plan for the future so this is everything from having an emergency fund having sinking funds and thinking through hey we're going to replace a car. So that's going to cost us, you know, $10,000. So we got to save $1,000 for 10 months or whatever it is. So break it up and be able to have cash when it comes to these big purchases. Be thinking about your kids' college. You know, college is not an entitlement. It is a gift. It is a blessing. So if you are in a position that you're able to start saving for your kids college, that's wonderful. That's part of our baby steps plan. If you're not, you're not a bad parent.

Starting point is 00:07:13 They're okay. We have plenty of resources to show them how they can go to school debt-free. but there is something to be said of, man, you're able to, again, plan for the future as much as you can for the next generation. All right, before we close, I want you to remember one final thing. Listen, millions of people have broken the cycle and changed their family tree. And Dave isn't their dad. So like I say, I'm fully aware he is my dad. There's gifts that come with that. I'm so thankful for sure.

Starting point is 00:07:40 But people are doing this today, y'all. They are calling into the Ramsey Show. They are getting themselves out of debt. They are investing. They are building wealth. They are doing all of this, and they're not Dave Ramsey. And that's the powerful thing is it comes down to your decisions, your habits, and what you want to do.

Starting point is 00:07:56 But you can change the game for yourself and your family. So it's a beautiful thing. It's very empowering because, again, there is something about this tactical side of money that you can actually start to see change and see the effect of that change really quickly. Now, if you haven't already, be sure to check out my episode on easy ways to build generational wealth, which is next. Okay, you guys, remember to take control of your money and create a life you love.

The Rachel Cruze Show - What Everybody Gets Wrong About Generational Wealth

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