Book Review: Smart Money Smart Kids
Raising the next generation to win with money
We are the most indebted generation. This book, Smart Money Smart Kids, is designed to free you from debt and teach you and your children the principles of being debt free and building wealth. If you follow the general principles in this book you will have peace of mind. Debt steals your peace of mind and enslaves you to the lender.
I like the way this book gives two perspectives. The first is from Dave Ramsay who explains how he taught his children money skills and the second is from his daughter, Rachel Cruze who explains what those lessons meant to her as a child and how her life was forever changed.
If you can set money management examples for your children, you can then teach your children how to manage their money. You will have given them the knowledge to be rich beyond their dreams. But to teach your children, you need to get your house in order first. I believe this book will give you the inspiration to do that.
Dave Ramsay is an American icon, who was sent bankrupt at the age of twenty-six when he was in real estate and the banks called in all his loans. At the time, he had a very young family. Dave and his wife vowed they would never borrow money again and they would instil in their children, money values. Many of their beliefs are based on a deep religious conviction.
For his children, the first lesson, which came at a very early, age was to develop a work ethic. You work and you get paid to work. Next they had system where each week, the children received their ‘Earned Money’ or “Commission” as it was called. The children had to decide how much of their money they would put into three envelopes:
If you need a kick-start to reduce your debts or how you teach your children to grow up not thinking everything is bought with a credit card, please watch this 4-minute inspirational video. Research has shown that adults are failing with money because of the money habits they learnt as children. Dave says that Personal Finance is 80% behaviour and 20% head knowledge.
Reading this book, will give you some fantastic ways to not only change the way you manage your money but give your children the money skills they need. As the title says:
Smart Money Smart Kids
Dave and his daughter have a system called “ The Five Foundations”, which I believe is an excellent system to start your new money management skills program. These are the five foundations:
- Save a $500 Emergency Fund
- Get out of debt
- Pay cash for your car
- Pay cash for college
- Build wealth and give
One of Dave Ramsay’s famous saying is:
If you fail to plan, you plan to fail
While this book is American, where some of their tax and credit score rules are different to that in Australia, there is a wealth of information for people who want to manage their money better. The book title is “Smart Money Smart Kids”, but I would also say:
Smart Money Smart Adults
Like America, financial literacy in Australia is in crisis. It’s time for each adult to take responsibility for their money management and to pass on those skills to their children.
Money Smart Tips in 3-Minutes a Day, is a program, I developed for both you and your children to learn the basic principles of money management. This program is free to anyone who wants to accept the challenges that people like Dave and his daughter, Rachel put to their readers.
Disclaimer: Financial Mappers does not have an Australian Financial Services License, does not offer financial planning advice and does not recommend financial products.