Recently, Lacey Langford and I were able to interview Rachel Cruze live from
#fincon18 in Orlando, Florida. We talked about family money lessons every parent should know and what it was like growing up as Dave Ramsey’s daughter.
Below are just a few highlights from our interview. Our questions are in Dark Bold, and Rachel’s responses are immediately below them. For more about Rachel and the complete interview, be sure to check out the MilMoney Movement Podcast on Apple Podcast, Google Play, and everywhere else under the sun you can listen to podcasts.
Rachel Cruze on Growing Up as Dave Ramsey’s Daughter
You were raised in a very responsible money management family. What is the favorite money lesson that you learned?
It’s so funny. I feel like a misconception people have is they were like, oh, you grew up is Dave Ramsey’s kid. You must have had mutual fund birthday parties and like budget camps in the summer.
But, mom and dad, they really did such a good job of not getting too in the weeds with us with money. Dad taught us some things and we’d ask questions and have conversation, but it was not this money obsessed household by any means.
So, really the lessons they taught us, the big ones that stand out, are kind of these overarching themes they don’t blow your mind. It’s kind of common sense. So, one of those I always think about is that we were never given an allowance as kids. We were always on commission.
You work, you get paid. You don’t work, you don’t get paid. And, that whole concept of learning from a young age that money comes from work. Money doesn’t just come from my parents back pocket or my mom’s purse. This is what it equates to.
And, I think looking back, that was probably one of the best gifts I think that they gave us. It’s just that foundational principle.
Because, when I went to college, graduated college, and entered the workforce, work was just not a surprise to me. And, I’m so thankful for that because there’s a lot of people and especially millennials that just weren’t taught that always. And, so you meet 35 year olds who don’t understand that money comes from work, marriage, etc.
Did your parents let you fail money wise at all?
They did, and I looked back at that and am so thankful for that because what they did is they let us handle her own money. So, we’d make money from that commission, and we’d give it, save it, spend it. Those were like the three things we do.
And, I would spend money on silly putty at Target. And, mom’s like, “it’s going to dry up in a day, like you’re going to waste your money”.
But, I still did it. So, it was very small, inexpensive mistakes under their roof versus going out on my own and handling money for the first time and I make a $40,000 mistake on a car lot. So, that was one thing they did. They totally let us fail and I’m so thankful for that because again, the lessons that you learned from that was incredible.
They let us learn money lessons when it was present. Not that it had to be the sit-down and have a big family meeting about it. It was at this moment. This is the lesson to take from them.
I always encourage parents to not have a money summit in your household. Let it be a part of life because it is like the ebb and flow of life. When you’re at the grocery store and you’re looking at two boxes of cereal, just talk to your children. Just have these conversations in everyday life, and that’s where your kids pick up things.
For parents that weren’t raised in an environment with healthy money habits or that they don’t have the confidence to manage money and now they have children, how should they go about teaching their children about money?
I think, for any parents, you have to understand that more is caught than taught. Your kids are watching you. So, if you’re preaching one thing and doing another, they’re getting conflicting messages. They’re smart and they pick up on it.
And, so I would say as a parent, no matter who you are, you have to remember that. So, the example you want to set for your kids, how you want your kids to handle money and their future, it needs to be how you’re handling money.
But, that’s really hard because money is a very shameful topic. People have made mistakes. I’ve talked to so many parents and they’re like, “We live paycheck to paycheck. We have two car loans and credit card debt. Who are we to teach our kids about money?”
But, I always press in. I’m like, you’re their parents. It’s your job. It’s your responsibility.
You’re not going to be perfect. I’m not perfect with money. But, as you start to clean up your own mess, your kids see that. They see the sacrifice that it takes. They understand what’s happening as you talk with them, and they see it through example.
But, also it does not have to be this complicated thing. These principles are learned. Teach them how to work, give, save, and spend. And, you got a lot of bases covered.
They don’t have to know what a mutual fund is at six years old. Getting those foundational principles is really what money is all about.
It is 80% behavior. It’s only 20% head knowledge. You don’t need to know a ton of stuff.
They just need to know how to do it. And, when you put it in practice and it becomes a habit in their life, you’ve changed the game for your kids.When teaching your kids about money, more is taught than caught. - @RachelCruzeClick To Tweet
Do you find some people waiting to have kids because they think they can’t afford it?
Yes, I do tell those if you’re waiting until you can afford it, you’ll never have kids. The finish line always keeps moving.
People say, “We’ll wait till we’re out of debt to have a baby.” I’m like, no, you just stop doing the debt snowball. It’s what we teach. Stopped doing that. Save up some cash.
I would say those big life choices. Waiting to get married, buying a home, then maybe you wait a few years, and you rent because you want to save up for a large down payment.
There are financial decisions that are wise to pause on. But, big events like getting married or having a baby…no, do it. Make those decisions.
But, obviously, if you’re living paycheck to paycheck and you have a baby, you’re not going to go get like the most expensive roller, right? You’re probably on craigslist. So, you know where you’re at financially. But yeah, I keep going with those life decisions for sure. Make those choices.
For teenagers. They are growing up. They’re getting ready to leave the nest. Potentially high school going to college, what are maybe one or two top lessons for teenagers to learn because they are ready to go out on their own?
I would say staying away from debt, number one. It really infuriates me. I look in the eyes of 20 something year olds who said no one told me. I have $100,000 in student loan debt with an undergraduate degree in English, and I don’t know what to do.
No one told me. No one stepped in. We don’t have a student loan crisis. We have a parenting crisis.We don't have a student loan crisis. We have a parenting crisis. - @Rachel CruzeClick To Tweet
So parents, like even if you can’t pay for your kids’ college education, that’s okay. You’re not a bad parent. But, guide them through this.
Don’t let them start off with them signing their name away for $60,000 in debt for a degree they may not even use. Walk with your kids.
It’s okay go to community college, go in-state, take in-state tuition scholarships or grants, or work. There are still ways in 2018 to go to school debt free.
And, so as a parent if you have a teenager in the house and even if you have no money in an ESA or 529 college savings plan, you can still help them make wise decisions. No debt, no student loan, no credit card, stay away.
I’m really worried. I have a teenager just entering high school. I’m really worried that he’s not going to listen to me, and he’s going to be an art appreciation major despite me. How do I try and guide him when he doesn’t listen to me?
You could go a super hard just not pay, and probably not good for your wellbeing.
I had a friend, and she wanted to major in art. And, her dad told her that she had to major in business and minor in art.
And, now at 32 years old, she’s like, “I look back, and I’m so thankful. What was I going to do with an art degree?”
But, when you’re 18 and you think you have the world by the finger but to take an art deco degree, realistically the marketplace value of a certain degree isn’t commiserate.
I talked to students, and they have a left-handed degree in puppetry from a liberal arts college. I’m like, “What are you going to do with that?”
So, you have to think and look at the numbers for sure. But, I think as a parent, you can start those conversations early. He’s not like applying for school right now. But, those years to build up.
But, then there is a sense that if you’re choosing to be an adult and make these decisions, there is going to be more of a fly and be free. And, you won’t pay for it. But, you have to start having those conversations early.
To find out more information about Rachel Cruze, check out RachelCruze.com and also on her new YouTube channel, The Rachel Cruze Show. And, you can also find Rachel on Instagram, Twitter, and Facebook.