Patrick and I have always been careful with our finances. Making smart money decisions has not always been easy, however. I had a significant amount of credit card debt in college. When we married, we vowed not to let debt break us. In fact, we even lived with Patrick’s parents for three years as we paid off our college loans!
About a year ago, we started listening to Dave Ramsey’s podcasts. Hearing couples and families all over the country scream, “I’m debt free!” has been really inspiring. I love his Seven Baby Steps. We’ve been working on steps 4 (savings for retirement) and 5 (college funding) simultaneously for years – even before we knew of Dave Ramsey.
While we were living in Redding, we were renting so step 6 (paying off house) didn’t really apply to us. Now that we’ve moved back to Oregon and are in the process of buying a home once more, we have made owning our home outright a family priority. Our goal is to pay off our home before the kids begin college full-time. That gives us just 5 years!
Over the next couple of weeks, I will be describing how we have applied Dave Ramsey strategies to our life. I begin today with the resources we’ve used getting started.
Money Smart Kids
Dave Ramsey has written many books on personal finance and budgeting. Smart Money Smart Kids: Raising the Next Generation to Win with Money is the first book written with his daughter, Rachel. In his usual writing style, Dave presents a no nonsense, tell-it-like-it-is guide to raising money-smart kids. His daughter offers story after story of what life was like growing up as Dave Ramsey’s daughter. I just loved her! Her stories give the book humor and soften Dave’s usual dry approach.
We listened to the audio version while traveling to Portland with the kiddos several weeks ago. We have been using many of the strategies he describes such as:
- Not giving the kids an allowance but expecting them to earn their own money by doing work (Dave calls this “earning a commission”)
- Expecting them to save and pay for things they want
We’d stop the audio periodically on our trip and talk over the points presented. My son’s ears perked up when he heard of Dave’s 401 plan. When your teenager starts driving and wants his own car, the money the child has saved for this purchase is matched dollar for dollar. In other words, if your teen saves $5,000, then you match them with $5,000, and they can buy a $10,000 car.
My son quickly asked, “Instead of buying a car, would you match the money I save to buy a grand piano?” Absolutely little man. Absolutely.
Our conversations quickly evolved into brainstorming entrepreneurial ideas. “I’m only 10 years old! How can I make money?” Next week, I will share some of the creative ideas we came up with – ways kids can earn money of their own.
Personal Finance Course
Throughout his books and podcasts, Dave recommends his other publications and materials. I was certainly intrigued when I learned of his Foundations in Personal Finance, a high school personal finance course designed specifically for homeschoolers.
Much to my delight, this product was recently available for a significant discount through the Homeschool Buyers Co-op. While the offer has now expired, they have invited him to return. You can request a reminder from the co-op when they offer is available again.
Please note, as my kids are only 8th and 6th grades, we aren’t using this material presently. However, we look forward to implementing this curriculum in a few years.