Smart Money Smart Kids Book Summary - Smart Money Smart Kids Book explained in key points
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Smart Money Smart Kids summary

Dave Ramsey & Rachel Cruze

Raising the Next Generation to Win with Money

4.2 (214 ratings)
15 mins

Brief summary

'Smart Money Smart Kids' by Dave Ramsey & Rachel Cruze is a practical guide to teach parents how to raise money-smart kids. It emphasizes on teaching children from an early age about saving, spending and giving.

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    Smart Money Smart Kids
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    The basics – work, spending, and saving

    Did anyone ever teach you that working leads to earning money? Many of us just sort of picked up that knowledge along the way.

    But this is one of the most basic concepts you need to teach your kids – the connection between work and making money. This is something you can start young, but you’ll need to adjust the lessons as your child grows up. Instead of giving them an allowance, Ramsey and Cruze suggest a commission format for this lesson. An allowance doesn’t directly teach the connection between hard work and earning money like the idea of a commission does. Ramsey used this very idea with his own kids, including Cruze.

    When your kid is about three, you can start making the connection by giving them options to earn a few dollars for some key chores. From about age three to five, your kid will need some simple chores, things like putting toys away in their baskets, making their bed, or carrying in lighter items from grocery trips.

    Pay them immediately upon completion of the chore to really build the connection between work and earning. Use a big, clear jar to store their money, and pay them in single dollar bills. This introduces a fun element for young learners. Plus, using single bills helps fill the jar quickly, making it look impressive. This helps get kids excited about the concept of work and earning! 

    As your child grows older, you can increase the difficulty of the chores and introduce the envelope system. Use one envelope for saving, one for spending, and one for giving or charity.

    It’s important to teach your kids wise spending and saving habits both. For younger children, start with spending habits. This is the most fun for younger kids, and we don’t want to bore or overwhelm them right at the start of their smart money journey!

    Smart spending habits include things like looking for deals or bargains, waiting at least overnight before deciding whether to purchase something, and the opportunity cost of spending.

    Need a refresher on that last one? No worries! It’s the idea that when you spend money on a toy this week, you won’t have that money to spend on the new game you want that comes out next week. Obviously, this lesson is easier for slightly older kids as opposed to your three-year-old!

    As your child grows older, start introducing wise saving habits as well. Explain things like saving for bigger purchases. If a younger child spends money on candy every week, they won’t be able to save up for buying something bigger, like a new doll. You know your child best, so use examples that apply to them! These early lessons will then apply as they get older and start saving for bigger purchases like a car or college or a house. Be sure to revisit every lesson as they get older, because these concepts need repetition and applicable examples to really stick.

    As you teach your child saving and spending habits, keep in mind that most people are either natural savers or spenders. Neither is better than the other, but it’s smart to be aware of our own personal inclinations and to adhere to wise habits either way. Cruze admits she’s more of a natural spender, but that by being smart about her spending habits and implementing other smart money habits like budgeting – we’ll get to that later! – she’s been able to live debt-free and thrive anyway. Your child’s spender or saver inclination might be different from yours, and that’s okay!

    A CNN report about college students at University of Illinois at Urbana Champaign showed that nearly all those who demonstrated good financial skills reported that they’d picked up the habits based on their parents’ guidance when they were younger. So get your kids in the habit of saving and spending wisely now. They’ll take these skills with them throughout life.

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    What is Smart Money Smart Kids about?

    Smart Money Smart Kids (2014) guides parents – or anyone helping raise children – in teaching those kids to become financially smart. Review basics like the relationship between work and money and find actionable advice for instructing toddlers through teens to gain confidence with money.

    Smart Money Smart Kids Review

    Smart Money Smart Kids (2014) by Dave Ramsey & Rachel Cruze is a practical guide to raising financially responsible children. Here's why this book is worth reading:

    • It offers clear, actionable strategies to teach kids about money, helping them develop healthy financial habits from an early age.
    • The authors combine personal anecdotes and practical examples to make the book relatable and engaging, making it easy for parents to implement the advice.
    • With its emphasis on long-term financial success and practical tips on budgeting, saving, and giving, the book guarantees that raising money-smart kids can be enjoyable and rewarding.

    Who should read Smart Money Smart Kids?

    • Parents or guardians who want to raise money smart kids
    • Anyone teaching young people how to be financially fit
    • Financially wealthy individuals wondering how to build generational success

    About the Author

    Dave Ramsey and his daughter Rachel Cruze are experts in the field of building and maintaining personal financial success. Ramsey helps people get out of debt while Cruze helps people stay out of debt in the first place. Ramsey’s other books include Financial Peace and The Total Money Makeover. Cruze’s other books include Love Your Life Not Theirs and Know Yourself Know Your Money.

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    Smart Money Smart Kids FAQs 

    What is the main message of Smart Money Smart Kids?

    The main message of Smart Money Smart Kids is to teach children about handling money wisely.

    How long does it take to read Smart Money Smart Kids?

    The reading time for Smart Money Smart Kids varies depending on the reader's speed. However, the Blinkist summary can be read in just 15 minutes.

    Is Smart Money Smart Kids a good book? Is it worth reading?

    Smart Money Smart Kids is worth reading because it provides practical advice on raising financially responsible children.

    Who is the author of Smart Money Smart Kids?

    The authors of Smart Money Smart Kids are Dave Ramsey and Rachel Cruze.

    What to read after Smart Money Smart Kids?

    If you're wondering what to read next after Smart Money Smart Kids, here are some recommendations we suggest:
    • Baby Steps Millionaires by Dave Ramsey
    • Dave Ramsey's Complete Guide To Money by Dave Ramsey
    • Know Yourself, Know Your Money by Rachel Cruze
    • The Total Money Makeover by Dave Ramsey
    • The Opposite of Spoiled by Ron Lieber
    • The Index Card by Helaine Olen and Harold Pollack
    • Million Dollar Weekend by Noah Kagan
    • The Subtle Art of Not Giving a F*ck by Mark Manson
    • Raising Critical Thinkers by Julie Bogart
    • Elon Musk by Walter Isaacson