How to Raise Kids Who Are Smart About Money | 5 Minute Video
Parents are responsible for teaching kids how to manage money. But too few do. Personal finance expert and bestselling author Rachel Cruze reveals the three things every child (and adult) needs to know about money.
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Script:
Everyone knows the earlier you learn a language, the easier it is to master. Learning a foreign language at four takes a lot less effort than learning one at forty. The same holds true with managing your money. I can tell you this from personal experience.
I grew up in a home where the value of money was a frequent topic of conversation. Today, I teach people how to get out of debt and build wealth with my dad, Dave Ramsey. Growing up in my parents’ home, I learned a few things about kids and money.
Here are three:
One: Put your kids to work.
It’s very important that your kids understand that money comes from work – not from mom and dad’s wallet. As soon as your children can grasp the concept of cause and effect — and that happens at a very young age — you can start teaching them about the work/money connection.
Have them clean the playroom, take out the trash, put away their laundry – there are a million things they can do. Just make sure it’s age appropriate. Don’t have your five year-old mow the lawn. And pay them for some of the work they do.
Let your kids know that in the real world you get paid only when you work. And it’s with the money made from work that you can buy the things you want.
When children work for things they want to buy, the purchase feels like an accomplishment, not an entitlement. You’re sending the opposite message when you just hand your kids a $20 bill when they ask for it, or give them an allowance for essentially breathing.
Of course, not everything your child decides to buy will be a smart purchase. And that brings us to…
Lesson Number Two:
Let your kids make mistakes with their money.
Many adults make expensive mistakes because, as kids, they were never allowed to make small, inexpensive ones. Tears now will save a lot of tears later.
When I was young, my parents took our family to Opryland Theme Park in Nashville. Dad and Mom had one simple rule: If you want to play the carnival games, you have to spend your own money.
Of course, I ran to the first game near the entrance, slapped some cash on the table, and took my turn. I lost. So I put down more money. And I lost again — and again. And then came the terrible moment when I reached into my pocket and found nothing but lint.
We had a whole day at Opryland ahead of us and I had blown through my cash! I ran back to Mom and Dad and begged them for more money and promised I’d pay them back. What Dad said has stuck with me ever since: “Rachel, when the money’s gone, it’s gone.”
Your children are going to make some dumb choices. They’ll waste money on stuff that a week later they wish they had never bought. And as their parent, there are times you need to let them make that mistake and suffer the consequences. That’s how they learn.
For the complete script, visit https://www.prageru.com/videos/how-raise-kids-who-are-smart-about-money
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"Call I can say is get the basement ready."
Have you seen these housing prices? Also, I try to save money instead of spending it all in one shot.
It's been a couple of years since I myself reached these conclusions. It sounded as if she was reading my mind!
😂😂😂😂
If your parents are cool with it get the best job you can and live with them. Then save 90% after taxes. After ten years you can be a millionaire.
Nothing about this video mention required spending. It only talks about "wants" when talking about needs doesn't suit the argument.
"Money comes from work" politicians make money by stalling vital legislation, which is the opposite of doing their job. They are paid by hundreds of thousands in wages, tens of millions in corporate campaign donations, and hundreds of millions through lobbyists and lobbying.
How do you teach your kids to be smart about money??
Simple.Don't let them watch Prager U 4 Kids.
There are so many good things they could be wasting their money on!!
my parent's philosophy was "if you want food, then buy it yourself."
Don't save. Invest
Letting your children make bad financial decisions is stupid.
If only this lesson could be taught to the US government…
Right on I am for that 100% you've got to earn the money that is why I'm on a 100% tax on inheritances. Think of how much better off we would be today if Donald Trump didn't get all that money from Daddy.
My husband and I watched Dave Ramsey in our 40. We didn't put it into practice till early 50. We finally figured it out. My daughter is in her early 30s. She watched Dave about 5 yrs ago. She is great with her money and teaching our grandkids. Thank you Mr. Ramsey and family.
I don't agree with saving money. That has little or no return. Learn to use debt to generate income and cash flow instead because they print money every day and saving it will not get you wealth nearly at the rate of investing in commodities like physical oil wells or mines and real estate. Real estate is a great way to generate income with debt and has great tax benefits
Pay kids to do chores. What could possibly go wrong?
Hint: kid wouldn't help you anymore for free
Well done, Ms. Cruze. That was very good video. This material should be known to children and adults alike.
As a kid whenever i wanted a 40 dollar lego set i would save up 80 40 dollars for the lego set and 40 dollars to go in the bank i have saved up so much that i can pay for my programming bootcamp money
I think this is like a vaccine from your kids to become a socialist, they just want free stuff and equal outcome
Saving is no better than shoving your money under your mattress. 6 percent inflation will eat away at your savings and render it worthless. Guaranteed
I was given a $20 bill even when I didn't ask for it. "Do you want money?" I was asked at age 23 and living at home. And no guidance about work growing up. And told I had it easy. No wonder I was messed up for so long.
Wierdos.
Why do you save money when the government prints it? As Robert Kiyosaki said, Savers are losers. The value of the money goes down overtime due to inflation, it is not obvious to save it, rather than invest it to grow, and not all debts are bad. Some use the debt to get richer, this is called leverage. The difference lies in the use of the debt.
I love this video… but I don’t like the idea of paying my child for doing things that he has to do as being part of the family, if that makes sense.
I also wanna teach the idea that’s it’s expected of him to do whatever it takes for the family without expecting anything in return.
After the world has been shut down for over a year, I have nothing left. I used to make eight thousand dollars a month, now I make zero dollars. Maybe this wasn't the best time to bring out a video about saving money. I lost about eight percent of the respect I held for Prayer U. I will never watch another video or podcast from Prager U. again.
awesome
My parents got the save money part but they never let me save up for stuff i actualy wanted so i just blew it all on stupid stuff.
As a child, whenever I want thing my grandmother tell as long as I have my own money, I could get whatever I want and that is so true
Yeah growing up my parents couldn't afford to give me and my siblings an allowance
What a great PSA. Thank you Prager and Rachel Ramsey
wow where was this 18 years ago when our daughter was born? Thanks Rachel – Your dad is clearly a very wise man
My mom as to force me to let her buy me something and my dad has to force me to take money from him
3:05-Bitch,i was born with this habit!!
I wanted to start saving money before i even started school!
Parent: I'll pay you $20 to mow the lawn for a month.
Kid: Hey Jimmy, I'll pay you $10 to mow the lawn for a month.
Jimmy: Ok.
Kid: INFINITE MONEY HACK.
https://youtu.be/l2g0jEdu8qk
Great advice!!! If only my wife would listen!!!!
"U work if u want to keep living under this roof" – my dad
I'm in my mid 40's. And when I look back at all the people I knew in the past, that led high-consumption lifestyles…None of them live that same standard anymore. A lot of them went backwards, financially speaking. Go ahead and buy your latest & greatest iFad, Tesla, smart this, smart that, eat out often, finance a home that you really can't afford…..Go ahead and drive yourself into bankruptcy. Learn the hard way. Good times don't last forever. They're ephemeral and you should treat it as such.
Kids never learn about this early enough. If only my parents had done this I would be further along in life. Better late than never.
The biggest mistake in this video that this leads to kids who only work if they are getting paid with something. I mean when I was I had to do the house work with my sisters and my brother all day and we never get paid for it and we know that we shouldn't because a kid who only do his/her parents say only when she gets paid is nothing more than a spoiled lazy brat. Also why should my own parents pay me ANY money if they are already taking care of in your whole young age. They are granting you a warm bed to sleep and rest, food basically everytime you just hungry, a place where are people those who will be always with you physically and mentally. In fact I never had any money still I started a student job (sorry I don't know the word for this but hope you understand it) before even when I looked at smallest amounts of money as it was like millions for me. After all I became some that still knows how much value has even least amount of money and I actually able to say I not a poor person. (Sorry for the poor English vocab. as you might already know the English is not my mother language, not even the first I started learning at young age.)
This is why over 80% of millionaires are conservatives
Millennials ahem ahem ahem…
money comes from work… sometimes. Sometimes it comes from management, or investment. Labour, management, or investment is there anything I"m missing?
Nowadays, money is one of the crucial things in the life of a human being. Just like health, if someone doesn’t take care of his health then don’t expect to live longer or with no diseases.
It is your choice!
Wait, this is the free robux link
“For the love of money is a root of all kinds of evil…” 1 Timothy 6:10. I wholeheartedly agree with this video about saving and being risk-averse. I was given an allowance for doing chores growing up and now I own my own house, nice things, and a job where I manage people’s money for a living. PragerU has always been hit-and-miss for me, but this video hits the nail on the head as far as money goes.
My coach taught me about entrepreneurship. I'm so thankful for that man.
I came to get some good reminders. But was surprised to find the opposite! These are exactly the things we SHOULDN'T teach our kids about money!:
1. Work for money
2. Save money to buy thrash
So what will they become when the grow up? Corporate slaves who saves money to buy toys?
What we should teach them:
1. Never work for money. Make your money work for you.
Right now I'm letting my 9 years old kid build a small business that sell kid's craft at school. Sure it's petty money to us but it's the lesson/habits that count.
2. Pay yourself first.
That doesn't mean go out and buy the latest Nike's shoes. It means use it to invest for your future.
I made my kids create five piggy banks to divide the sale revenues. One of them is for their future bigger business ventures.
We shouldn't save for the sake of saving. We should save for future investments and emergencies.
3. Be opportunity seeker and creative problem solver.
Creativity is a weapon. Teaching your kids how to sharpen it might be the single best skill you can teach them.
The video maker should have read more about money with books like The Richest Man in Babylon, Rich Dad etc before giving dangerous advices.
I had no allowance when I was a child. If I wanted money, I had to work for it. We had a paper route that took a lot of work. Each weekend, the papers had to be sorted and bagged and then delivered. As a kid, it meant weekends sucked up in work. As a teen, it meant I was the only one with money…. and as an adult? I'm still the only one with money!
But as an adult, it also gave me the greatest reward: I could take a job for less pay that allows me time to pursue other interests.
One day my daughter wanted to buy a item, I thought it was a bad idea because it’s one of those items that you enjoy at the time but get bored of it after some time but I let her learn from her own mistakes, well she bought said item and what you know she told me sometime later she’s going to make better choices next time and she didn’t like it after awhile because there’s not much she can do with it and we talked about it, now she knows and understands. Good message.
430 socialists don't like the concept of earning your money.
When I was younger and the time I still lived with my parents, I'm grateful that they taught me some lessons about money even though we're not rich, just a normal middle-class family. Growing up and live far away, I realize the importance of finance and how to spend money wisely. Schools should teach students more about money! That's a needed skill everywhere.