Dave Ramsey explains how bankruptcy changed his life

Financial expert and friend of the program Dave Ramsey joined Glenn on radio this morning to discuss his new book Smart Money Smart Kids: Raising the Next Generation to Win with Money. In the book, Dave and his daughter Rachel offer tips to parents on how to raise money-smart kids in a debt-filled world. Dave talked to Glenn about how his own bankruptcy changed his life and why the principles of hard work and commitment should resonate with every American regardless of age.

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To begin, Glenn asked Dave to talk a little bit about his experience filing for bankruptcy 26 years ago. One of Dave’s daughters was born in April, and he filed for bankruptcy in September – an experience that completely changed his life.

“It was that reset button. We hit the wall… It was bad,” Dave said. “So we had to start completely over – how we looked at money and how we viewed money. This whole ‘Dave Ramsey’ thing started then, but all we were trying to do was pay the light bill.”

Dave’s latest book, which he wrote with his daughter, seeks to help parents teach their children how to make smart financial decisions from an early age.

“We all look at our kids… and… we think that’s our do-over. That’s our clean slate, our flash start. It could be that way with money as well. You really can leave a legacy,” Dave explained. “But you have to teach them the life skill of money – not only for the sake of your legacy and your future, but it’s how they get to be good citizens, how they get to be real adults.”

So where do you start?

Dave suggested approaching conversations about money the same way you approach any other teachable moment – when the opportunity arises.

“I think the same way we teach them everything else… You catch teachable moments. You don’t have to have a generosity seminar Saturday morning. You just talk about generosity… If they don’t naturally give, you eventually lean into it a little and make them give,” he said. “They have to build the giving muscle. Same with the saving muscle. Make them save and make them make wise decisions when spending.”

Any parent can think back to a time in which they coached their child to consider whether or not making a purchase was really the best decision. Dave recommends being very intentional in calling attention to those types of choices and decisions.

“We all coached a kid on what toy to buy. ‘That will break in 30 minutes.’ ‘Save up a little longer and get the good one,’” he explained. “We all had that discussion with our children. All we are telling people to do is have that discussion a little more and be very intentional about it.”

With that in mind, Glenn asked Dave how he taught his kids about the difference between socialism and capitalism.

“First thing you teach them is where money comes from. It comes from work and serving others, and capitalism, when done right, is about the service of others. As our friend Rabbi Lapin says, ‘They give you certificates of appreciation with presidents’ faces on them. They will show their appreciation when you do that. That’s capitalism,” Dave said. “Socialism is when… you do less work than someone else and they get the same grade as you. That’s not fair.”

“The name of the book is Smart Money Smart Kids by Dave Ramsey and Rachel Cruz, his daughter. [It’s] worth picking up and worth reading,” Glen concluded. “Raising kids – there’s nobody in our society that is teaching kids how to be logical anymore, even with their money. They’re not going to learn this any place else other than you. You don’t know how to teach it? Smart Money Smart Kids by Dave Ramsey.”

  • Deckard426

    I saved a fortune by not buying tickets to Dave Ramsey seminars.

  • http://truthofg.blogspot.com/ Connor Davenport

    All those self help things is nothing but a scam anyways.

  • landofaahs

    Well that means there is hope for the country if bankruptcy can be good.

  • landofaahs

    Glenn’s helping Dave promote his book and in return later on Dave will promote Glenn’s new book. It’s like DC one hand washes the other in order to make yourself rich.

  • landofaahs

    Careful Glenn, Dave thinks gold and silver are relics and not real money. I like a lot of what Dave says but when he pushes mutual funds he is singing the chorus of Wall street who make their living off exorbitant fees and algo theft style front running.

  • Matt

    I like Glenn and Dave, they both teach some amazing things that we should all know and live by. Meshed together they can make you a power house financially, politically and spiritually. It’s all about doing your own homework and doing what you feel is best for you. Because one or both of them have a topic that you don’t agree with doesn’t mean the rest of what they say is inherently bad. Cut out what you don’t like and incorporate the things you do. Im grateful to both of these men and I was excited to see them together even if it was only for a few minutes.

  • Defend The Constitution

    If we are to continue discovering better ways of doing things, as many people as possible must be as free as possible to experiment and innovate.