Getting a Handle on Your Family Finances (Part 2 of 2)

On our last Focus on the Family, financial expert Dave Ramsey shared this bit of wisdom.

The flow of money in a family represents the value system under which that family operates. Jesus said it this way. He said, where your treasure is, your heart will be also. So what you do with money screams loudly who you are.

Well, some passion and conviction there. And on today's Focus on the Family, you'll hear some practical biblical advice from Dave Ramsey. This is going to apply to your situation, whether you're single or married, with children or without. I'm John Fuller and your host is Focus President Jim Daly. John, last time Dave spoke about two different money personalities, the free spirits and the nerds.

I think you know which one you want to be in, but you often have one of each in a marriage. And he explained how you can avoid conflict with some simple budgeting ideas. And we know here at Focus, we get a lot of people writing in about the conflict in marriage around finances. In today's message, he's going to turn a corner and talk to single folks about some of the financial landmines that they particularly struggle with. Like my mom, who as a single mother of five kids was working two or three jobs just to get by, but also had a hard time saying no to, guess who, yeah, her little Jimmy. I was a bit spoiled.

Well, those are hard circumstances, especially around the holidays. And Dave will have some encouragement. He's also going to share some intriguing ideas about teaching your children how to handle money a little bit later on. Now, if you're not familiar, Dave Ramsey is a best selling author. He's a radio host, very popular, and he's been a very good friend to this ministry. He's been here a number of times, and it's a privilege to present the second half of this segment. It comes from his nine week video series, Financial Peace University.

And so from that series, here's Dave Ramsey on today's Focus on the Family. When it comes to singles and money, time poverty and fatigue can lead to poor money management. Beware when you're single of impulse buying due to stress or the I owe it to myself syndrome, sometimes known as a pity party.

I deserve a break today. I'm pitiful and I'm going to spend money I don't have. And I just feel bad and I'm just going to go spend some money. I'll feel better if I spend some money. And all these kinds of things. Be very, very, very, very, very careful of that. Fifty-five percent of the single moms in the U.S. are qualified as poor in America today.

Fifty-five percent of them, according to the Department of Commerce. And you know, we work with a lot of single moms across the country, and I'll never forget sitting in a small group session after we taught in a Financial Peace University with a single mom. And she said, Dave, I was doing this stuff so good. I had my budget down. It was Thursday night.

Everything was balanced. I'm working two jobs to get this done. I'm so tired. But we were getting there. I was starting to feel like I had discipline and had control.

For the first time in my life, I really had a sense of hope. And she said, I got up on Friday morning. We got the kids all dressed to take them to the daycare and load them in the car. We're going down the road. Cloudburst. Big time thunderstorm.

About that time, I hear boom, boom, boom, boom, boom, boom. My tire's flat. So she gets out on the side of the road.

The kids are in the car. People are driving by, splash, splash, splash, while she changes the tire. So she's late getting them to the daycare. Then she's late and wet getting into work. She comes into work. Her boss chews her out because she's late for work. And so she has to work over because she's late to make up the time and be able to keep the job. And, of course, if you're late for the daycare, they charge you $62 a minute if you come in late for the daycare. So she comes in late for the daycare.

They cha-ching, cha-ching, cha-ching, cha-ching. Picks up the kids. She has had the worst day of her life, right? She gets in the car. She's driving home.

She's just completely worn out. She said, Dave, I had nothing left in my emotional gas tank. And she said, the kids are in the back going, McDonald's, McDonald's, McDonald's. And she said, before I knew it, I went through and I pulled $20 out of the anytime teller that wasn't in there because my budget was balanced. I had already spent the money and paid the bills. And we went over to McDonald's and got a couple of Happy Meals and we went home because I just didn't have the energy to cook. I bounced five checks.

The Happy Meals cost me $157. See, you don't deserve that kind of a break today. You got to kind of take a deep breath when the kids are doing that and go, shut up, peanut butter breath.

We're going home. And go slap some peanut butter on the bread and do it another day. And I got to tell you, I know it's tough. I know those budgets are tough.

We've looked at them for years. It's hard. But I can tell you, you don't deserve that kind of break today. You have to be very careful. It's moments like that that make or break you when you have to be strong. And folks that are single and have never been married or don't have kids.

You got to be careful. A lot of singles I talk about, particularly young singles, talk about what they call loneliness spending. They would rather eat at a restaurant. Even if I'm not eating with anybody, at least there's people around that sit in an apartment by myself again.

I just can't do it. I just want to be around humans. And they go out and they go, or the gang is going out. Even if they don't want to go out with the gang, they go out with the gang. Just to be hanging out with some people. Just to have the touch and the interaction.

And every time they do that, they spend money. Be careful with that. A written plan gives the single person empowerment, self-accountability, and control. If you're in here and you're single or you're helping somebody that's single, circle that one right there.

Put stars all the way around it. That is worth you attending tonight if you're single. It's that simple. The written plan gives the single person empowerment, self-accountability, and control. How do you prevent mistakes and how do you put in place the right kind of decisions when you're single? Well, you develop an accountability relationship. Someone to discuss your purchases with. Someone to discuss your budget with. Now, who do you use for an accountability partner? You don't use your shopping buddies.

I'll get three. That's not what we're talking about. An accountability partner is someone who's willing to hurt your feelings for your own good. No, stupid. You don't need a new car. It's a flat tire.

Buy a hubcap. Now, your accountability partner could be your dad, your mom. It could be somebody that you work with. It could be an uncle. It could be your grandmother. It could be your pastor. It could be a friend.

But whoever it is needs to be somebody that has old-fashioned values when it comes to money. And they're going to look at you in love and say, you're being stupid. Don't do that.

Hey, even the Lone Ranger had Tonto. Okay? We've got to have somebody to knock this stuff off of to be able to get in our face when it's time and do that. Now, those of us that are married, we know when we get home, we've got immediate accountability.

You bought what? That just goes with the territory. And I'm not saying when you're single that somehow you're incomplete. That's not my point. My point is, though, that two heads are better than one.

And if you'll reach outside, find that special someone in your life that will get in your face on financial issues or any other issue, spiritual issues, it will cause you to grow and cause you to be able to win. Accountability is an absolute necessity. When it comes to kids and money, teaching your kids how to handle money is not the school's responsibility. They should be doing it.

By and large, they're not doing it. And you've got to remember, ultimately, it is your responsibility. It's your responsibility to make sure your kids are taught. This stuff is not taught in schools. We have a high school curriculum called Financial Peace for the Next Generation. It's taught in a couple of thousand schools.

And if it's not in your high school, then it's your job to teach your kids about money and don't wait until they get to high school anyway. It's part of being a parent to teach them these things. It's part of being a parent to teach them to drive, to teach them to wear clothes that fit their body. This is part of being a parent, isn't it? We have these responsibilities, and we can't let someone else out there take that job from us.

We will be disappointed in the results. Proverbs 22 says, you've probably heard this, Have you heard it? Train up a child in the way he should go, and when he is old, he will not depart from it. Have you heard that?

Say yes. Here's an interesting thing. I have never heard anybody quote that scripture with the one immediately following it.

It's interesting. Proverbs 22, 6. Train up a child in the way he should go, and when he is old, he will not depart from it.

22, 7. The rich rules over the poor, and the borrower is slave to the lender. Maybe we ought to teach our kids about money. Maybe we ought to teach our kids about debt. That when you sign up for a credit card, it doesn't make you an adult. It makes you a slave.

There's an idea. Maybe we ought to teach our kids about work. Things like in the Bible, it says the diligent prosper, but he who hastens to be rich will not go unpunished. Get rich quick doesn't work.

Working your tail end off does work. That's what that says. And teach those lessons to our kids. Around our house, we pay commissions, not allowances. We never had allowances at the Ramsey household. I don't believe in allowance. Allowance to me sounds like welfare. It sounds like I'm going to make allowance for you because you're somehow deficit.

You're not able to do anything of value. So I'm going to make allowance for you. Commission says that if you work, you get paid. If you don't work, you don't get paid.

That's what commission says, and that works every time. I remember one time we were driving along. Our kids were a lot smaller then. One of mine was about 13 years old and was going on, Dad, why are you so tough on us? Our friends don't have to work the way you work us. You make us work. You make us do all these things. You make us do this. You make us save money. We have all these rules that other kids don't have. Dad, why are you so tough on us about this money stuff?

Is it just because you're afraid you're going to be embarrassed? I went, well, yeah, that's part of it. But I said more than anything, the reason I'm so tough on you is this. We've done a great job with money, so we've got a lot of it. And so when we die, you're going to be very wealthy. And if you don't have the personal character, the muscle and the bones of character to carry the weight of that wealth, it will ruin your life. It will take away your desire to win. It will take away why God put you on the planet and you'll become one of those trust fund babies. Stinky things.

I don't want any of those. I want children that are arrows that we turn loose, that are straight and they're clean and they fly true and they hit the mark. That's what we're trying to grow. And that happens with lots and lots of forming and reforming and reforming.

That's the character to carry that wealth. You see, words are powerful. Be careful what words you're using with your kids. What are you speaking into their lives?

What are you speaking at them? You've got to be very careful about that. See, if you work, you get paid. If you don't work, you don't get paid. Around our house, we use the stuff that we now have in a thing called Financial Peace Junior. We used to put on the refrigerator door, we would put a commission worksheet that looked a lot like this.

Little magnets on the back and we'd stick it to the door. And we write on here the chores that you had to do. And we put a dollar amount beside each of the chores.

Now, it wasn't a big complicated thing. When they were pretty small, you know, they're six, seven, eight years old, it was five chores and it was a dollar a piece for each chore. So you do all the chores, you get five bucks. You don't do all the chores, you get four bucks, three bucks, whatever. And so we'd check off if you did them and you got paid if you did them. If you didn't do the chore, you didn't get the money. It's that simple. You don't have to be so hard on them.

You want to do it age appropriate. We don't want to create Hitler's boot camp for money. That's not the point, okay? But we do want these kids to learn this stuff at four, five, six, eight, ten years old because I meet 58-year-olds who still haven't made an emotional connection between money and work. It's how money is created. It's created with work. And so we use the basic commission thing. We think that around our house you ought to just do chores just because you're part of the family.

I said five. The rest of ours you do just because I'm larger than you and I can hurt you because you're part of the family. When I get up from the dinner table and take my plate to the sink and scrape it off and put it in the dishwasher, I didn't do that because I get paid.

I did that because I love my wife and it's one way I can serve her that evening after she's been in a hot kitchen all day, okay? That's that deal. And the same thing for my kids. They love their mom, they love their dad. They need to do stuff as being part of the family.

That's part of the deal. But if you only do that, you don't ever teach them that work creates money. Because I got to tell you, when they earn money and they have money that's in their hand that they earn, they treat it different.

And they make different decisions at that point. And you get to teach them other teachable lessons. So do some things that are just because you're part of the family. But do some things where we make that connection and create teachable moments in the process as well. Teach by example as well.

Here's an idea. You've got to understand that they're going to do what you do. If you're stressed out and the way you medicate stress is you pray, then they're going to pray when they're stressed out. If the way you medicate stress is you go buy a new dress, they're going to go buy a new dress when they're stressed out. They're watching you. They smell this stuff.

You know, the old thing, I would rather see a sermon any day than hear one. And kids, that's how they live their whole lives. When our children were little, our oldest, when she was a little bitty kid in preschool, the little teacher took, this was a brave little teacher, took each of these little kids and put their little feet in paint and put the little footprint on a little cardboard thing. And it looks like this.

This is my oldest, Denise. And then they wrote across the top, I'm following in your footsteps. Now if you put that on your office desk for a couple of years, it'll change how you act and react about just about everything, won't it? Because they're watching. They're going to do what you do.

So you can teach and you can have all these speeches and all these other things. You can take them to all the Dave Ramsey stuff and all that stuff. But ultimately, you're running around borrowing money every time you turn around. Your kids are going to run around borrowing money every time they turn around.

That's what's going to happen. You are their family of origin. And you're going to bless them or curse them with that process. Now as you're teaching them, be age appropriate in the process. You know, show them how debt works. Show them how to be debt free.

But a four-year-old doesn't grasp that. But as you're talking to teenagers, they get a little bit older, talk to them about how insurance works. Talk to them about what a Roth IRA is or what a 401k is. Talk to them about taxes and voting and these kinds of things.

Because you want to raise them that vote like you do, right? I mean, that's how that works. So if the children are very young, when you start out, just use a clear plastic container like this. And as you pay them, wad the money up so it takes up more room and stuff it down in there. See, that's not a lot of money in there. That's a bunch of ones just wadded up and stuffed in there. But if you had that in a neat little pile, you nerds, it really wouldn't look like a lot of money. This is a free spirit savings account right here, okay? But here's what happens, see? When you're four years old and you clean up the room, did you really clean up the room?

No, not really. Around our house when you're four years old and you clean up the room, you picked up three or four toys, mom and dad did the rest, and you got all the attaboys and attagirls. You are a superstar room cleaner. You are awesome. Give me a high five on a clean room.

Way to go. Hopefully they'll kind of get that in their spirit, and then when they're a teenager it won't look like a nuclear dump, you know? So you do that, you train them, right? And then, let me tell you, pay them right then. That was hard work cleaning up that room, and I'm really proud of you.

That was good. A dollar. Doesn't have to be a lot of money. And you crumple it up and you put it in here.

And then every so often, you don't have to have a big system, that's the whole system when they're tiny, okay? Every so often you get them all out, all these dollars out, and you smooth them out, and you go down to Toys R' Them. I remember one time we went down to Toys R' Them, and we were there to buy Celebration Barbie. And we didn't have the money, so we got, sort of kind of had a Party Barbie. I got to tell you, that was a character-growing experience right there, to not buy what we went after because we didn't have the money. Because I'm looking at those little eyes looking up at me, Celebration Barbie, man! It was a character-growing experience for me. I remember it.

The kid doesn't even remember it. Because I had to go, because I mean, it's just another few dollars. I mean, aren't they sweet and this cute? That's how this works. Now, do I do that every time?

No, sometimes I just step up and totally buy Celebration Barbie. But other times, we're like, okay, this is how this deal works. Money is finite. There's only so much of it. You need to get that in your spirit as you go along. You don't get everything you want. Well, I deserve it. You don't deserve it unless you have the money. That's when you deserve it. That's how you want to transfer this.

Just having big, cute eyes doesn't give you the right to deserve everything. We got people all over our culture trying that, and it just doesn't work, right? So we used three envelopes at our house. We used the spending envelope, the saving envelope, and the giving envelope when we paid the little guys.

And so giving, spending, saving. You know, what we would do is take that $5, those five $1 bills, and we would break them up into these three envelopes. And so we'd say, okay, we're going to put into giving, we're going to put $1 in the giving envelope. We're going to put $2 in the spending envelope and $2 in the saving envelope. And then when we get ready to go do some giving at church, what do we do? You go get your giving envelope on Sunday, and you take your money that you earned, and you give your money.

That's different than, oh, we're getting out of the car, walking through the church parking lot. I'm going to give you a little money for the children's church plate. That child didn't do anything. They were just a courier for your money. They don't receive any kind of lesson from that. They don't receive any kind of blessing from that. But when they cleaned up their toys, and they fed the dog, and they did the dishwasher, and then some of that money is given, their little character starts to change. And you know, they're more natural givers than you and I are.

It's not hard to teach them to give, most of them, okay? And you teach them to save money and to set some goals, and you teach them to spend money, and you do celebration barbie, or sort of kind of had a party barbie, or whatever you need to, you know. You buy whoever you can afford. That's what you do. And you save up that money and do that. So work the three like that until they get a little bit older.

Now, when they get a little bit older, they're 13 to 15 years old, what we did at that age, 15, 16 years old for some of them, if they've been trained on this other stuff all the way up, and they've got these ideas of work, giving, saving, spending, and how money works in those four categories, then you can put them on a checking account. We did that with our kids. We said, okay, here's what we normally would spend on you in our neighborhood on clothing, on entertainment, on car gas for your car that we would give you.

Not the car, but the car gas. Here's the money that we would normally spend on you anyway. We're not going to give it out to you like 20, 20, 20, 20, 20 dollars, 20 dollars, 20 dollars, 20 dollars, 20 dollars. I was on vacation the other day, and I saw this dad by the pool that said, had a t-shirt that said, my kids think I'm an ATM. And I looked at that, and I thought, no, your kids think you're spineless. They think there's no end to you. They think they can just come up to you at any time and do anything with you. That's not funny to me.

It's kind of sick. And so instead, what we're going to do is we're going to give you this amount of money in your checking account at the first of the month. When we started doing that, our girls, particularly, started shopping at different stores.

Because you buy one dress with that amount of money, or you can buy 15 things with that amount of money. It just depends on how you think about it. And when that's it, and they really believe that dad said that's it, then that's it. And it's been amazing.

And you get the opportunity. They have a new chore. Keeping the checkbook balanced. Not bouncing any checks. I've got one that's never bounced a check. All the way up through college has never bounced a check. I've got another one that bounced a check one time. Can you imagine being Dave Ramsey's kid and bouncing a check?

Oh, man. I made that one go down and talk to the banker. I said, you have to go down to the banker and personally apologize. You will never bounce another check again. You just do that one time when you're 16 years old, right? You apologize for lying to them, for writing a check out of their bank that you didn't have the money in there to cover. You lied. It's an integrity issue. Dad, you're kidding.

No, I look like I'm kidding. You get your butt down there. Change their life. What a wonderful lesson. What if somebody had done that to me when I was 16? It would have been a whole different Dave Ramsey story, I can promise you. It's a whole different mindset on how this stuff works.

The other thing we've done is we decided when our kids were teenagers, and long before they were teenagers, we started telling them this. We're not buying your car. I'm not going to buy your car. I'm saving up, I'm going to pay for your college education, but I'm not buying your car. If you want a car, you better save up the money. We've been blessed, so I will match you. Our matching plan is 401, Dave.

I'll match you as you go along, but I am not buying your car. So whatever you save up, that's what you're going to have. One of them was saving along, and somebody asked them the other day, you know, how are you doing towards your saving? And they said, I think I'm headed towards a really nice bicycle.

So I'm going to have to kind of get with it. But I tell you what, the first one saved up some money, got a matching, got a nice car. The second one went, whoa, that happened for real. Dad wasn't kidding.

Got on the ball, got more money, got a bigger, nicer car. The third one's going, Dad, I'm thinking new Hummer. And really, probably could have pulled that off, but we kind of went in and intervened. So here's my suggestion to you. If you're going to do the 401 match thing, I would recommend on the front end saying, up to a certain amount. Put a limit on it, okay? I wasn't smart enough to see this coming, because as they move down the siblings, they get smarter about this, okay? Once they see it's a real deal, and it's really, really, really going to happen.

So the deal is this. You need to teach your kids about money, and they want to know. A Charles Schwab survey just the other day said 89% of teens want to know more about money. That's why the high schools need to be teaching it. Teens are really hungry for this stuff. They want to know how it works. And you had a jumpstart coalition study of high school seniors, did a survey and did some testing of high school seniors all across the nation in all kinds of different socioeconomic settings. It wasn't just poor neighborhoods or rich neighborhoods.

And here's what happened. 52.4% of the people that took the exam, a basic personal finance exam as a senior in high school, achieved a score of F. And yet they're getting ready to graduate from high school, and we're going to turn them loose and send them out there. Who's going to teach them about buying a new car?

Car dealer? There's a plan. See, we parents have got to get involved, and the schools need to get involved. There's a whole process there. You have the ability to change your family tree. Don't just give them money. If you do the stuff we teach in here, you're going to become wealthy. And if all you give them is money and no character, you will be a curse in their life.

You'll change your family tree in a negative way. Teach them to work. If you teach them a work ethic, if you teach them integrity, it gives an inheritance to his children's children. And it's not just an inheritance of money.

It's an inheritance of character. And if they learn all of these things, if you just give them a work ethic and honesty, they'll be able to go win if that's all you do. If you give them a work ethic, honesty, and money, well, you've started a new thing.

You're the new Rockefellers. And so kids really care about this stuff. Be proactive. Warren Buffett said give enough money to your kids that they can do anything, but not enough that they can do nothing. So marriage and money, it's absolutely essential for nerds and free spirits to unite. It's absolutely essential for you singles to take control of your life.

Put someone that's accountable to you or that you're accountable to in your life. And those of you that are raising kiddos, don't be afraid to parent. Be a brave parent. You're going to make some mistakes.

Don't let those mistakes disqualify your authority position. Step into their lives. Be loving and firm and be there for them and teach them this stuff. This stuff works. Thanks for being here. We've so enjoyed listening to Dave Ramsey here on Focus on the Family today, and I hope you've enjoyed attending, if you will, through this broadcast, one session of his Financial Peace University series. Well, Dave Ramsey has such a wonderful perspective on how to teach our kids about money and how to encourage them to work, not just receive handouts from mom and dad or the government. And the way things are going today with supply chain problems and all types of product shortages, we need that work ethic now more than ever. So let me recommend a book that Dave and his daughter Rachel have written.

It's called Smart Money, Smart Kids, Raising the Next Generation to Win with Money. And that's a great resource for parents who want to follow up on what we've heard today. And if this broadcast brought up some issues for you, maybe you're a single parent or you're struggling to make ends meet, please give us a call. Our friendly staff would count it a privilege to hear your story and pray with you over the phone. And if your situation warrants it, they can have one of our caring Christian counselors give you a call back.

And they do excellent work. Here's a response we received from Shelly. She said, I just wanted to call back and say that I am so thankful for the free consultation you provided. It was a life-saving conversation, and the counselor gave me some really sound and godly advice. Thank you, Focus. And Jim, as you know, over the years, our family has taken advantage of the opportunity to talk with members of the counseling team here at Focus. It's been so helpful.

Shelly is right. They do a tremendous job. Well, we thank God and our donors for making it possible for Focus on the Family to offer these counseling services free of charge for over 40 years now. So let me encourage you to donate today and help us help others. And when you make a generous donation of any amount, we'll send you a copy of the book, Smart Money, Smart Kids, or The Total Money Makeover by Dave Ramsey. Just give us a call now. Our number is 800, the letter A in the word family, 800-232-6459. Or you can donate online and request the book, Smart Money, Smart Kids, or the book, The Total Money Makeover.

We'll have the links in the show notes. Coming up next time, author Julie Lavender will encourage you to embrace the little moments with your children. You know, when we build these memories as a family, I think it helps a child feel loved and valued. You know, it creates a bond with common language or shared experiences. On behalf of Jim Daly and the entire team, thanks for joining us today for this Focus on the Family podcast. Take a moment, please, and rate us in your podcast app.

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