Yesterday I gave a brief review of Smart Money Smart Kids by Dave Ramsey and his daughter, Rachel Cruze. Today I want to summarize ten of the lessons I learned from the book.

1. We are all teaching our children how to handle money. The only questions are: (i) are we doing it intentionally or accidentally? and (ii) are we teaching them good lessons or bad lessons?

2. However bad your financial past, you can start to make it better today, change your family tree, and leave the best possible legacy for your children – a good example of financial stewardship.

3. Teaching your children financial stewardship begins with teaching them how to work because work builds discipline and self-denial. Giving our children money without expecting them to work breeds an entitlement mentality. Studies show that students who work ten to nineteen hours a week actually have higher GPAs on average than students who don’t hold jobs while in school.

4. We should teach our children how to divide all income into three main categories: save, spend, give.

5. At times we should let our kids suffer the consequences of their financial decisions – if our kids don’t learn how to make small inexpensive mistakes when they are kids, they will make huge and expensive mistakes as adults.

6. Teach our kids the value of the least used word in parenting today “NO!”

7. The Five Foundations for teenage financial responsibility:

  • Save a $500 emergency fund.
  • Get out of debt.
  • Pay cash for a car.
  • Pay cash for college.
  • Build wealth and give.

8. You will never get out of debt or build wealth if you have a car payment… Paying cash for a car and buying a used one is the shortest path to building wealth.

9. If you want to raise money-smart kids, you have to raise kids who are content… A heart filled with gratitude leaves no room for discontentment.

And the BIGGEST lesson of all in the book:

10. We must teach our children that they don’t own money—they are simply managers, or stewards of it. Owners have rights; managers have responsibilities. Owners think of themselves; managers can’t. It isn’t their money, so they must think of others. Owners worry over their money; managers don’t need to worry because the money isn’t theirs to begin with. Owners hold with a tight fist; managers hold with an open hand.