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Rachel Cruze: Smart Money, Smart Kids

CBN.com - When Rachel was six months old her parents, David and Sharon Ramsey declared bankruptcy. Dave had been doing real estate deals and gotten pretty good at it. By the time he was twenty six, he had a portfolio worth about $4 million. For a while, Dave and Sharon lived the high life. Then, as a result of a lot of bad business decisions everything fell apart. Gradually, her parents rebuilt their finances by making smarter decisions with their money. Her mom became a coupon queen and her dad often worked fifteen hours a day just to put food on the table and pay off creditors. Rachel and her siblings were raised on second-hand, consignment clothes. “You see, mine was the first family to go through the “Dave Ramsey plan” and it wasn’t always easy,” shares Rachel. The good news is she grew up watching her parents handle money the right way.

Now as an adult, Rachel says she and her husband, Winston, follow the Dave Ramsey plan. “We work, give, save, and spend in a way that’s already setting up a legacy for our own future kids and grandkids.” They do a monthly budget, plan for big expenses, and never even consider debt a useful tool. “From the very beginning, my parents gave me a legacy of debt-free living, and that’s one of the best gifts any parent could ever give their kids,” shares Rachel.

After graduating from college Rachel joined her father’s company in 2010. She is passionate about educating the younger generation on how to handle money. Rachel has traveled around the country speaking at colleges, churches and conferences about the dangers of debt, how to budget money, and save for the future. She has been speaking to audiences as large as 10,000 since she was 15 years old when she began making appearances on stage at events with her father as part of Total Money Makeover Live! She also teaches Foundations in Personal Finance, a personal finance curriculum geared toward high school and college students.


Rachel remembers a trip to Opryland with her parents when she was six years old. She took the money she had saved and unwisely spent it all on the first game in the amusement park. For the rest of the day she had to deal with the fact that she had wasted all her money on impulse. Rachel learned an important lesson that day. Dave told her, “Rachel, when the money’s gone, it’s gone. Once you spend it, you can’t get it back. If you’re already out of money, you’re done for the day.” Rachel says kids will never win with money until they understand that money can – and often does – run out. It is important for parents to teach kids that money has limits so they will be less likely go into debt as they get older. We live in a culture of instant gratification. Teaching kids the importance of saving to buy things teaches them to make wiser, less spontaneous purchasing decisions. This was a lesson Rachel remembers well when saving for her first car. Dave and Sharon told her and her siblings they would pay for half the cost of their cars when they received their driver’s license. Dave called it the “401Dave Plan.” Rachel saved diligently from the time she was fourteen for her first car. On her sixteenth birthday she had a total of $8,000 saved up. Her parents matched the amount which gave her a total of $16,000 to spend on a car. “I knew the car was mine, not because I owned it, but because I earned it,” reveals Rachel. In the process she learned that hard work, patience, and wise decision making paid off.


A budget creates boundaries and tells your money what to do. Kids under fourteen don’t really need to do a written budget, their envelope system is their budget. Rachel encourages parents to give their child three specific envelopes: one named Spend, one named Save and one named Give. Every dollar they earn from chores, babysitting, etc. needs to be spread across these envelopes. For example if you earned five dollars you would take one dollar and place it in the Give envelope (because giving always came first in Rachel’s family), two dollars in the Save envelope, and two dollars in the Spend envelope. This is a basic form of budgeting that can work even for small children.

  • The Spend Envelope was meant to be enjoyed. Rachel was allowed to use that money however she wanted.
  • The Save Envelope was meant to help Rachel and her siblings set savings goals for a certain toy that would take weeks or months to earn enough money to buy. Once Rachel would reach her savings goal she would then take her Save envelope to the store and make her purchase. Learning how to save taught Rachel patience, goal-setting, and delayed gratification.
  • The Give Envelope was very important in the Ramsey household. The first thing she did with her money was set aside a tenth in the Give envelope. “By the time I was six, my parents had stopped giving me their money to drop in the offering plate at church and I took my own money from my Give envelope,” shares Rachel. “If your children never see you give to someone or something else, then they’ll never learn how to do it themselves,” shares Rachel. As a parent you need to pull out your checkbook once a week so your kids can watch you write a check for your tithe. Use this opportunity to remind them what the tithe is and why it is important.

Rachel and Dave have created a site called http://www.smartkidslaunchpad.com to help parents and kids learn about money. Launchpad teaches your kids how to: prioritize their spending by giving them imaginary cash; become thoughtful givers; develop patience while working and saving for a big goal; educates your kids on how much things really cost.

Mentioned in the Video



Guest Info


Author, Smart Money, Smart Kids (2014)


Received a B.A. in Communication Studies from the University of Tennessee

Married to Winston


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