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3 Important Money Principles Parents Need to Teach Their Kids

Rachel Cruze

Money, Jobs, & College

Q: What are the most important principles your parents taught you growing up?


Rachel’s answer:

I’m blessed to have wonderful parents who taught me healthy ways to manage money.

Here are three of the principles they taught me:

Stay Away From Credit Cards.

Nothing good comes from credit cards. You spend money you don’t have with ridiculous interest rates, and if you breathe the wrong way, the credit card companies will nail you with all kinds of penalties and fees. Debit cards are always a better idea because they are connected to your bank account—which means you’re using actual money, not a promise to pay later. Better yet, using cash instead of plastic will make you spend less. When it came to credit cards, my dad always told me, “If you play with snakes, you’ll get bitten.” The best way to avoid financial drama is to stay away from credit cards.

You CAN be a student without a loan.

A lot of people consider student loans “good” debt. That’s just not true. The average student loan debt for an undergrad degree is now more than $27,000. That means a 22-year-old, getting his first taste of the real world and making a starting salary, will begin his career in a load of debt. Instead of loans, take a part-time job during school, work full-time during the summers, and apply for every scholarship and grant you can. Also, be willing to go to a community college for a year or two, working and saving money, then transfer to a state school later.

Make a plan with your money.

You guessed it . . . budgeting. But, honestly, budgeting gets a bad rap. For a college student, it’s really easy. You’re not making that much money, and you don’t have many bills, so is it really that difficult? A budget simply tells your money where to go so that you aren’t left wondering where it went. You sit down and make a plan before each month begins. Break up your spending into categories—food, entertainment, gas, rent, etc. Every dollar has a name.

The key to teaching your kids about money is to connect with them before they head off to college and into the real world. If you don’t help them understand how to win with money, our culture will do the job for you. And you don’t want that.


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Rachel Cruze

Growing up as Dave Ramsey's kid, Rachel Cruze learned the basic principles of money at an early age. She travels across the country teaching those same principles, in a personal and passionate message of money and hope, to teens and young adults. To find out more about Rachel, visit or follow her on Twitter at @RachelCruze.