4 things you should teach your kid about money and follow it yourself, too: Dave Ramsey’s golden advice for parents

Teaching children about money starts with habits, according to author Dave Ramsey. The writer of the international bestseller The Total Money Makeover recommends four lessons for families. Children should learn to work, save, give and enjoy spending wisely.

Parents should practise these habits while guiding children through each area. Ramsey stresses balance rather than encouraging children to save, spend or give everything away.

Work: Connect effort with earnings

Ramsey recommends paying children for completed tasks instead of giving them money without conditions. This helps them understand that income comes from effort.

Tasks should suit the child’s age and abilities. Simple activities, such as sweeping the kitchen or carrying plates, can introduce this connection.

During a The Ramsey Show episode on YouTube, Rachel Cruze spoke about her 5-year-old daughter, Amelia, earning money through household chores. Amelia then used her earnings to buy a Polly Pocket toy.

Rachel Cruze, Ramsey’s daughter, co-hosts the show with her father.

Ramsey said earning through work brings dignity alongside money. Parents can encourage that satisfaction by recognising effort and explaining how earnings are received.

Save: Learn to wait for goals

Children should learn to set aside money for something they want. Saving for a toy introduces patience and the idea of working towards a goal.

Ramsey connects this habit with larger purchases later in life. Waiting and saving can prepare children to approach buying cars or homes without borrowing.

Parents should help children save money, even when other choices seem tempting. The lesson is to plan ahead rather than expect every wish to be met immediately.

Enjoy: Allow sensible spending

Saving should also lead to the pleasure of buying something worthwhile. Children need opportunities to enjoy money they have earned and set aside.

Ramsey warns against forcing children to hold on to every rupee. They could become unwilling to spend or later react by spending carelessly and taking on debt.

Amelia struggled to understand how to pay for online shopping. The toy arrived, and her cash disappeared. Parents can explain each step so children understand how money pays for purchases.

Give: Make generosity personal

Children should give some of their own earnings to help others. Simply handing over a parent’s money does not offer the same personal experience.

Ramsey encourages generosity while keeping money available for saving and spending. Even a child eager to donate everything needs guidance about balance.

Parents can follow the same approach in their own lives. Work provides income while saving, giving and sensible spending give that income different purposes.