Dave Ramsey is a personal financial expert, bestselling author of eight books, and the host of The Ramsey Show. He offers financial advice to millions of listeners each week through his show.
Dave provides his best advice on discussing money with family in his show, books, and interviews. He said discussing money with family can be tricky and explains how to handle these situations calmly and practically.
Clear Communication
Dave has repeatedly emphasized the importance of communication in financial discussions with your family. He said that honest and open talks help maintain transparency and trust among family members. Whether you are dealing with your partner, siblings, parents, or kids, having clear communication about money can save you from many misunderstandings.
Show Your Support
While advising a reader about his brother’s irresponsible behavior with money, Dave said there are times when being with your family is more important than pointing out their mistakes. Showing care, discussing issues, and offering support can help them avoid making poor financial choices.
Don’t Be Disrespectful
Dave emphasizes the importance of respect in money discussions with family. Money is a powerful and critical topic, and clashes are expected, but it is essential to stay calm. While advising Andy about his brother, Dave told him to hold a higher standard and not tolerate his immature and irresponsible behavior. However, he stressed maintaining a respectful tone and behaviour and avoiding making hurtful comments.
Lead By Example
In the same case of Andy, Ramsey advised him to use personal examples to highlight better choices by pointing out his own mistakes and the steps he took to fix them. Dave explained that it helps Andy’s brother understand money better. However, he advised against intervening in his brother’s life too often, which could worsen the situation and harm their relationship. Similarly, we can help our family members by providing them examples, but without interfering too much in their lives.
Teach Children Early
In one of his columns on Ramsey Solution, Dave recalled a conversation with his granddaughter that made him proud of the parenting his grandchildren were receiving. Dave wrote that it is essential for parents to let their children learn from their financial mistakes. Instead of providing a safety net, let your children face the consequences, which will help them make better financial decisions. Teach them good habits from childhood, include them in financial discussions, and listen to their opinions to help them grow as great adults.
Be On Same Page
In an interview, Ramsey was asked how couples can come on the same page regarding financial planning.
Ramsey answered that it often happens when one partner has a strong vision for the future while the other does not understand the importance of financial planning. Simply telling your partner about your sacrifices will not work. Instead, You need to show them the benefits of discipline.
Ramsey suggested dreaming together and showing them how your life can be different if you have more money. What kind of lifestyle you can have? What sort of things can you do with that extra money? When you dream together, you become more willing to sacrifice and be disciplined, which helps you set better financial goals.
Create a Monthly Budget
In the same interview, Ramsey was asked to give financial advice to young couples to help them handle money matters better. Ramsey said that to manage money well, it is essential to be intentional with every dollar. This means spending each dollar with great attention and avoiding unnecessary expenses. To achieve this, it is essential to create a monthly budget together. At the beginning of every month, write down every expense. This practice helps avoid overspending and allows for better future planning with a larger vision.
Don’t Hide Your Debt
Dave received a query from a reader in debt who was not able to contribute $1000 to his parent’s anniversary. Ronald was not in a position to pay that amount.
Dave advised him not to pay any money and to discuss his financial problems with his brother. Your family should know about your debt to help you understand your financial situation. Hiding debt can lead to complications and disputes in relationships.
Include Everyone in the Planning
In Ronald’s case, his two brothers planned to give their parents an expensive gift without including the other two brothers in the discussion. Ramsey said that Ronald’s brother made the plan independently and expected others to contribute without knowing their financial issues, which is unacceptable. It is essential to Involve family members in discussions and seek their opinions before making financial plans. It helps in better financial planning and develops a good understanding among family members.
Have Clear Communication With Kids
Many parents and kids don’t discuss money much. According to a study, 69 percent of parents and 77 percent of kids are reluctant to talk about money. Ramsey said you don’t need to hold long meetings to discuss money matters and plans. Instead, start with basic questions according to your kid’s understanding level and age. Gradually, this will help develop a bond and lead to more open discussions about money and financial planning.
Budgeting with kids
It’s essential to teach your kids about budgeting. Ramsey advised letting them sit in on family budget meetings and allowing them to give their opinions while making it clear that only you and your spouse have the final say. He advised to clearly communicate with your children if you are paying off debt or saving for the future. This helps them understand the family budget and the sacrifices needed to reach financial goals.