How parents can raise money-smart kids

This is a rush transcript from "Your World," April 22, 2014. This copy may not be in its final form and may be updated.

ERIC BOLLING, GUEST HOST: Given a choice between admitting their weight and admitting their credit card debt, more people would rather admit their weight. To financial guru Dave Ramsey and his daughter, Rachel Cruze, how to tackle credit card debt. And they are out with a brand-new book right here, "Smart Money, Smart Kids."

Ramsey, I love you. We're buddies.


BOLLING: I'm going to go to Rachel first, though.


BOLLING: Rachel, tell me about the book. Who is this book written for, the kid or the adult?

RACHEL CRUZE, CO-AUTHOR, "SMART MONEY, SMART KIDS": It's for the parent. So, it's for parents, how to teach your kids how to handle money. So, we give you practical steps on how to do that.

BOLLING: All right. So, how did he do teaching you how to handle money?

CRUZE: He did well. I was fortunate enough to grow up in Dave Ramsey's house. So, money, it was not an obsession. I think some people think we had like mutual fund parties and stuff growing up, and that was not the case.



BOLLING: No mutual fund parties.

Dave, when did you start to teach Rachel about money? What is the right age to start talking about money?

RAMSEY: All three of the kids, we started around four.


RAMSEY: And it starts with the basic idea -- but we didn't send them to the salt mines or anything. It's OK.

But this idea that work equals money. And so clean up your room, which when you are four really means mom and dad cleaned it up and you picked up three toys, but you get all the credit.


CRUZE: And you get a little bit of money, maybe a dollar. And you wad it up and put it in a clear jar. And we start then. And then you have got the opportunity to start teaching some other things.

But I meet 54-year-olds who still don't know that work is where money comes from. So, you got to start with that one.

BOLLING: Now, Rachel, I have a 15-year-old son, sophomore in high school. And every time he gets a buck in his pocket, that buck is out the door somewhere. What is he doing wrong?

CRUZE: Yes, he's a spender. But that's OK.

Kids, like us adults, you are either naturally a saver or a spender. And so for me growing up, I was always a natural spender. But mom and dad did well with forcing me to save, and forcing me to give even, so I could build all three muscles. So, you want to teach your kids to give, save and spend, but they're going to naturally bend one way or the other. So, I'm just like your son. But they reined it in for me.

BOLLING: Now, you went to college?

CRUZE: Yes, I did.

BOLLING: Did you participate in that? Did you help pay for college or this guy do it for you?

CRUZE: Well, actually, yes, mom and dad did. They live out what they preach. And so we were fortunate enough to go to school.

And they told us that we had to stay in state and we had to graduate in four years. Anything above and beyond that, we had to pay for.

BOLLING: What -- some advice to people watching right now, Dave. What should people do? At what stage of the game do they have to start putting away for college, putting away for after college and whatnot?

RAMSEY: Well, saving for college is very, very important.

We have got a student loan crisis in America. It's larger than credit card debt now. And it's a real problem for these young families that come out with this $100,000 in student loan debt thing. So, moms and dads, start as early as you can. But in addition to that, wherever you are, you can go to school today debt-free in America.

And a lot of our student loan crisis really is mom and dad not guiding them and saying you can't afford to go to this school, and you need to put your arm around your 18-year-old and say no.

BOLLING: What's worse, student loan -- student loan debt or credit card debt. And I know all debt is bad, but if you got to pick one, what do you do?

RAMSEY: I would pick neither.


RAMSEY: I don't have to pick one.

And so I'm going to go to school. I'm going to get my education by working 20 to 40 hours a week. You can do that. I worked when I was in school. Did you work when you were in school?



BOLLING: I did. I played baseball and I worked as well. I had to work to pay for my food.


RAMSEY: And that's not child abuse.


CRUZE: And studies have shown us that if the average college student works 20 hours a week, they can actually pay their way through an in-state school.

BOLLING: Rachel, what are you doing now? Are you saving money?

CRUZE: Yes, I am saving money, yes, doing everything mom and dad taught us growing up. And so I'm fortunate enough to have that foundation.


BOLLING: Is there a secret?

CRUZE: No, there's not a secret.

RAMSEY: You just save.

CRUZE: It's just common sense.

BOLLING: And 20 percent of your paycheck, put it away somewhere.


BOLLING: I know he's got scissors cutting up the credit cards.


CRUZE: The credit cards, that's right. That's right.

BOLLING: You have credit cards?

CRUZE: No, don't have credit cards.


CRUZE: Never. Never. I have never had a credit card.

RAMSEY: Never had one.

BOLLING: Ramsey, she have a credit card?

RAMSEY: Doesn't have a credit card. I don't either.


RAMSEY: You know I don't.


BOLLING: I know you don't.

I'm wondering if she sneaks around, like most kids sneak around and steal...


RAMSEY: That would be rebellion at the Ramsey house. The ultimate rebellion.



BOLLING: It would be a credit card.

The book is called "Smart Money, Smart Kids."

Man, it's a lifestyle, isn't it?

RAMSEY: It is. It's about teaching your kids daily in that day-to-day rhythm of life.

BOLLING: That's what it's all about.

Dave Ramsey, Rachel Cruze, thank you guys very much.

RAMSEY: Thank you.

CRUZE: Yes. Thank you.

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