Renowned financial adviser Dave Ramsey has ruffled the feathers of parents nationwide with his old-school solution for young people trying to save money.
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The online debate began when one set of Texas parents revealed they started charging their 19-year-old daughter rent to live at home – a piece of advice they had taken from Dave Ramsey.
The Ramsey Solutions founder deepened his argument during an appearance on “Fox & Friends,” claiming that traditional saving methods will leave young adults “well-prepared for life.”
“This 19-year-old daughter was well-prepared for life. And parents who had some good, loving, kind common sense. They were using the rent not as a method of making money off their kid, they were using rent as a reason to give her a reason to go ahead and leave the nest. And she did. She was there for just a few months, went and set up her own house. And she was capable of doing that because she had a good mom and dad who coached her,” Ramsey explained to co-host Steve Doocy.
The personal finance professional bolstered his claim by issuing a dire warning to “helicopter parents.”
“We got a group of people that have 28-year-olds living in their basement. Helicopter mom is taking care of everything. They’re sitting amidst their participation trophies, and in a great irony, are playing Call of Duty. I mean think about this, this is crazy,” Ramsey continued.
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“You’re not doing your child a favor when you allow them to have a hammock in your house. You are doing them a favor when they have a safety net. Sometimes kids, grown kids, go through hard times and need to return home for a little bit. I would take care of my kids that way, but they’re not going to live with me indefinitely, because they don’t have dignity when they’re doing that. They don’t have the sense of confidence on how to tackle the world.”
Some parents have adopted Ramsey’s saving technique called the Financial Peace Junior, which prompts kids with a “give,” a “save,” and a “spend” envelope. Whenever the child brings money into the house, they are forced to divide their earnings into what they feel to be the most effective and sensible envelope option.
“It’s not that the child’s going to change the world with any one of those things, but we’re just developing their muscles. You know, we make them do their homework, we make them brush their teeth, we make them put dishes in the dishwasher, hopefully. And so where they’re going to build their muscles of things that give them life skills,” Ramsey said, Thursday.
“My job as a parent is not to create great kids. It’s to grow kids in such a way that they become great adults,” he concluded.
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