Financial adviser Dave Ramsey warns against helicopter parenting and suggests that young people need training on traditional savings methods.
Key Details
- Ramsey is known for a “tough love” approach when making financial suggestions for how parents ought to interact with their children.
- In an interview on Fox & Friends, Ramsey suggests that his traditional methods of saving money would best prepare these young adults to live on their own.
- One of Ramsey’s more controversial opinions is that parents should charge their adult children rent, with the understanding that they had given them an adequate financial education when they were younger.
Why it’s news
During the pandemic and ensuing economic difficulties, many children moved in with their parents or chose not to leave at all after turning 18. Around 18% of the U.S. population is living in a generational household, according to a March 2022 Pew Research study.
Ramsey’s advice that parents should charge their children rent comes with the caveat that they must first teach their children how to manage finances. Referencing an example of parents who had charged their daughter rent, Ramsey says, “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.”
When it comes to parents and their role in financially independent children, Ramsey suggests that “helicopter parents” can be dangerous for young people. He says that so many children choose to live with their parents through their 20s because their parents continue to do everything for them.
“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,” Ramsey says.
One of the ways Ramsey encourages parents to educate their children financially is through his Financial Peace Junior program. This teaches children to divide any money they have—allowance, birthday money, or random cash—into a give, save, or spend category.
Ramsey says that the goal of this method is not to grow a child’s savings but to help them “develop their muscles” when it comes to financial responsibility and savings.
“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 says.
