My son revealed to me at age 14, that he wants his first car to be a Cadillac STS. My daughter wanted a Jeep. Some kids want BMW’s, Mercedes, Audi’s or Land Rover’s to drive but it doesn’t mean we can run out and get them what they want. We usually make sure that the purchase is a realistic one that makes sense. One they can afford to buy on their own (for some), or one that they can contribute to (for others). Some kids are given their first car, but most parents aren’t buying their sixteen year old a new BMW.
There are many ‘teachable’ moments in terms of ‘finances’ that we can use in guiding our children. The ‘first car’ is one of them. Putting your kids on a ‘commission’ at an early age and paying them once a week for their chore list, instills that they earn when they work. They gain a sense of ‘ownership’ and ‘pride” in their efforts. They get to watch their efforts accumulate and they can set goals for how they will use THEIR money.
My son Alex is diligently saving HIS money as of this writing for his first car. I had established early on (age 12) that I am not buying him his car (same with his sister 3 years ago so he knows I’m serious) I will ‘match’ what he saves up to $3000. I had to set a threshold, because Alex WILL work and save diligently to get the car he wants which could have turned out to be a $14,000 ‘first car’. Let’s face it, when it’s their funds they are using, they make more calculated decisions, versus when we are picking up the tab. When we let our kids know that we aren’t paying for all they want because we already provide what they ‘need’ they may at first seem slighted, but they come around eventually.
They learn patience. They learn contentment. They learn to negotiate. They learn to shop and research. And most importantly they learn they are capable.
I believe these qualities are so important and if I can use the ‘first car’ as a way of invoking them, it’s a win win for both of us! Have you thought about milestones that you can use to raise financially responsible young adults?