Purchasing your teen’s first car may seem like a proud and memorable accomplishment. But according to the financial expert Dave RamseyIt’s not the best move if you want to set your children up for a successful future.
Ramsey believes that buying a car for your children can create “ridiculous expectations” about money, which could affect them for the rest of their lives. Instead, he recommends letting them buy a car independently, perhaps with some help.
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The best thing you can do for your children is to have them buy their own cars.
When you buy new cars for teens, you’re setting them up for a life full of ridiculous expectations. Think about their future.
If you have enough cash set aside, you and your child can agree on a matching plan…
– Dave Ramsey (@DaveRmsey) October 10, 2024
“When you buy new cars for teenagers, you’re setting them up for a life full of ridiculous expectations,” Ramsay chirp. In other words, handing over the car may give your teen the impression that expensive items are easy to obtain. Instead of giving them a car, Ramsay advises giving them the opportunity to work, save, and learn what it takes to make a big purchase independently.
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“Think about their future,” Ramzi says. Encouraging your teen to purchase a car independently helps them develop lifelong financial skills. It also motivates them to see the benefits of saving money, working hard, and making wise financial decisions.
Now, that doesn’t mean you can’t help at all. Ramsay suggests a compromise: “If you have enough cash, you and your child can agree on a matching plan to help with the car purchase. Whatever your child has saved, you’ll match it.”
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This method encourages your teen to save money while offering help without simplifying things. It allows parents to encourage their children while ensuring they contribute fairly.
Encouraging your teen to buy their own car isn’t just about getting the car. You are teaching them important financial skills. Dave Ramsey says:Personal finance is 80% behavior And only 20% of head knowledge. When your teen saves for a car, they’re learning the habits they need to manage their money well — which can help them greatly later in life.
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Another key component of this strategy is helping teens find independent sources of income. Ramzi points out that today, it is arguably easier than ever for them to start making money through part-time jobs, freelance work or even small entrepreneurial ventures.
Ultimately, Ramsey stresses that allowing your teen or even older child to buy a car on their own is a “tremendous gift” and an opportunity for them to learn responsibility, budgeting, and the satisfaction of reaching a major goal.
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This article Dave Ramsey says car buying for teens creates “ridiculous expectations” for life. Better to make them “buy their own car” Originally appeared on Benzinga.com
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