Buying your teen’s first car may seem like a proud, momentous milestone. But according to financial expert Dave Ramsey, this isn’t the best move if you want to give your children a successful future.
Ramsey believes buying a car for your children can create “ridiculous expectations” about money that could affect them for the rest of their lives. Instead, he advises them to buy a car independently, possibly with some help.
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The best thing you can do for your children is let them buy their own car.
When you buy new cars for teenagers, you prepare them for a life of ridiculous expectations. Think about their future.
If you have enough money set aside, you and your child can agree on a suitable plan…
— Dave Ramsey (@DaveRamsey) October 10, 2024
“When you buy new cars for teenagers you’re setting them up for a life of ridiculous expectations,” Ramsey tweeted. In other words, handing over a car may give your teen the impression that expensive items are easy to obtain. Instead of giving them a car, Ramsey recommends giving them the opportunity to work, save and learn what it takes to make a major purchase on their own.
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“Think about their future,” Ramsey says. Encouraging your teen to buy a car on their own will develop lifelong financial skills. It also motivates them to see the benefits of saving money, working hard and making wise financial decisions.
This doesn’t mean you can’t help at all. Ramsey suggests a middle ground: “If you have enough money, you and your child can agree on a matching plan to help buy the car. Whatever your child saves, you will match it.”
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This method encourages your adolescent to save money while lending a helping hand without oversimplifying things. This 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 teach them important money skills. Dave Ramsey says, “Personal finance is 80% behavior and only 20% head knowledge.” When your teen saves for a car, he learns the habits he needs to manage money well – which can help him a lot later in life.
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Another essential part of this strategy is helping teens find independent sources of income. Ramsey points out that today it is arguably easier than ever for them to start making money through part-time jobs, freelance gigs or even small entrepreneurial projects.
Ultimately, Ramsey emphasizes that allowing your adolescent or even an older child to buy a car for themselves is “a wonderful gift” and an opportunity for them to learn responsibility, budgeting and the satisfaction of achieving an important goal.
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This article Dave Ramsey says buying cars for your teens leads to a lifetime of “ridiculous expectations.” Better To Have Them Buy Their Own Cars originally appeared on Benzinga.com
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