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.
I wrote a blog post just about one year ago and TODAY there is a new car sitting in my driveway! My son Alex had diligently saved HIS money for his first car. I had established early on (age 12) that I was not buying him his car (same with his sister 5 years ago so he knew I was serious) I will 'match' what he saves up to $3000. I had to set a threshold, because Alex would have worked and saved 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. So he sifted and sorted over the past three months to find what his money could get him. He found a 2009 Dodge Avenger with just over 130,000 miles and got it for $1000 under book value at $4000! (trust me when I tell you he seemed more concerned about not using up his entire 10 years of savings in one spending spree!) 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.
Through this process HE learned patience. HE learned goal setting. HE learned contentment. HE learned to negotiate. HE learned to shop and research. And most importantly HE learned he was 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?
