A Teenager's Savings

A Twitter listener wants to know what a 15-year-old should do with the $5,000 he’s saved. Dave says he can do anything he wants with it, but teenagers at that age have two priorities: college and cars.

QUESTION: A Twitter listener wants to know what a 15-year-old should do with the $5,000 he’s saved. Dave says he can do anything he wants with it, but teenagers at that age have two priorities: college and cars.

ANSWER: You can do whatever you want to with it. I think you’ve got to decide what his goal is. Fifteen-year-olds really have two primary things to think about: cars and college. There’s not a right or a wrong here, but here’s how it went down at our house. We had a rule: We are going to save up and pay for your college. We decided we weren’t going to pay for cars. We did agree—because we’d been blessed financially—to match them. Whatever they saved up, we’d add that much to it. We had 401(Dave).

Do put a limit on the matching, parents. They do catch on. The younger kids watch the older kids do it, and later on, it gets out of hand.

Around our house, the $5,000 would be his car money, because we’re going to pay for his college and not the car.