Lisa says her daughter is modeling at 14 years old and making $3,000–5,000 a month. Lisa doesn't want her to become spoiled with this income. What would Dave recommend saving for a car when the time comes?
QUESTION: Lisa in Los Angeles says her daughter is modeling at 14 years old and making $3,000–5,000 a month. Lisa doesn’t want her to become spoiled with this income and wants to know what to do with the earnings, and what would Dave recommend saving for a safe, reliable car when the time comes? Should she pay for that car with her own money?
ANSWER: I think the first thing to establish, of course, and I’m guessing by the way you’re asking this question that it’s an underlying thing, but for the sake of our listeners, while this is her money and 100% of your motivation is to do something good with this money for her, this has nothing to do with you making money. While that is in place, the thing you don’t want to do is give up the right to parent. You have the obligation to parent.
Let’s pretend this was $30,000–50,000 a month, which sometimes happens in your neighborhood. We call them child stars. What happens is it gets confusing for parents sometimes that they’re supposed to continue to parent—they think that they somehow lost their right because their kid was even outearning them, in some cases. You’ve got to do that, and I appreciate you asking those questions, and I think that’s what’s underlying your call, but I wanted to say that out loud.
How do we keep from causing this to ruin her versus a minimum-wage job? I don’t think it will. I think that’s got to do with your interaction with her—her work ethic, her attitude while she’s at work. She doesn’t become a prima donna and need blue M&M’s. She’s there to work. She’s there to earn and to serve and to be the best there is and to have a reputation of being a poised, confident, easy-to-work-with person. That’s her job whether she works at Burger King or she’s making $5,000 a month as a model. That job doesn’t change if she’s mine.
I want her to learn the lessons of people interaction, work ethic, showing up on time, having a good attitude. When you’re tired, tough! Suck it up and play through. You do that if you’re 14 and cutting grass. You do that if you’re 14 and making $5,000 a month as a model. It doesn’t change. We’re learning work ethic, people skills, and all of those things, the dollar amount really is irrelevant to that. You are still parenting through every bit of that.
What can she use her money for? I think you sit down with her and help her set some goals. Our kids had to pay for half of their car. They didn’t do as well as your daughter’s doing. If this was my daughter, she’d probably be paying for her car. That would be one thing she’d be saving for.
I think it’s very important that the car purchase is very moderate because the most important thing this kid could do with $20,000 or $30,000 or $40,000 is get through college. We start looking at this being her way to go to college. If she saves $50,000 for college and then gets a full scholarship and comes out of college, she’s got $50,000. That’s not a bad thing. Just because we saved it for college doesn’t mean we can’t get a scholarship, and just because we might get a scholarship doesn’t mean we buy a Lamborghini. We don’t trade cars for education. You drive a junk car and get the education if you have to choose, and I don’t think she has to choose.
A $5,000 or $10,000 paid-for car is more than in order here. Then saving aggressively for her to go to college to ensure that she goes to college without student loans in case there’s no scholarship would be my next goal. Those are the goals I would guide her into, and I’d guide her into them because I’d say, “Hey, here’s our budget. We’re not going to be able to do a lot for your college. And in case you didn’t get a scholarship, you need to be prepared, and we’re going to help you use this money to get prepared.”
Other than that, the four things we always want to teach kids with money—and you can weave these into this situation as well; it doesn’t change because of the numbers—is we first want to teach them to work, which we’ve already talked about. We want to teach them to save, and we’ve talked about that. We always want to teach them to give. There always needs to be some giving. And there needs to be some spending that’s wise. A percentage of every dollar should be given. A percentage of every dollar should be spent and enjoyed as a return on the work, and a percentage of every dollar should be saved for probably first the car and second for college. That’s kind of how I would lay it out, but I would talk that through with her.
I kind of helped my kids have the illusion some of this stuff was their idea. I would keep talking about it until they said something smart, and then I would point at them and tell them how smart they are. Then they would go, “Oh, yeah, that’s what I’m going to do now.” I wanted them at 14 to feel the weight and the decision-making process to have an ownership of the ideas.
If people go into Idiot Land, they destroy their kids with these things. But if you can maintain the position of parenthood and not surrender that and say, “Okay, what we’re looking for through all of this is teachable moments.” … I’ve got to tell you, when she’s 44, nobody will give a rip that she was a model when she was 14. Not a soul on the planet will know except her mom, and we’ll all laugh about the pictures when she’s 44. The most important thing here is the lessons that get learned—not the modeling and not the money.