What To Buy for the Kids
A listener on Twitter asks if Dave is for or against buying a 16-year-old child their first car. Dave says both and explains why.
QUESTION: A listener on Twitter asks if Dave is for or against buying a 16-year-old child their first car. Dave says both and explains why.
ANSWER: Let me carefully say this: both. We told our children at a young age that we were not buying their first car. They had to save up and pay for it. We were doing well enough financially that we could match them. We called it 401 Dave. If you save up $3,000, we’ll match it with $3,000. I didn’t buy their first car, but I didn’t make them buy it either. I wanted them to have some blood, sweat and tears in it.
When they have some sweat in it, they drive the car differently. They keep it a little cleaner. They don’t let their friends drive it. It’s weird how it changes behavior when you are heavily invested in the process. If you give your 16-year-old a $30,000 car, you’re an idiot. They will tear it up and maybe hurt themselves in the process.
It’s good to have your child in a safe car, but some of you use this as a rationalization to do stupid stuff like buy a new car. Put your 16-year-old in a car that needs a name.
If you are willing to match, then here is something that I know through experience. Put a limit on it. My oldest daughter saved $4,500 and we matched it, and she bought a $9,000 car named Waldo. The second child went crazy with jobs and saved up $8,000. I matched it, and she bought a pretty nice, used BMW.
My third child is watching all this happening and is catching on. We honored our word to match, and he ended up with a $15,000 used Jeep. He gave some money to a ministry, and we matched both of those activities. We wanted to keep from putting a 16-year-old behind the wheel of a $25,000 car because that just violates common sense.
All of that encouraged work and thrift and saving and careful driving once they got there.