Teenagers, Money and Cars can be a difficult subject for parents. Upon reflecting on what we did well and not so well as parents, I’d like to share some tidbits that might prove helpful to other parents who also will be facing such issues, whether it be this year or years from now.
Our older son turned 16 early in the year. After completing his driver’s education, he was ready for his own car. There were several strategies that were at play in the process of him purchasing a car and now maintaining it. I’d like to share those today.
Split the Purchase Cost of the Car
When our son was about 14, my wife and I informed our son that we would not be buying him a car in full. This came to him as a bit of a shock as parents of his friends at school did buy their kids cars, without the kid having to pay anything.
Now allow me to insert one note here; something I have learned over the years is that it is important not to be legalistic when it comes to parenting ideas. Personalities and circumstances may vary widely. What works well in one household with all the different personalities and history together might not work well in another. So the strategy I am sharing may work well in your family, or it may need to be tweaked a bit. Likewise it might not work at all, so please consider your situation. In our judgment, given our child’s temperament, our family dynamics, our current financial situation and our observation of how our society tends to promote an entitlement mentality already, we thought it best to split the cost. We felt that if we were to buy our son a car in full then we would be promoting the same entitlement mentality that is so rampant already and in our situation that would not be healthy. But if we required him to pay the full amount, it would seem unachievable because of the amount needed. So we informed our son that we would split the cost of his eventual car, with the following breakdown being how the split would occur.
We as parents would pay 2/3 of the purchase cost and our son would pay 1/3 up to $5,000. If a vehicle was more expensive than $5,000 then we would each pay ½ beyond the $5,000. Also we would not be getting a loan for the car. We would need to pay in full for the purchase.
Now here is something we didn’t do well. I wish we would have informed our son earlier of our splitting the cost and then require that all expenses, including the purchase cost, would be split 50-50. But since we informed him when he was about 14, while we felt that we needed to require him to pay for part of it, we didn’t want the amount needed to feel overwhelming, given the shorter time span before the car would be purchased. I did set the 50-50 split for anything over $5,000 because his younger brother, who is a saver, will be working for several years longer to save money for his vehicle and I really don’t want to have to come up with 2/3 of the cost for a $15,000 vehicle, based upon how much I think he might save.
Split Other Costs as Well
I told our son that we, his parents, would pay for his insurance, but he would pay for the gasoline. I have seen a significant decrease in how much he drives his car verses how much he drove our car when we were footing the gas bill.
Concerning maintenance and repairs, we split the costs 50-50. If a repair is needed and he does not have cash on hand to pay for his half then the car will have to sit until he has the money. We can provide him transportation or even let him borrow one of our vehicles, but he will have to work with our schedules as well. These are life lessons that are needed before moving out on his own. But with us providing funds for half the cost, this softens the blow for him so that money can be saved to address potential problems in a more timely way.
Since our son has to pay for his own gas, he is seeing how much it costs for fuel. Since he has to pay ½ of all repairs he should be less prone to peel out and wear away the tires’ tread too quickly. Having to split the cost on a set of $500 tires is a motivator to drive more gingerly. If tires do need to be replaced soon, then I suspect the lesson will be learned as it is hard for anyone to fork over hundreds of dollars for tires, but especially for a young man.
While I told our son that we would pay for insurance, there is a catch. If the insurance increases due to his driving habits or academic performance, then he may have to pay for part or even all of the increases. Our insurance is with State Farm and there are issues that would lead to increases. If he receives a ticket or is in a wreck then the premium will probably go up. Likewise he currently receives a good student discount, but if his grades drop, the insurance would increase. Now this is one area that is a bit vague for us as I am unsure how much the increases could be potentially. While I would want him to experience the consequence of an insurance increase, I don’t want to sap the vast majority of his income either, unless his driving behavior warrants stronger requirements. So this is something with which we will address as needed, but for now, he does know that such increases in an insurance premium will likely affect his pocketbook in some way.
Because of our requirements, and because our son really wanted his own wheels, he got a part-time job this summer and continues to work part-time during the school year. The changes have been significant because of this. Just a year ago our son wanted a new Lamborghini and expected me to buy it. Now he is okay with driving a twelve year old SUV with a busted console, although he would prefer a new Camaro. A year ago, our son looked to my wife and myself to buy what he wanted. Now he quickly assumes that if he wants something he needs to make the money to buy it. That is a big shift.
Now, just for the sake of clarity, my wife and I seek to provide everything our sons need–that is every need we as fallible human parents are capable of meeting. We give them love, share faith and provide good food, nice clothing, a safe home and an education. However, we do not provide everything they might possibly want and that is where their working comes into play. One of our goals is for our children to eventually become responsible adults, and steps toward that goal begin in childhood, but such steps are particularly important during the teen years.
Note: I feel that an article such as this can give the impression that our strategy was simple to employ; that isn’t necessarily true. Much discussion, explaining and some tweaking occurred as we developed our strategy and visited with our son about it.
Frequently, in our household at least, our parenting is not some neat and tidy process. While parenting is a blessing, it is also an opportunity to be stretched, to grow, to make mistakes, to ask forgiveness and to try again. I have thought on multiple occasions that much of good parenting comes down to two values: (1.) to be there for your kids and (2.) to try. When it comes to teenagers, money and cars we must try to do what is best and it can be a bit trying at times as well. Such is quite normal!
Recent post: If you haven’t checked it already then see my recent post, A Money Saving Strategy for Medical Bills, where I show how we saved $220.00 or 30% on a recent medical bill as a result of a 5 minute phone call.
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photo credit: Alexander Nie, Huracán, 2015 Lamborghini Huracán via Flickr cc License – 10/22/15 with no changes