Ah, the thrill of raising a teenager. After more than a decade of navigating their early childhood and middle school years, you get to take a deep breath because they’re finally easy to deal with, they’re self-sufficient, and all the hard work is basically behind you. Right?
Wrong! We all know that’s a load of garbage.
Parenting a teenager comes with a ton of challenges, and one of them is deciding how to handle the C-word: car. One of the biggest questions you’ve likely asked yourself is, Should my teenager buy their own car or should I buy a car for them? Lots of parents struggle with that one, but there is a right answer.
Let’s walk through it together.
Why Your Teen Should Buy Their Own Car
When it comes down to it, you shouldn’t buy a car for your teenager. Instead, let them save up and buy one on their own.
If your teenager’s reading this along with you, they just checked out, right? We’re like that mean, grumpy old man who shakes his fist and yells at kids to “get off my lawn!” To them, we’re a bunch of tyrants. You may think so too.
Hear real-life parenting advice on The Dr. John Delony Show. Listen now.
But if you let your teenager work, save up and buy a car for themselves, you’ll be giving them a tremendous gift. Seriously. Best of all, you can absolutely still help pay for it—just not too much (more on that later).
Your Teenager Will Learn Priceless Money Skills
We suck at saving money in America. Like, so badly that 45% of us don’t have enough saved to cover a $1,000 emergency, according to a study done by Ramsey Solutions. Yikes.
Why are we so bad at saving money? Probably because most of us have never done it before. Here’s the thing: Personal finance is 80% behavior and only 20% head knowledge. So even though our brains know we need to save money, we still don’t do it, because we haven’t built the behaviors that lead to saving money.
That’s why letting your teenager save money to buy a car on their own is such a good idea. By giving them the chance to actually do the hard work of earning and saving money—not just learn about it—you’ll teach them a priceless lesson about handling money that, honestly, could change the course of their whole life.
If you straight up buy a car for your teenager instead of letting them work and save for it, you’ll set them up to think they’ll always have some magical money fairy who’ll swoop in and save the day whenever they get in a bind with money.
Look—someone is going to teach your kids what to do with money. So you need to decide right now whether that someone will be you or some 20-year-old “investor” on TikTok who can’t grow facial hair.
How to Help Your Teenager Buy Their Own Car
Just because your teen needs to buy their own car doesn’t mean you can’t help! Don’t pitch in too much, though, or you’ll defeat the purpose—they still need to experience the blessings that go along with the hard work of saving.
Use the Match Plan
The best way to help your kid and still avoid fairy status is to use a match system for their car savings. For every dollar your child saves for a car, you can contribute by matching that dollar. Or if you don’t want to offer a one-for-one match, you could match, say, 50% of what your child saves. Go with whatever you feel most comfortable with—and fits in your budget.
By offering a match, you’ll keep your kid motivated to pile up cash. That’s because they’ll know they’ve still got to put in the work if they want your help.
If you do use the match plan, it’s a good idea to put a cap on how much you’re willing to match. Your child may wind up being a much better moneymaker than you could’ve ever dreamed, and you don’t want to go back on your word if you can’t afford to match the small fortune they piled up.
Why You Don’t Have to Help Your Teen Save for a Car
Now, the reality is that you may not be in a position to help your child out. You may be stretched thin as it is or working really hard to get out of debt, build an emergency fund or pay off your house early. You may even be prioritizing another money goal to help out your children, like saving and investing for them to go to college debt-free.
If that’s where you’re at, don’t sweat it. Take a deep breath and let it out. You’re still a good parent!
Here’s the deal: Your child isn’t entitled to your money. There’s no law from the government or anything in the Bible that says you have to help them buy a car. So do what’s best for your current situation, and please don’t feel guilty about it. You absolutely, 100% have not failed as a parent if you can’t (or just don’t) pitch in to help your child buy a car.
By the way, if you’re struggling with money, there’s no better way to get back on the right track than taking a Financial Peace University class.
How a 16-Year-Old Can Buy a Car
At this point, you may be thinking, All right, I think this is the right thing to do, but is it even possible for my 16-year-old to buy a car? Where are they supposed to get the money?
Those are good questions! Let’s answer them with some simple math (we’re talking third-grade stuff, here). The average fast food counter worker these days makes about $12.50 an hour.1 If your teenager works two hours in the afternoons during the school year—10 hours per week—at $12.50 an hour, they’ll have about $9,000 saved after two years. And that’s if they didn’t work a single hour over the summer!
If you’re using the match plan, that $9,000 will be enough for your child to buy a pretty sweet car at 16 or 17 years old. And even if you don’t match their savings, they’ll still be able to get a car worth $9,000 plus whatever they bring in during the summer—it’s not like they’re going to be driving some kind of beater that’s falling apart.
And your teenager doesn’t have to work in fast food to make this goal a reality. Encourage them to think outside the box—there are more ways to make money as a kid than flopping Whoppers or bagging groceries. Babysitting, mowing lawns, walking dogs and washing cars are all great ways for high schoolers to earn money for a car.
Set Your Teenager Up to Win With Money Down the Road
Learning the behaviors of earning, saving and spending money wisely at such a young age will put your teen way ahead of the game. They’ll go into adulthood prepared to handle money well.
If you want our full playbook on how to raise kids to be confident adults who know how to win with money, pick up a copy of Smart Money, Smart Kids. Bestselling authors Dave Ramsey and Rachel Cruze will help you make a plan to raise awesome, independent kids and change your family tree when it comes to money. You can buy it now as a hardcover, audiobook or e-book!
And if you’re looking a deeper dive designed to help your teen learn about handling money the right way, check out our Foundations in Personal Finance homeschool curriculum. It’s the money course you wish you’d had when you were in high school!