Buying your teenager a new car might feel like a generous and proud parenting moment, but personal finance expert Dave Ramsey says it could do more harm than good.
“The best thing to do for your kids is have them buy their own cars,” Ramsey wrote in a post on X, warning parents that buying brand-new vehicles for teenagers can “set them up for a life of ridiculous expectations” and to “think about their future.”
Let Kids Work And Save For It
Still, Ramsey acknowledges that some parents are in a position to help. In that case, he suggests a compromise: “If you have enough cash set aside, you and your child could agree on a matching plan.”
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Ramsey believes that kids should experience the value of money firsthand. “Money comes from work, not from other people, the government, or dumb luck,” he said in another post. That’s why he and his wife paid their kids commissions instead of allowances. “You work; you get paid. You don’t work; you don’t get paid,” he said. “It’s true for parents, and it should be true for kids.”
He says the lessons don’t stop at working. Kids should learn how to save, spend, and give responsibly, too.
“If they learn how (and why) to save up for a Barbie today, they’ll know how (and why) to save up for a car or house tomorrow with no debt,” Ramsey said.
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Letting kids experience the satisfaction of spending money they earned is also important. “Let your kids have some fun with their money and experience the awesome feeling of buying something they want with money they saved,” Ramsey said. Otherwise, he warns, “they’ll either grow up into miserable old misers or they’ll rebel and become crazy, debt-ridden spenders once they hit college.”
Finally, he emphasized the importance of teaching generosity early on. “Giving is the most fun you can have with your money,” he said. But he added that kids should give their own money: “If you hand Junior a quarter to drop in the offering plate… he’s just a courier. He needs to know what it feels like to really give out of his own pocket.”
Ramsey says learning these four habits—work, save, spend, and give—”brings your kids a depth of confidence and character they’ll never have otherwise.”
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