For parents, getting their teen their first car is a joyful moment, but financial expert Dave Ramsey says it’s not the greatest long-term idea.
Ramsey believes that when parents buy cars for their kids, it can create unrealistic expectations about money. Instead of seeing a car as something they have to work for, teens often start assuming big purchases should just be handed to them. That's why Ramsey suggests they should buy their own cars—though parents can still help in a way that teaches responsibility.
Don't Miss:
- If You're Age 35, 50, or 60: Here’s How Much You Should Have Saved Vs. Invested By Now
- The average American couple has saved this much money for retirement — How do you compare?
On X, Ramsey explained, "When you buy new cars for teenagers, you’re setting them up for a life of ridiculous expectations. Think about their future." In other words, if they don't have to work for their first big purchase, they might struggle to understand the value of money later on.
He advises parents to encourage their kids to work, save, and learn how to make a major purchase on their own. This approach helps teens build important financial skills, like budgeting and understanding the rewards of hard work.
That doesn't mean parents can't support their kids at all. Ramsey suggests a compromise: "If you have enough cash, you and your child could agree on a matching plan to help buy the car."
Trending: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — you can become an investor for $0.80 per share today.
This method still provides help, but it ensures that teens put in the effort instead of expecting everything to be given to them. It also makes them more aware of what things actually cost.
On the other hand, when teens save up for their own car, they learn smart money habits that can help them for the rest of their lives. As young adults get older, they can avoid debt and develop financial stability by learning how to budget, postpone gratification, and make wise financial decisions. In the long run, these experiences make kids more independent and responsible by increasing their confidence in managing money.
Helping kids figure out how to earn money on their own is an essential part of this strategy. According to Ramsey, kids now have more options than ever before for making money, including part-time jobs, freelancing, and even launching their own small businesses. So, in the long run, having your teen buy their own car is a great lesson.
Disclaimer: Some elements of this story were previously reported by Benzinga and it has been updated.
Read Next:
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
