Friday

Saving Is Good

Teaching our kids about saving is extremely important and can't go underestimated.

It isn't very long before our kids go from asking for legos to asking for a car.  They do grow up fast.

Besides college, one of the biggest expenses kids will have is car.  College is a different subject addressed in a different article.

The best way to instill some money management and responsibility in your 16 year old is to have them pay for their own wheels.  However the reality is that what they may be able to afford may not be the safest, most fuel efficient car on the road.

The compromise is this and it depends on your ability to help out.  As they save, make a deal that you will kick in 1X, 2X, 3X whatever they save.  This gives them an incentive to save.

Open up a separate bank or brokerage account (I like fidelity) and set it aside for the eventual car purchase.  This gives them the visual picture of saving and money management skills.

Its hard to start this account too early and kids start talking about wheels about age 9-10 so that's an ideal time to get started.

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