How to Teach Your Teen Financial Responsibility When They Start Driving

There are all sorts of expenses that parents have to endure once their teens start to drive. To ease the strain of your teen’s driving on your own budget, use this time as an opportunity for teaching. Many teens can contribute financially to help cover these costs with a parent’s guidance. Here’s how to teach your teen financial responsibility when they’re ready to start driving.

Help Them Create a Budget

It’s not uncommon for teens to have a job or to get some sort of allowance. When they start driving, they should use some of their money to pay for things like gas and maintenance. This is why it’s important for parents to teach their teens how to create a budget that has categories for these items. This will allow them to see how they should be spending their money, and they can use what they learn about budgeting throughout their life.

Make Them Pay for the Car They Want

Many teens want their own car when they start driving, and often parents will buy their teen a car or give them an older family car. However, if you want to teach their teen financial responsibility, it’s imperative that you make the teen pay for the car that they want. Cars are a huge investment, and teens are more likely to take care of their car if they contribute financially towards it.

Have Them Help You Look for Cheap Auto Insurance

Drivers under the age of 25 are going to have higher car insurance premiums than more experienced drivers. It can be difficult to find affordable insurance for new drivers. However, many parents are able to find cheap auto insurance by doing a little bit of searching. Parents can give their teens a lesson in financial responsibility by having them help search for inexpensive auto insurance as well. This will give them the opportunity to learn about the different types of automobile coverage available and the factors that influence how much the coverage will cost. If your teen has regular income, you can also have them contribute to the car insurance.

Get Them to Open Up a Savings Account for Car Repairs

If you own a car, it will inevitably need repairs at some point. Parents need to talk to their teen about preparing for this eventuality. One way to prepare your teen is to have them open up a savings account that they can use for car repairs. While they may not want to save this money in the beginning, they will be happy they did when their car is in need of a repair.

If you have a teen who is about to start driving, there are some things that you can do to teach them about the financial responsibility tied to this milestone. This will allow them to really understand how much it costs to own and drive a car and to ensure that they have enough money to pay for regular expenses, maintenance, and repairs.

By Anita Ginsburg

Anita is a freelance writer from Denver, CO. She studied at Colorado State University, and now writes articles about health, business, family and finance. A mother of two, she enjoys traveling with her family whenever she isn’t writing. You can follow her on Twitter @anitaginsburg.