My nephew is 18 years old and drives a Mercedes Benz C class. First impressions may lead you to think that he is just another spoiled Southern California kid, but that is far from the truth, he purchased the car himself with money he saved. You’re now wondering how does an average 18-year-old fresh out of high school grades buy a luxury car? It’s easy, his parents taught him how to responsibly save money from the time he was born.
From his first Christmas, his parents created a simple rule: any gift money received went into the bank or invested into purchasing shares of stock until he was 16 years old. Year after year my nephew received toys, clothes, gift cards, and money for birthdays, Christmas, Easter, the tooth fairy, etc. Gift cards could be immediately spent, but all cash was put into the bank. During vacation, he could opt to use some of his money to buy souvenirs, but most of the time he chose not to. By his 16th birthday, through saving and profits from his stock market investments, my nephew had over $20,000 to his name, at the age of 24 I barely had $500.
He bought his first car, a used Toyota Tacoma with 210,000 miles for $3,000. He learned to change his own oil and perform basic maintenance to keep his the engine intact. Two years later, when his mom was looking to purchase a new car and trade in her Mercedez Benz, he decided to sell his truck and purchase her car. He was able to sell his truck for almost the same price he purchased it for two years prior and upgraded to a used 2004 Mercedez Benz with 60,000 miles for $8,600. He still has well over $12,000 in the bank as he gets ready to go off to college. Over the summer he gained his Emergency Medical Technician’s certificate and intends to work on an ambulance while attending university and intends to continue saving the majority of his money.
Anyone can become disciplined to save money and teach their children to do the same.
How about you readers? How do you teach your children good spending and saving habits?