With most big purchases, there is an emotional side and a rational side. You might be excited about the purchase, and still need to consider the financial side of things carefully and calmly.
Some topics may be sensitive for your family. Keep in mind that children absorb much more than the words you say—they’re aware of your moods and attitudes too. Start a conversation when you sense it can be productive and comfortable.
For young children (ages 3-5)
Below are ideas for how to approach a conversation. For young children, conversations don’t always need to be about dollars and cents—instead, you can help them build the self-control, planning, and problem-solving skills they’ll need as adults. You can also try to work into the conversation other skills that your young child can work on, like practicing counting, waiting for what they want, thinking flexibly, and staying focused. See more about milestones your young child is reaching and how to help them.
Ask your child to imagine what might happen if you didn’t have a car. Imagine other ways you might get around, on foot, by bus, by train, by skateboard, by rocket ship—as many ways as you can imagine. Draw pictures or tell stories.
Ask your child what kind of transportation, real or imaginary, they would choose for themselves. Make a list of things that describe that form of transportation—for example, what color it is, how fast it goes, how often it needs repairs, how much it costs—and divide them into two groups: preferences and requirements.
For school-age children to preteens (ages 6–12)
Below are ideas for how to approach a conversation. At this age, your child can build habits, values, and rules of thumb to support future financial well-being. You can try to work into the conversation other ideas that are appropriate for your preteen, like how to help them fit their experiences into the world around them, establish a system of values, resist peer pressure, and build automatic habits. See more about milestones your preteen is reaching and how to help them.
As you shop, reinforce with your preteen the total cost of car ownership: not just the price of the car, but the continuing costs you pay for insurance, gas, repairs, parking, and more. You don’t need to include dollars and cents in this conversation unless your child is interested in working it out.
If you are borrowing money for the car, talk to your preteen about how to factor loans into a budget. Talk about the cost of the loan as part of the total cost of the car. If you are leasing, talk about the total cost of the lease, whether you plan to buy the car at the end of the lease, and how to factor that into a budget.
For teenagers and young adults
Below are ideas for how to approach a conversation. You can also try to work into the conversation other ways your teenager can practice money skills, like doing their own research, comparison, and decision making. See more about milestones your teenager is reaching and how to help them.
Comparing auto features and options is one step in shopping for a new car, and also can introduce an opportunity to talk about shopping for payment and loan options. Our helps you comparison shop for loan terms and guides you through the various options.
You can start by gathering readily available numbers—you can use the worksheet to compare cars that your teen is interested in or advertisements your teen has seen. If you prefer, you can set up the worksheet with hypothetical prices, interest rates, and car features. You can even use the worksheet to illustrate the difference between borrowing money to buy a car and paying the full price in cash.