Ahh…sweet sixteen! An exciting time for kids – not so much for parents. Of course every kid dreams of opening up their gift to find the keys to a brand new ride. While many parents wish they could honor that dream, few have the resources to do just that. Planning for the time your children will start driving can help ease the financial burden.

Here are some ways to help combat the teen car buying saga that may one day infect your household on a daily basis.

Buy Used

Some may argue that buying a car for a teenager refuses them the opportunity to learn about money, savings, and working towards goals. However, for many parents, there is a sentimental value in buying their child’s first car. Buy a quality used car and kids can learn to work towards saving for a better model or the car of their dreams for the parents who are in a position to buy them a car.

If you have had a savings plan in place for just this occasion, put your money where your research is. Check out Consumer Reports for the ratings on vehicles in your price range. Look and compare used vehicles online to be well-informed before stepping foot on the lot. Have the car you choose checked out by a trusted mechanic before making a commitment.

Create a Contract

This is an excellent opportunity for parents to teach their kids about money and responsibilities in the adult world. Developing and implementing a plan to have your child share all of the expenses of getting a car is a good way to save money and teach a lesson or two. Calculate on paper the cost of operating the car, maintenance, gas, insurance, and repairs to share with your child. Then divide the costs in half. A teenager is capable of working several hours a week and should be expected to live up to the contract in order to keep the car. This will help train your child to manage their finances at a young age and give them a better understanding of the need for budgeting.

Match Their Money

If purchasing the car is a financial strain, opt to match the contribution of your child. Make an agreement and set a timeline to give you both a chance to save the most money. Match your child’s money dollar for dollar. Teens who have jobs can also be encourage to find their entrepreneurial spirit in order to maximize their contribution, thus getting a large selection of vehicles to choose from.

Car Buying For Your Teen was created by and is property of American Consumer News.

Here is what I learned…maybe a little too late.

Don’t Neglect Health Coverage Analysis

If you and your spouse have been fairly settled at work for a long period of time, it may not come to mind that you should take some time to review your plans. This is especially true if you recently married. See which plan is most beneficial and cost-effective to your family needs, especially if you have or are planning to have a growing family.

When Baby Comes Keep It Simple

Despite the pandemonium that ensues when a new baby is due to arrive, it is wiser to keep things simple from the beginning. I support this idea fully and was very practical, often annoyingly so. In the end, it was well worth it financially speaking. Not everything must come from a just-for-baby store and the same items can be found elsewhere for considerably less. Keep in mind that babies do not stay little for long and will outgrow clothing and toys faster than you can sometimes pay for them.

Don’t Do a Trade

When you are ready to buy a new car, you should prepare in advance. From knowing the type of vehicle will be most efficient for you to the amount of money you can afford to spend, you should walk into a showroom utterly prepared and stick to your guns. Additionally, you should not trade in your old car during the deal. Instead, sell it on your own for cash.

Homeownership Is Not a Requirement

While back in the day and in the years to follow, there has been a perception if you do not own a home, you are not doing things right. The reality is, especially in today’s economy, that a mortgage can be a huge burden if you are not absolutely ready. In addition to the mortgage, closing costs, and other fees associated with buying a house, there are also considerations of insurance, taxes, furniture, utilities, repairs, maintenance, and a ton of other things to consider. Taking on too much too soon can be a financial disaster. Interestingly, I also read an article about a family’s decision to rent as opposed to owning in order to enjoy life, travel, and provide a more financially capable way of life.

Money Lessons for Generation X was created by and is property of American Consumer News.