When I had my first daughter I wanted to give her the world. I immediately started thinking of things like her college education and the day she’d be driving age.
I know the power of saving little amounts over the long run produces dynamic results, so I started to think about how I could painlessly save for her college education and her first vehicle.
When my first daughter turned one I had my light bulb idea and came up with the way that I would painlessly save for a car for her. A lot of other people I’ve told about this liked the idea too so here’s how it goes.
You save one dollar per week for every year you child is. (Example, you have a two year old so you put back two dollars per week. You have a fifteen year old so you put back 15 dollars per week.)
In theory the more time that goes by the more money you’ll be making. And, by adding only one dollar per week each year to the amount you save, the actually saving of the money should be quite painless.
Keep in mind though this will not be enough money to buy a brand new car. It will be enough money to buy a decent car. And, personally, I don’t think that young drivers should have brand new cars. They should have to prove their responsibility and start out with a reliable, used, and maybe not so flattering first car.
Here’s how this would work out if you saved from the time your child was 1 to 15:
|
Age |
Amount Per Week |
Amount Saved in a Year |
Total |
| 1 | 1 | 52 | 52 |
| 2 | 2 | 104 | 156 |
| 3 | 3 | 156 | 312 |
| 4 | 4 | 208 | 520 |
| 5 | 5 | 260 | 780 |
| 6 | 6 | 312 | 1092 |
| 7 | 7 | 364 | 1456 |
| 8 | 8 | 416 | 1872 |
| 9 | 9 | 468 | 2340 |
| 10 | 10 | 520 | 2860 |
| 11 | 11 | 572 | 3432 |
| 12 | 12 | 624 | 4074 |
| 13 | 13 | 676 | 4750 |
| 14 | 14 | 728 | 5478 |
| 15 | 15 | 780 | $6,258 |
That painless saving will net you with $6,258 by the time your child turns 16. An easy way to save right? And, you could use this method is so many other ways that just saving up to purchase a new car. If you’re living on a bare bones budget and feel like you have nothing to save, try starting with one dollar a week and build up momentum from there.
What do you guys think? If you’re a parent do you find yourself thinking of saving for your child’s future often?
I will be showing this post to my kids!
Dave Ramsey is always talking about an emergency fund. $20 a week would get you there in a year.
I am obsessed about saving for my daughter’s education. I don’t want her to graduate saddled with a huge debt. I’ve been going on the method a little bit every month since she was 2 years old. It’s starting to add up. I won’t be able to pay her whole education but I figure the money I will have saved will make a dent. Thankfully where I live people don’t usually buy kids cars when they get their license so its not something I have to worry about.
No teenager should ever have a new car so don’t feel bad about a low amount. Something to keep in mind too is, that if at the point your daughter is able to buy her card and she’d like to buy yours (perhaps at a small discount) it might be a win-win for both parties. I got a 10 year old car for free but if I had $6k and my mom’s car was a 5-year-old car in good shape and she was willing to part with it for that $6k, I’d be happy!
I’m a big buyer of family cars second hand and will probably do the same for my next car even though I’ll be in my 30s by then. 🙂
That’s indeed painless and overall a great strategy. Since our kid is 4 months old, you might have just found the first person to try this out. We’ll even get the chance to stretch it for a little longer since here in Romania we’re not allowed to have a driver’s license until we turn 18.