Here's the question: When your kid started driving, how did you share the expenses?
Here's the issue: Fair disclosure if you're planning an Oahu trip-- our kid is eligible for her learner's permit on 1 May 2008.
Here's the long-winded discussion:
She'll be learning to drive our 1994 Ford Taurus wagon (two tons of decaying plastic, 110K miles, an automatic transmission, and anti-lock brakes). Its days are numbered and it may not survive her efforts, so this summer we're buying a
Nords engineering project
used 2004-07 Prius. Those decisions are family consensus and we're not planning to change them.
Those decisions are also part of her financial education. On her 8th birthday we started a "Kid 401(k)" to show her how a few dollars a week (with employer's matching funds) and a lot of deferred gratification could compound to a big payoff. She's watched it grow (for nearly half her life!) and it'll hit $5000 on her 16th birthday. The idea was that she could use it to buy her own island beater and pay for her own gas/insurance, or she could borrow a parent's ride while investing her money for college expenses.
Well, the Law of Unintended Consequences has kicked in. She wants to have our cake and eat it too, and she's proposed buying an equity share of our Prius. She wants to pay for her insurance and gas while having first claim to the car and then, 18 months later when she goes to a Mainland college, she'll sell back her share for $5000 to save toward her next clunker.
We're thrilled at her initiative and we'd like to reward this proposal just for its original thinking, let alone for all the other problems it solves:
- We want her to go to a Mainland school to
learn for herself how Hawaii is better than winter
finish establishing her independence, and Hawaii kids rarely take their cars to college (Mainland shipping is over $1000). $5000 in her pocket is a great incentive to avoid the UH "safety school" default.
- Her share would give her driving rights, and of course she'll try to take over the car. But we want
her to drive (because Hawaii drivers don't get enough practice for the Mainland) and we can use her selfishness for running errands, doing the grocery shopping, and relieving us of other driving chores.
- If she wants to do the majority of the driving then she's gonna have to graduate from Dad's school of auto maintenance.
- She won't have to learn how to drive a stick shift-- unless she wants to.
- Any ride-pimping is her own expense (she has a part-time job and can do the $8.50/hour math).
We want to sidestep the argument about who's buying gas. (Dad: "You drove the car." Kid: "Yeah, but I was buying groceries!" D: "You ate
most of them." K: "Yeah, but I don't have time to buy & cook my own food!" D: "Oho, we can fix that..." etc.) We also want her to realize how monthly expenses pile up and to learn how to manage money. Our thought was to build on her clothing/toiletries budget by adding a gas budget of $50/month. (Our Quicken records for two drivers are roughly $100-$150/month.) Since we'd almost never be driving the Prius anyway, she'd be on the hook for the vast majority of the fillups.
We'll be getting USAA's quote, although she's required to take driver's ed and she has good grades. Hawaii restricts under-18 night driving and passengers so we hope to avoid most of the party-car issues. She can afford to buy extra gas and her share of maintenance/repairs. Of course she'll sign a family driving contract and she'll see the article
about the mom who sold the "son's" car when he broke the rules.
What worked for your young drivers? What are we missing? Any ideas on how to improve our system?