It can always be tempting to help out our children. Whether that means buying them an ice-cream when you are at the park together or paying for their first home, this will all depend on your income level and what you can afford to give them. However, lets assume that you decide that you would like to apply for a loan to buy them a car. Is this a good idea?
Advantages of having a car
A car can be a very useful thing to possess. To start with it can improve your job prospects as it means that you can work anywhere. There are many places of work which do not have good transport links and this means that it is not possible to work there unless you have a car. This means that it could be crucial. Also, if your children do not live near to you, then giving them a car means that they have no excuse not to visit you. If they do live with you then you might be able to get lifts off them when they are using the car, if you do not drive, do not have your own car or want to save money.
Disadvantages of having a car
Running a car is expensive and even if you do not have to pay for the vehicle there is still the tax, insurance, fuel, MOT, serving, repairs and upkeep to pay for. So, unless you, as a parent, can afford this you will need to think about whether your gift is actually passing a big burden onto your children. They may end up struggling to pay for everything.
There are also environmental disadvantages of having a car. Even if you have an electric car it will still be more damaging to the environment than walking, cycling or taking some forms of public transport. This might be something that your children are aware of – as young people do seem more concerned about environmental issues and so this could be something that they will be worried about too.
Advantages of giving them things
Even if it is not a car that you decide to give your children but another gift, then there are advantages to helping them out. Obviously, as their parent, you will want to see them do well and helping them out in all sorts of ways can make you feel like you are really doing a good thing for them. It can feel good to be generous and give them things. They may not have a lot of money and you may be able to afford things that they cannot and co it can feel good to do this. You may also see it as a way of giving them their inheritance early. You might want to watch them enjoy the money rather than not being able to see them enjoy it. Giving it away earlier will also mean that they will not have to pay inheritance tax on it.
Disadvantages of giving them things
However, nice it can be to help out, there can sometimes be problems with giving things to your children. If they expect you to give them things regularly then it might mean that they do not learn how to handle their money so well. They may feel that it does not matter if they get themselves into a financial hole as someone will be there to bail them out. Of course, the money will not last forever and so it could be good to make sure that they learn how to manage financially before this happens.
You should also be careful to make sure that you will not need the money for yourself. You will not know whether you might need long term health care as you get older. If you do, then this will come at a cost. There is a certain amount available for free, but this tends to mean that there is no choice as to what care you get and it might not always remain free as social care is already putting a big strain on governments budgets. Therefore, it could be sensible to plan carefully for your own financial future as well as that of your children.
So, the decision to buy your children a car or give them anything at all is certainly not a simple one. You will need to think carefully about what impact giving them money will have on them. You also need to think about whether a car is the right thing to give to them. It is a big decision and something that you will need to think carefully about but also that you might want to discuss in detail with your children before doing it. You need to be sure that it really is the right decision for all of you.