Whether you’re planning to send your child to college, want to buy a house, or want to go an unforgettable family vacation, setting family savings goals is important. Doing so allows you to reach your goals faster with everyone’s input and efforts, and teaches your children valuable money lessons along the way.
How do we get started?
A great way to get started on your family savings goals is to initiate regularly family money meetings. These should be age-appropriate for your children, and separate from any discussions you and your spouse have about managing your finances.
At these meetings—which you can hold weekly or monthly depending on your family’s schedule—you can start by asking everyone what their goals are. Your sixteen-year-old might want to buy a car. Your five-year-old might want to go to Disney World. You and your spouse might want to start setting money aside for their college education.
Once everyone’s individual goals are heard, you can pose the question: What goal can we work on together?
Maybe the sixteen-year-old isn’t psyched to go see Mickey and Minnie, but they would be interested in visiting some Gulf Coast beaches. The little one wouldn’t mind spending some time in cerulean blue water, either, and your spouse can get behind sipping mojitos in the fine, white sand.
So you set a family trip to Florida as a family savings goal. You spend some time calculating the numbers, log your goal in an app like Tomorrow so you can keep track of your progress, and present all the info at your next family meeting.
Keeping Track of Progress
At your next family meeting, you’ll need to not only let everyone know the numbers, but you’ll also need to set up benchmarks for when you want achieve them. You’ve calculated that after rewards points and traveling during shoulder season, your costs should come in around $5,000 for the entire extravaganza. You’re confident that as a team, you can reach your goal in one year.
You and your spouse will obviously be footing the bulk of the bill, but your teenager decides they’re willing to pitch in 25% of their income from their part-time job. Your younger child is so excited they offer to pitch in 100% of their allowance. But you know they also will want to have spending money while you’re away, so you talk them down to 50%.
You figure that you need to save $416/month to reach your goal. Given everyone’s contributions, this seems reasonable. You track your progress as you go, preparing the information for the next family meeting.
Subsequent Family Money Meetings
At every subsequent meeting, you look at where you want to be with your savings goal versus where you are. If you’re on track, great!
But if you’re lagging a little behind, these regular meetings can help you course correct and avoid disappointment down the road. You offer to pick up a couple shifts at work. Your teen says they could delve back into babysitting again to help reach your goal. Your spouse and youngest child decide to enter the community bake fair to raise some extra cash.
These little things add up, and get you back on track so you won’t have to delay your trip.
After a year of dutiful meetings and tracking your progress, the day finally comes: you hit your $5,000 goal. You book hotels and plane tickets, book a car rental, and prepare all of your exciting news for the next family meeting.
At the meeting, take some time to celebrate. Congratulate and commend your kids for all the effort and sacrifice they put in to make this happen. Ask them what the top things they want to do while you’re away are, and bust out the laptop or cast your phone screen to the TV so you can all work together on the final details. This helps build the excitement, and teaches your children that achieving their goals really is possible.
Side Benefits of Setting Family Money Goals
Aside from working together towards something you all really want, setting financial goals as a family comes with some great side benefits.
For one, it can encourage your children to learn self-discipline with their money. While they may typically blow through their cash without giving it a second thought, consciously setting aside 25% or 50%--or whatever you decide the percentage will be--prepares them for building an emergency fund or saving for retirement when they’re an adult. It’s a skill they’ll use their entire lives.
It can also help deter tantrums when you don’t buy them what they want. That LEGO set may be the most fantastic thing they’ve ever seen, but when you remind them that it’s the LEGO set or Disney/Sanibel, they are more likely to accept the logic and move on.
Ultimately, setting family goals isn’t just about getting what you want in the here and now; it’s about teaching your kids financial discipline they will benefit from for the rest of their lives.