With the new year quickly approaching, this is an ideal time to set goals for your family’s financial growth in the coming year. Including your children in these discussions not only fosters inclusivity amongst all family members, but this goal-setting exercise can teach them many important financial lessons too.
Regardless of your family’s current financial state, it is important to reevaluate your financial goals for giving, saving and investing on an annual basis. Conducting this goal-planning exercise also provides a great opportunity to discuss the importance of the order of money (give, save, invest and spend) and the reasoning behind many of your family’s financial choices.
To foster collaboration amongst your entire family, it’s important to get your children deeply involved in these decisions. By having a voice in this decision-making process, your children will have a deeper sense of purpose and connection as to how your household’s earnings are used to further your goals as a family. It’s imperative to find ways for children of all ages to contribute to this family financial goal-setting discussion, as it’s never too early to start teaching your children financial literacy lessons that will lay the groundwork for their future financial behaviors.
A recent study from Cambridge University found that by age 7, most financial habits have been formed. This is another compelling reason why it’s more important than ever for parents to integrate financial literacy into children’s everyday education.
Older children can help to determine your family’s giving, saving and investing goals by discussing how to best distribute the family’s earnings across that order of money. Even decisions such as determining which charities you should contribute to as a family in the coming year are beneficial to review together as a family, as your children may have strong feelings about which causes they would like to see money donated to in the upcoming year.
However, irrespective of age, it is important to find ways to include all children.
Another activity parents can implement is encouraging individual members of the family, including children, to set their own financial goals. Children should be taught that some goals may take upwards a year to achieve unless they can find creative ways to generate additional income. For example, you can encourage children to complete chores outside of their normal household responsibilities for an opportunity to generate extra money. Whatever they may choose, let their goals be something that stretches them.
It is also important when we set financial goals to teach children the importance of saving. This should be a large part of any family’s financial planning, as well as for children. Parents should teach children the importance of saving money for the sake of saving. There shouldn’t be a “spending goal,” as in saving money to buy something, as then nothing was ever really saved at all.
Furthermore, when we instill the habit of working towards a long-term goal in our children, we teach them to value the journey as much as the joy that results from it. By knowing that the choices made today will bring joy tomorrow, they will experience joy in the present moment for making these decisions what will bring happiness to the entire family in the future. By setting financial goals, children can experience that same joy and learn to value the journey just as much as the outcome.
To learn more about how families can teach children valuable financial lessons, please click here to learn more about my complimentary workshop, Raising Financially Fit Families, which I present to groups and organizations of all sizes.
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