Family Financial Goals that Make Everyone Happy
Personal financial goals are important, but family financial goals are, too. When it comes time to set your family financial goals, you may think it is better to do it on your own. If your kids are babies and you have no significant other, setting them on your own is fine. If your kids are at least five or so or you do have a significant other, it is a better idea to include them in the process.
For one thing, it is a lot easier to meet goals when your whole family is on board. My family and I are working to clean up credit and buy a bigger house. It is so much easier to tell my kids “No” to something they want when I can say, “That will take money away from us moving right now.” They want to move as badly- or possibly even more- than my husband and I do, so when they have to choose between a toy or video game and their new home, they almost always choose the home.
Also, setting financial goals and the work it takes to reach them is an excellent way to teach kids about money. It helps them learn to prioritize, say “No” to impulse purchases, and budget. Setting and reaching family goals is too important for the kids to be left out of. Below is a little more explanation of why.
Why Teaching Kids About Money Is Important
When you have kids, you send them off to school thinking that you are preparing them for adulthood. It is common to think that they will learn what they need in the public institution. Sadly, that is not the case. Sure, they will learn some very important things, but there are also a lot of important things missing.
Don’t believe me? When you graduated from high school, how prepared were you to be an adult? Were you able to handle all of your bills correctly? Did you know how to budget and stay out of debt? Did you know how to keep your credit score up, apply for a mortgage, purchase a car, and so on?
Most people I know can tell you that they were not prepared for this part of being an adult. Many were not ready to cook and clean, either. The question is why we think that these things are supposed to be taught in public school. Would it be nice if they were? Of course, it would, but school teaches them math, science, history, language, and other core subjects. Yes, there are a couple of classes that add in some adult topics, but not many.
We as parents have got to understand that some things our kids need to know will only be taught in-depth by parents. And we have got to make it a priority. Otherwise, our babies are going to grow up and not know what to do.
There is also a common thought that we should not openly discuss our finances with our kids or place that burden on them. Oh, I would absolutely love for my children to never have to face any type of financial hardship. The problem is that most adults do, so while I wish I did not have to introduce the struggle to them, if I don’t do it, someone has to. We have to be more open with our children about the struggles and equip them to handle them.
There is nothing wrong with letting your kids in on your financial situation, and we have got to do it. No, you do not have to share every little stress if you do not feel comfortable with that, but do not hide it all either. One of the best ways to do to help kids learn about personal finance without dragging them down is to set family financial goals and let them be involved in accomplishing them.
Ideas for Family Financial Goals
Your family financial goals should include a mix of things. Here are some common goals that you can make your own or use as inspiration for other goals:
Buy a home
Pay for kids’ college
Go on family vacations
Buy a second car
Move to a new city or state
Buy new furniture
Planning birthday parties or family get-togethers
Having an emergency fund
Having a new baby
Start a new business
Buy clothes and shoes
Buy a special toy
Purchase a new device, like a TV, tablet, or phone
Pay off debt
Live below your means
Pay for family fun night every month
You can probably tell by looking at these goals that kids are not going to care about some- or most- of them. That’s okay. You can still set the goals. Try to explain how the goals will benefit your kids, but do not be surprised or upset if they do not understand or even scoff at the idea. Some goals, even good financial goals, carry no meaning for them yet. Trust me, though, they will appreciate it when they need it. Also, be sure that whatever reward you set gives them something to look forward to, and they will still be motivated to accomplish it.
How to Set Family Financial Goals
There is no magical formula for setting goals, but there are some steps you can take to make it a little more effective. These steps also help ensure that the whole family is involved and working together.
Step 1: Call a Family Financial Goals Meeting
The first step should be to call a meeting. Explain to everyone that you are trying to set family financial goals and that you want to actually do it as a family. Explain what you mean by these goals and tell them you want everyone to help come up with goal ideas.
Be sure they understand that doing this can be beneficial to them as it might mean more allowance, moving, a family vacation, or something along those lines. At this meeting, do not get into the bread and butter. Just explain what you are doing so that everyone’s minds can start churning up ideas.
Step 2: Set a Date For Meeting Number 2
Before you break up the meeting, set a date for a second meeting where everyone will share their ideas for family financial goals. Wait a few days or a couple of weeks. Be sure everyone has time to really think about it.
Step 3: Have Your Second Family Financial Goals Meeting
At your second meeting, everyone gets to share ideas for what they think the goals should be. Do not discard anyone’s ideas. I know my kids have come up with some silly and illogical things and it can be easy to laugh them off. Don’t do that, though. They brought them up for a reason, so find out what that reason is.
I remember once that one of my kids said he thought we should all get purple shirts with our last name and a goofy graphic on them. When I asked why, he said it was so that it would be something fun to do as a family, if one of us got laughed at we would all get laughed at, and so that everyone would know we were a family. At the heart of it all, he just wanted more fun together and family unity. We never got those purple shirts, but we did change up some things in life that made him much happier.
The bottom line is to take everyone’s ideas seriously- even if one of your family members is a sarcastic teenager. Their thoughts stem from some inner desire. Just try to dig out that desire and you will discover ways to make them feel happy, too.
Step 4: Let Everyone Speak
Everyone should also be allowed to tell how they feel about each other’s goal ideas- within reason, of course. No one should be allowed to be rude to one another, but everyone should be allowed to speak.
Step 5: Choose Family Financial Goals- Short Term, Mid Term, and Long Term
From the goals your family has listed, you need to choose what you all want to work on. Discuss what each of these goals will take to accomplish and label them as short term, midterm, and long term financial goals.
Step 6: Prioritize Family Financial Goals
It is important that you prioritize these goals. You do not have to leave any of them off of your list, but you do need to be sure that you work to reach the most important ones first. The “important ones” will differ depending on your family and your financial situation. For instance, let’s say two families have the same two goals on their list: To pay off debt and to start having movie night once a month.
Family one is always on the go with work, extracurricular activities, taking care of ailing family members, and so on. They rarely get to sit down to eat together. For this family, making movie night a top priority would probably be better than paying off debt. It’s not that the debt is not important. It’s just that they need and want to spend more time together.
Family two has dinner as a family at least four times a week. They have already made family time a priority but they really want to buy a new home. For this family, paying off their debt is probably the number one priority.
Think about your family and your normal situation. Let everyone discuss what is most important to them. As the adults, you and your significant other have the final say, of course, but everyone should have the opportunity to chime in on how important they view the individual goals.
Step 7: Create a Plan
I’m going to start this section with words that I actually hate to hear: Be realistic. I really do hate these words- probably because when people have said them to me in the past, it sounded a lot like they were saying it was not possible. I, my friends, am what everyone refers to as a “hopeless optimistic” and described by my husband as “Little Miss all is right with the world and nothing can stop me”.
Both of those are possibly pretty accurate, but I simply believe that all things are possible. I believe that if I work and push hard enough, I can do anything and everything I want to do. And when someone tells me that something is impossible, my problem-solving brain goes into this “Oh, yes it is! I’ll figure it out!”
Having said all that, I hope you understand that when I say, “Be realistic,” I do not mean it is not possible. As I said, anything is possible. What I am learning is that while anything is possible if I push hard enough, maybe I should stop pushing myself so hard. When I push too hard, I end up sick and I miss time with my kids, so pushing too far too fast costs me.
So I say “Be realistic” to say you should really consider the time frame those goals should take. Sure, you can reach goals quicker if you pick up a second job, but is it worth it to you to miss that time with your family? If you are trying to buy a home and the mortgage is going to take every cent you have left after bills, is that worth going without a family movie night for the next 30 years?
The choice, of course, is up to you. However, be sure that you let your family in on that discussion. Some goals are much better to wait for than to miss your babies growing up- which they do all too soon. Before you set a plan for the timeframe in which you hope to accomplish your family financial goals, consider the cost. Then, dig in and make a step-by-step plan for how you can reach them.
Step 8: Set Up a Reward System
Sacrificing for something is hard to do when you only see the negative side of it. This is what makes a reward system so important. Determine milestones at which you will reward your family. The younger your kids are, the easier this is. Some stickers or a cookie and ice cream work for well for most kids five years old and younger.
My six year old still goes for these. My 11, 12 and 16 year olds usually go for ice cream and cookies, but pizza is great, too. Now and then, I have to get more creative for the older ones, but not too much. Even if you can get away with little stuff throughout the process, though, it is always a good idea to have a bigger reward to look forward to when you complete the whole goal.
Step 9: Track Your Progress
Track your progress as a family. In my home, I hang a goal chart on the wall for any goals we have- including decluttering the house. When there is a goal chart hanging up, the entire family gets involved. Everyone loves coloring in the chart, so we all work harder when we have one to color.
For instance, one time I set the goal to get rid of 10,000 items in our home (If you think that’s a lot, just live in a home with four homeschooled kids while you work from home and items add up quickly). I hung up a goal chart for those 10,000 things. In three days, the chart was completed, and we had started a new one.
Track Your Goals and Reach Them with the Goalry Mall.
Most of this was simply due to the kids being really motivated to color in the chart. They could not have cared less about the clutter itself. This is an excellent way to motivate kids, and the whole family gets to watch you get closer to the goal.
Step 10: Have Regular Family Financial Goals Meetings
This should not be a one and done thing. Aim to have family financial goal meetings on a regular basis. You can discuss the progress that is being made, use this as a time for rewards, and talk about any changes that need to be made. Every month is good, but at least every two to three months is okay.
Conclusion
Setting financial goals for your family is important. It should be made a priority and a family affair. With everyone working together, you really can accomplish anything. The most important thing is to set goals that matter to your family, make a clear plan to get there, and reward yourselves along the way.