As a parent of three kids, I remember hauling the detritus of a consumer Christmas to the curb – plastic packaging, wrapping paper, dead batteries. The thrill of opening gifts faded quickly and what was left was waste and the feeling that there must be a better way.
This year, my kids adopted a plan of long term goal setting as an alternative to plastic overload. I talked to my kids (ages 8, 6 and 3) about the things they really cared about. My older son wanted guitar lessons, my middle boy wanted a new mountain bike and my daughter wanted a computer.
We all want to save for college. Each kid identified a charity to support. These are longer term goals – particularly saving for education, but they are consistent with our values and provide long term benefits. We set financial milestones to enable these goals and part of the kids’ allowances, earnings and gifts go towards these goals.
This Christmas, some of their gifts were contributions towards their goals. Interestingly, we found that our kids got engaged in the process. They bought into the goals we set and they enjoyed charting their progress over time. They are learning – by doing – how money grows, how interest accumulates and how goals are achieved. They still get toys, but a sane amount. They know they are working towards meaningful goals they care about.
This experience led us to a movement. A group of like minded parents built a small web-based system to record and track our kids’ goals. We shared this with other parents, and the idea evolved. Eventually, a site called Kidworth was born, to offer goal setting, sharing and tracking to other families. Sites that enable families to set meaningful financial goals are valuable in helping kids develop financial habits and skills.
As families consider goals for 2011, it is important to bring children into the discussion and financial planning websites can be the impetus for setting and achieving long-term financial goals. I suggest looking for tools like Kidworth that are integrated tightly with Facebook so goals can be shared easily – and the service should be free or cost little since the goal is to save money – not spend it.
Now all families can embrace meaningful goal setting and achievement for their kids. We believe we can raise a generation of kids who practice saving and investing their whole lives.
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