KIDS & CASH: THE S.M.A.R.T. GOAL

In the previous article we illustrated to you the importance of raising money smart children with benefits to the whole family. In this second installment, we move on to a topic which your child would probably want to master! Why? Well, this is where your child stands to gain more than you.  Here, we  show you how to raise your children to not only be money smart, but to also achieve their dreams. Yes, in case you have forgotten, even  children have dreams! Some of them may dream of buying the simplest of things their moms and dads dreamed of having when they were little, like new toys, story books or educational magazines. Others may dream of things more expensive like the latest Play Station or PSP, Nintendo Wii etc .

Realising this, what is important for you as parents is to know how to turn their dreams into reality. This is where we come in! This particular article will assist you in developing financial goals together with your children.

Smart kids need S.M.A.R.T. goals

We all know we must set goals if we are to succeed in our lives, careers, business or even attain utmost happiness with our families. Without goals all our desires are reduced to mere dreams; dreams which may never come to fruition. And guess what? It is the same when it comes to financial planning! One of the most important things you could teach your child when it comes to managing money is how to set financial goals.

Goals will give your children something to work toward, and help them feel like they are moving along a specific path. Establishing goals invites them (and you!) to look at the big picture, break it down into smaller pieces, and get started toward accomplishing their important hopes and dreams. Regardless of what their goal is, ensure that it is S.M.A.R.T.!

First things first!

Talking to your child is the first step in any goal planning session. You have to know what your child wants before you can help them reach their goal. Oftentimes, your child will not be clearly focused on what their goal is, and that is where you can be of purpose. Ask them questions that can bring the discussion of the goal into the open, helping to define the goal.

If the goal they are reaching for is something that cannot be materialised, do not make a statement to that fact; instead ask them to define how they think they are going to reach it. By having them examine their goal more clearly, they will usually be able to recognize that the original goal was probably too far fetched, and they will be able to reassess it themselves.

Start now!

What are S.M.A.R.T. goals? They are:

Specific – Don’t write fuzzy goals that leave out your kid’s needed action. Pin them down by answering the “W’s”: Who, What, Where, When, and Why. Example: A fuzzy goal would be, “Want to buy a book.” But a specific goal would say, “I want to buy a Harry Porter and the Deathly Hallows novel.”

Measurable – Your kid should be able to measure their progress towards their goal. Example: “I will need RM 40” instead of “I will need  a lot of money.”

Attainable – Set a goal that your kid believes they can reach. Example: An unreasonable goal is, “Have someone give me the book for free.” An attainable goal would be, “Save RM 10 per week.”

Realistic – Your kid should create a goal that is important to them and their dreams. However, depending on their age, they should know what is and is not realistic for them. Example: “I want to buy a story book” instead of “I want to buy a top of the range laptop.”

Time-bound – Determine a date, time, or schedule for your kid’s goal. Example: A fuzzy goal is, “I will buy the book when I have money.” But a time-bounded goal would be to, “Buy the book in February 2009.”

Practice makes perfect!

Do remember that setting and working on goals takes practice; and this applies to both you and your children! Be patient with them and if your efforts just do not seem to be working, try to show them by example how setting goals can be beneficial. Whatever happens, always encourage your children to never give up on achieving their dreams. This is where the ever cynical term “dream on” can be seen in a positive light. Borrowing a famous quote “Without dreams, there is no reality!” – so by all means, let your children dream on.

Stay tuned for the second part of our ‘Turn Your Children’s Dreams into a Reality!’ article on getting your kid to create a money plan!